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(December 3, 2008) Scotiabank has unveiled its plans to finance the acquisition of a 37% stake in CI Financial Income Fund, with the deal expected to close in the week of December 8.

Scotiabank is buying nearly 105 million units of CI Financial from Sun Life Financial, paying $1.55 billion in cash, $500 million in common shares at $34.60 per share and $250 million in 6.25% rate-reset preferred shares.

“This transaction demonstrates Scotiabank’s ongoing commitment to growing our wealth management business,” said Rick Waugh, president and CEO of Scotiabank. “A strategic investment in CI gives us a significant stake in a market leader and complements Scotiabank’s excellent wealth management products and services.”

Sun Life is expected to continue its distribution arrangement with CI after the transaction has been completed, according to Chris Hodgson, group head, Canadian banking, Scotiabank.

The deal still requires regulatory and TSX approval.

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Large Caps Outperform Small Caps in November

(December 3, 2008) U.S. large-cap stocks outperformed small-caps by four percentage points in November, fueled in large part by the utilities and integrated oils sectors.

While the U.S. large-cap Russell 1000 Index (-7.6%) outperformed the U.S. small-cap Russell 2000 Index (-11.8%) for the second consecutive month, the Russell 2000 maintained a narrowing year-to-date advantage of a single percentage point.

“Even after stringing together the best four-day return in the history of the Russell 2000 to end the month of November on a bright note, small-cap stocks couldn’t overcome staggering losses earlier in the month,” says Steve Swartley, senior research analyst at Russell Investments. “Every small-cap sector lost ground for the month, including double-digit losses for the three largest sectors: financial services, healthcare and consumer discretionary.”

The negative news wasn’t confined to the small-cap space. Every segment of the U.S. equity market experienced negative returns for the month, ranging from the Russell Top 50 Index (-5.6%) to the Russell Microcap Value Index (-13.9%).

For most of the year, growth and value stocks in the various market capitalization tiers have performed in unison with either growth or value outperforming in every tier for the month.

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Realty market to remain slow in 2009

(December 3, 2008) The global economic slowdown has driven down activity in the Canadian real estate market through the last half of 2008, and will continue to weigh on the market in 2009, according to a report by RE/MAX.

The RE/MAX Housing Market Outlook for 2009 found that while the pace of sales slowed, the average transaction price held up remarkably well in 2008.

The market will remain slow in the first half of 2009, but should rebound in the latter half of the year if the economy picks up.

“While the economy will dictate real estate performance next year, it’s important to remember that demand still exists in the marketplace,” says Sylvain Dansereau, executive vice-president, RE/MAX Quebec. “In the midst of stock market turmoil, sold signs continue to appear on lawns across the country. The comfort of a tangible investment like real estate goes a long way in tough times.”

The report predicts that 440,000 homes will have changed hands by the end of 2008, representing a decline of 15% from 2007. Average prices have hovered around $300,000. While 2009 is expected to see similar volume of sales, the average price may fall to $293,000.

“Canada’s real estate environment is considerably more complex than it has been in recent years,” says Elton Ash, regional executive vice-president, RE/MAX of Western Canada. “The landscape is definitely changing, with most markets shifting into either balanced or buyer’s territory.”

(12/03/08)