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(March 29, 2007) BCE Inc. is denying that it is in talks with Kohlberg Kravis Roberts, following widely reported rumours that the New York based private equity firm was preparing a $30 billion bid for the operator of Canada’s largest telco.

“At the request of the TSX Market Regulation Services, BCE today issued a statement to confirm the fact that there are no ongoing discussions being held with any private equity investor with respect to any privatization of the company or any similar transaction. BCE further stated the company has no current intention to pursue such discussions,” a release from the company said.

Stocks of BCE climbed throughout the morning on speculation of the takeover bid, which was rumoured to be a partnership between KKR and the Ontario Teachers’ Pension Plan. The partnership is necessary because, as a foreign company, KKR is prohibited from owning more than 46% of a Canadian telecommunications company.

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CSA proposes changes to exec compensation disclosure

(March, 29, 2007) The Canadian Securities Administrators announced Thursday they are seeking comments on proposed Form 51-102F6, Statement of Executive Compensation, which is designed to improve existing disclosure rules for executive compensation.

The proposal will require companies to clearly define their compensation policies and objectives, the CSA outlines. Companies will be required to provide in tabular form the total compensation for each named executive officer and director, including salary, bonus, stock and option awards, payments upon termination or change in control, and pension entitlements.

“These amendments will provide investors with improved clarity and context regarding corporate compensation practices,” said Jean St-Gelais, chair of the CSA. “Enhanced disclosure is vital to investors understanding how executives are compensated.”

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Draft of trust tax in ’07 budget angers CAIF

(March 29, 2007) the federal government’s proposed 31.5% income trust distribution tax was included in the 2007 draft budget released earlier this week, which could be passed into law within weeks, according to the Canadian Association of Income Funds.

George Kesteven, president of CAIF, said his group is dismayed by the government’s action, particularly since it goes against the recommendations of a recent finance committee report.

“The government has chosen to act contrary to the finance committee’s report, where it recommended the government reduce its 31.5% income trust distribution tax to 10%, extend the four-year transition period to 10 years and introduce a stand-alone bill so the tax and its consequences could be fully debated by all Parliamentarians,” Kesteven said.

Kesteven added, “We are disappointed that the minister has chosen to bury this tax in the Budget Implementation Bill in the hope Canadians won’t notice. Everyone has noticed. We will be vigorously lobbying all MPs and the provinces to support crucial amendments to the legislation.”

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Managers keen on Canadian equity: Russell

(March 29, 2007) According to the Russell Investment Manager outlook, a quarterly poll of investment managers, the market is bullish for broad market Canadian stocks.

Across the board, the Canadian equity market saw increases in positive manager sentiment, as bullishness for the broad market increased 13 percentage points to 48% and bullishness for Canadian small caps increased 22 percentage points to 45%, the poll found.

“Many investment managers that had been neutral to Canadian equities have moved firmly into the positive camp, while the bears have largely held their ground,” said Tim Hicks, chief investment officer, Russell Investments. “More managers are asserting their status as bulls, at the very same time that the market has become more volatile and turbulent.

One interesting trend about manager preference is their growing interest in Canadian telecommunications stock. Telecommunications replaced financial services as the sector finding the most manager enthusiasm this quarter. Confidence in financial services fell to 52% from 68%, while positive sentiment toward the telecom sector rose to 66% from 52%.

“Earnings for financial services companies have been hot for some time, and managers may believe that this sector has peaked,” said Hicks. “Canadian telecoms continue to enjoy strong earnings power in the wireless sector, bolstered by a lack of competition.”

Russell suggests that the optimism for the Canadian market is tempered by caution about the energy sector. Fifty-two per cent of managers named decreasing energy prices as the largest risk factor threatening Canadian equity markets over the next year.

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AGF Trust appoints new board director

(March 29, 2007) John F. Schucht has been named a director of the AGF Trust Company board, effective immediately.

AGF said that Schucht has had a well-established career in the financial services industry dating back to the 1960s. Following his retirement as chief operating officer at CT Financial Group of Companies in 1997, he remained on the company’s board as its vice chairman until the company was acquired by Toronto Dominion Bank in 2000.

Most recently, he had been serving on the board of Highstreet Asset Management Inc., a London, Ontario, investment counsel firm. In 2006, AGF Management Limited acquired 80% of Highstreet Partners Limited, which wholly owns Highstreet Asset Management.

“John brings great strength to our board as a seasoned executive with many years of senior management and board experience in the financial and real estate industries,” said Blake C. Goldring, AGF Management’s chairman and CEO. “Having someone of John’s calibre with such a successful track record, business knowledge and commitment to the community will be extremely beneficial.”

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IDA slaps advisor with $85,000 in penalties

A hearing panel of the Investment Dealers Association of Canada has imposed a $60,000 fine, plus $25,000 in costs, against a Vancouver-based advisor who gave unsuitable investment advice and made unauthorized transactions with client money.

Michael William Balanko, who was affiliated with First Associates, formerly Blackmont Capital, was found to have given unsuitable investment recommendations to two clients in 2004. In addition, it was also established that he made 15 transactions in the accounts of one his clients without written authorization from either the client or the firm he worked for.

In addition to the fines, Balanko cannot work for an IDA firm for two years.

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(03/29/07)