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Canadians say they are aware of the economic problems and are taking steps to protect themselves from personal fiscal disaster, but their actions appear to fall short of their claims, according to a survey by BMO Financial Group.

The BMO Savings Monitor survey found that nearly two-thirds of Canadians say they will cut back on their spending, while more than 40% plan to adjust their current investment mix to better withstand economic pressures.

“It’s encouraging to know that people are taking time to assess the situation and adapting to protect themselves during volatile times,” said Linda Knight, president and chief operating officer of BMO Mutual Funds. “However, our research also indicates that some Canadians are unfazed by the shaky economy — in fact they may be in denial. Having a plan in place to help make sense of it all is paramount.”

Nearly 70% of respondents said they did not have a financial plan in place, and 80% said they did not think economic uncertainty was enough incentive to get one. More than 40% do not have emergency funds stashed away.

Almost 70% of Canadians said they did not anticipate raiding their RRSP to pay for everyday expenses. Roughly 60% said they will maintain their current contributions, while 38% said they were likely to cut back on RRSP contributions.

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Advisors bullish on resources once more

The sell-off in commodities and the stock market in general may have been overdone, and advisors are now taking a more bullish stance, according to a survey by Horizons BetaPro.

Oil has seen a dramatic increase in bullish sentiment, with 66% of the 400 advisors surveyed expecting the price to rise, compared to 51% in a previous quarterly survey. Gold enjoys even more support, with 69% saying they expected gains in the precious metal.

Confidence in the equity markets is catching the updraft, with resource stocks being the focus of positive sentiment, while financials, American and emerging market stocks remain a bit of a drag.

“This sentiment indicates that advisors are confident that the equity and commodity markets will rebound,” said Howard Atkinson, president of BetaPro. “Despite the poor performance of crude oil in Q4 2008 — a 57.93% drop — advisors remain upbeat going into the new year.”

Fixed income investments are starting to show signs of weakness after a massive flight to safety. Opinion is split 50-50 on the American 30-year bond.

Uncertainty about the American equity and debt markets has a knock-on effect into the currency market, with two-thirds of advisors expecting the greenback to weaken against the loonie in the first quarter of 2009.

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BMO Capital Market expands Chicago office

BMO Capital Markets has appointed Tom Krasnewich as managing director of its U.S. industrials group, based in Chicago.

“Our clients will greatly benefit from Tom’s deep sector knowledge and many years of deal experience in the industrial space,” said Paul Hawkinson, managing director and sector head, industrials group, U.S. investment and corporate banking. “Further, his longstanding relationships with the private equity community will be a tremendous asset to our firm.”

Krasnewich has more than 15 years of investment banking experience working with corporate and private equity clients focused on the industrials sector. Prior to joining BMO, he was managing director in the industrials group for Deutsche Bank Securities.

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Barclays Global to remain in Toronto, cut staff

Barclays Global Investors is not closing its trading and asset-management operations in Canada, as previously reported in other media.

However, BGI will be relocating some elements of its Toronto shop to its San Francisco headquarters over the next several months.

“We are transitioning some of our trading operations to a North American platform and moving the operations down to the U.S.,” says a BGI representative who preferred to remain anonymous. “Aside from that, it’s business as usual for us. Everyone from sales, service and research in our Toronto and Montreal offices are remaining the same.”

After a strategic review, the decision was taken to consolidate the Toronto operations team with the San Francisco office to “encourage growth and momentum.”

While the departure of BGI Canada’s chief executive officer Rajiv Silgardo was not confirmed, Bill Chinery, the current head of BGI Canada’s institutional business, will lead the company going forward.

The number of staff cuts could not be confirmed and details on other aspects of the company, such as what effect this will have on BGI’s North American transition management business, were not available at the time of publication.

The cuts are also not expected to have any meaningful impact on Barclay’s lucrative exchange-trade-fund business, iShares. iShares is the largest ETF provider in Canada. The process of rebalancing ETFs to correspond to their indexes will remain the same.

Much of iShares back office business will be moved to San Francisco, which is actually isn’t very much different from other leading ETF firms in the country. The most important aspect for running Canadian indexes — which are popular with Canadian investors — is to have domiciled designated brokers available. None of iShares designated brokers or marketing and sales teams are expected to be moving.

(01/16/09)