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(January 24, 2007) A hearing panel of the IDA has imposed a $20,000 fine and a two-year suspension on Robert Faiello, who was formerly employed at the Richmond Hill office of RBC Dominion Securities.

At a January 16 hearing, Faiello admitted that between May and November 2004, he engaged in business conduct or practice that was unbecoming or detrimental to the public interest when he unknowingly facilitated a manipulation by accepting trade orders from one of his clients for shares of Pender International Inc.

Faiello admitted that he failed to exercise due diligence to learn and remain informed of the essential facts about a client and his respective trade orders in Pender. The panel concluded that while Faiello had no knowledge of the manipulation, he should have recognized that his client was using his own account to further the manipulation.

In addition to the fine, Faiello must pay $5,000 in costs and is prohibited from re-approval by the IDA for a period of two years. Faiello must also successfully complete the Conduct and Practices Handbook exam within six months of any subsequent registration with an IDA-member firm.

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Think-tank recruits former premiers on energy strategy

(January 24, 2007) Former Alberta premier Ralph Klein will join former Newfoundland and Labrador premier Brian Tobin in overseeing development of a continental energy strategy for the Fraser Institute.

The think-tank said the Continental Energy Strategy Project will look to define Canada’s role in North America’s tri-national energy market. It will publish a series of research papers and sponsor conferences and events to bring the importance of energy issues to the attention of the general public, industry stakeholders and policymakers.

“In all my years as premier of Alberta, I never once heard anyone — at any level of government across Canada — articulate a compelling vision for Canada’s continental energy future,” said Klein, who joined the Fraser Institute as a senior fellow following his departure from provincial politics.

Tobin also believes the strategy is a valuable endeavour. “Through our experience as premiers, Ralph Klein and I are both keenly aware of the importance energy plays in building our national economy,” he said. “I look forward to working with him to help define how we, as Canadians, can make the best use of our energy resources.”

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Standard Life launches model dynamic portfolios

(January 24, 2007) Standard Life announced Wednesday the launch of Model Dynamic Portfolios, which combine the benefits of target-year and lifecycle funds and will be targeted to members of group plans and sponsors to improve plan governance.

Standard said that the portfolios will offer group plan members a straightforward approach by investing for retirement by matching risk profiles with investment periods, while maintaining an appropriate asset mix over time. Members will have a “Pick & Click” option for the investment mix best suited to them. Assets will be automatically adjusted as members age and rebalanced quarterly to remain aligned with the investment mix.

“In the last few years, the marketplace has seen an upsurge in the number of target-year and lifecycle funds. These invest towards an anticipated retirement date or according to an investor’s risk profile, but neither product takes both factors into account,” says Anthony Cardone, senior vice-president, group savings and retirement at Standard Life. “The Model Dynamic Portfolios overcome the limitations of target-year and lifecycle funds by investing for both time and risk level.”

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CI launches new global note

(January 24, 2007) CI Investments announced Wednesday the launch of a new deposit note that allows Canadian investors to diversify into global markets with the added benefit of an accelerated return feature designed to enhance the returns of the underlying investment.

The Harbour Foreign Equity EARNS, Series 1 notes will be issued by National Bank of Canada and are intended to provide exposure to the returns of a “Reference Portfolio” consisting of Class F shares of Harbour Foreign Equity Corporate Class, a global equity fund offered by CI Investments.

The accelerated return feature of the Harbour Foreign Equity EARNS provides investors with 150% of any positive return of the reference portfolio at the maturity of the note securities but only 100% of any negative performance. CI said this feature allows investors to enjoy the benefits of leverage without the corresponding downside of actually leveraging their investment. The note securities have an eight-year term to maturity and are not principal protected.

The fund’s portfolio is managed by Harbour Advisors, who currently manages $10 billion of CI’s investments, led by Gerry Coleman and Stephen Jenkins. Coleman has over 35 years of investment experience and was named Fund Manager of the Year at the 2001 Canadian Investment Awards.

Harbour Foreign Equity EARNS, Series 1, notes are available for sale until February 28, 2007, through registered dealers and are eligible for registered plans. The minimum purchase is $5,000.

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Laurentian launches China note

(January 24, 2007) Laurentian Bank of Canada has launched its China Objective Note, which is intended to be a risk-free principal-protected investment product with strong return potential.

Laurentian says the vehicle allows investors to take advantage of the Asian economy growth through 30 internationally recognized corporations based in 11 countries, excluding China. All the corporations have significant market capitalization in China, Laurentian says, and have publicly announced their intention to expand their operations in the country.

The companies operate in eight different industry sectors, with the overweight position in the industrial products, basic consumption and information technology sectors, and a moderate weight exposure in the energy, financial services and telecommunications sectors.

Laurentian believes the China Objective Note will offer better diversification than the S&P/TSX composite index. Moreover, portfolio performance should not be affected by any currency fluctuations, which further reduces its risk. The note is available until April 15, 2007.

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Canadian housing pays off in long-term

(January 24, 2007) A RE/MAX study finds residential housing values in virtually all major Canadian centres posted huge gains for the 25-year period beginning in 1981.

Nationally, average prices appreciated 264%, or 11% annually, during the past 25 years, rising from $76,021 in 1981 to an estimated $277,000 in 2006.

An analysis of 17 housing markets across the country found that price appreciation topped 240% in seven other areas, including St. Catharines, at 329%, Hamilton-Burlington, 325%, Ottawa, 297%, the Greater Toronto Area, 290%, and the Greater Vancouver and Halifax-Dartmouth areas, both with increases of 242%.

“Conventional wisdom used to be that real estate was a relatively safe, long-term investment that typically appreciates at a rate of 5% annually,” said Michael Polzler, regional director for RE/MAX Ontario-Atlantic Canada. “In the top 10 markets, real estate values rose at least 8% or more on an annual basis. Even the worst performing market in the country experienced an increase of close to 6% annually since 1981.”

The study finds a number of factors contributed to the upswing in values, the greatest influence being a 25% increase in Canada’s population, which rose from 24,820,393 to a projected 31,021,251 during the period.

Elton Ash, a regional executive vice-president with RE/MAX, also acknowledges economic diversity and regional shifts away from single-industry dependence for keeping Canada’s real estate growth on a steady incline, especially during the past few years.

“The results are nothing short of remarkable, given the economic volatility of the marketplace in the past 25-year period,” Ash said. “This is especially true in recent years, when serious external factors such as 9/11, SARS and an outbreak of forest fires barely registered on housing activity. Any one of these disasters would have had a significant impact on real estate markets in the 1980s.”

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(01/24/06)