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(March 27, 2007) RBC has announced the launch of the RBC Commodity Booster Notes, Series 1, which will provide investors with exposure to a basket of commodities that include oil, copper, nickel and zinc, and will guarantee the investor 45% at maturity as long as the investment grows by more than zero per cent.

RBC said the notes will offer 100% principal protection and will have its returns based on the appreciation in the commodity basket. The notes offer further downside protection in what it calls the “booster zone”: if appreciation is above zero per cent and less than 45%, the notes will return 45% at maturity. That means that if the basket, which is weighted at 100 at the beginning of the term, is up by even a dollar at maturity, the investor will get a 45% return on investment.

For any appreciation greater than 45%, the investor will receive the full appreciation of the commodity basket at maturity. Should the change in the commodity basket be less than zero per cent, investors will receive their original principal amount at maturity.

The notes are issued in Canadian dollars, and there is no direct foreign currency exposure. They are 100% RRSP eligible, can be purchased through FundSERV (code RBC321) and are available through April 20, 2007. The maturity date of the note is April 27, 2012.

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Foreign takeovers threaten corporate Canada: SECOR

(March 27, 2007) Foreign takeovers, such as the recent bid by Swiss miner Xstrata for LionOre, are prompting further warnings that corporate Canada is being hollowed out, this time from independent strategy consultancy SECOR. The firm warns that if this trend continues, Canada will start to lag behind in foreign competiveness and many of our high-skilled and high-paying jobs will leave the country. /p>

SECOR admits that Canada has been a strong player in the international M&A game, spending the equivalent of 4.8% of GDP on foreign acquisitions in the past decade. The U.S., by comparison, spent only 1.7%, while E.U. member-states have spent only 2.2% of the GDP.

Despite this, SECOR points out that Canada has had a net spending deficit in the market for corporate control. Over the past 10 years, foreign companies bought more of corporate Canada than corporate Canada bought of foreign companies.

Since 2005, major Canadian corporations such as Hbc, Dofasco, Fairmont, Falconbridge and Inco have fallen into foreign hands. Canada has dropped a net $66 billion in corporate control of major corporations.

Control of the largest Canadian companies being taken abroad leads to long-term economic problems, the group points out. Soon to follow will be the decision-making, the headquarters, the highest-paying positions and the supporting professional services.

SECOR recommends not that Canada implement protectionism but that it implement free-trade safeguards that penalize foreign competitors protected by their home nations. SECOR also suggests that Canada not interfere with domestic companies seeking to merge, such as the large national banks, pointing out that RBS and BNP-Paribas were each smaller than RBC 10 years ago, but by being allowed to merge, they were able to take on the scale necessary to be global competitors.

SECOR cites Manulife as a good example of a company with a global vision that increased its size substantially by making bold acquisitions such as its takeover of John Hancock. It also said that Canadian corporations need to have long-term growth plans and boards of directors that can fend off foreign buyouts from companies who don’t share similar long-term goals.

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Scotia, CI release income PPNs

(March 27, 2007) The Bank of Nova Scotia and CI Investments have announced the launch of the Bank of Nova Scotia–CI Performer Deposit Notes, which will offer principal protection, monthly income and the potential for capital growth.

The returns of the deposit notes will be linked to the performance of the Signature Income & Growth Fund, an income-oriented balanced fund from CI Investments. The notes are being launched with an initial 125% exposure to the fund and an allocation strategy that will allow for up to 200% exposure to the fund.

“Income continues to be the main objective for many Canadian investors, and the Bank of Nova Scotia–CI Performer Deposit Notes are designed to meet that need, with the added benefit of principal protection,” said David R. McBain, senior vice-president of CI Investments.

The deposit notes are available in two series: Series 1 is designed to add income and growth potential to registered portfolios, while Series 2 is designed for non-registered accounts with tax-efficient monthly payments.

The notes are 100% eligible for registered plans and are available through financial advisors until May 18, 2007. The issue price is $100 per deposit note, with a minimum investment of $5,000.

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(03/27/07)