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(August 17, 2007) On Friday, the Investment Industry Association of Canada tried to assuage investor fears by saying the current market volatility “reflects the normal functioning of healthy, expanding capital markets.”

Ian Russell, the IIAC’s president and CEO points out that the S&P/TSX index has more than doubled since 2003 and has increased by 30% since the end of 2005. “We’re in a period of remarkably strong growth, and no investor should feel unduly concerned about corrections in such a strong market,” he says.

Russell also says that economists have emphasized that fundamentals are still strong and that a correction that forces investors to pay more attention to risk levels is a good thing.

The association notes that it’s actively working on long-term initiatives to enhance Canadian equity market efficiency. “These initiatives will improve regulatory procedures across the country, making them more cost-effective, uniform and transparent,” says the IIAC.

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No sub-prime exposure at RBC, says bank

(August 17, 2007) Good news for RBC shareholders — the bank has announced that it has no exposure to the U.S. sub-prime market.

In a release, RBC said its asset-backed commercial paper, which is owned by RBC Money Market Funds, has underlying assets in mortgages, auto loans, personal lines of credit and credit card receivables, but has no connection to sub-prime, collateralized debt obligation or derivative markets.

“[The bank] does not expect issues in valuing RBC Money Market Funds or changes to their net asset value, and will continue to sell and redeem funds as our clients deem appropriate,” said Brenda Vince, president of RBC Asset Management Inc.

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S&P gives Canadian banks the thumbs-up

(August 17, 2007) On Friday Standard & Poor’s announced that Canada’s volatile asset-backed commercial paper market won’t affect the ratings or outlooks on the Canadian banks.

“We have held discussions with the major Canadian banks on the current status of their liquidity risk management practices and positions, and remain satisfied that liquidity is sound and supportive of their current short-term ratings,” said S&P’s credit analyst Donald Chu.

He adds that with the banking sector’s “solid and consistent earnings profile,” low credit-quality issues and strong capital-adequacy positions, there’s no reason for S&P to change its position anytime soon.

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U.S. workers will still work during retirement

(August 17, 2007) More U.S. workers intend to keep punching timecards once they’re ready to retire, according to a new study from Robert Half Management Resources. Fifty-six per cent of the 492 full- and part-time workers surveyed plan to continue working in some capacity, while just 34% plan to quit work entirely.

The results were not a surprise to Michael Gooley, branch manager of the Toronto office of Robert Half Management Resources.

“We believe people have increased financial responsibilities and want to stay mentally and physically challenged,” he says. “And if people will be spending more years in retirement, they want to stay busy.”

Breaking down the 56% specifically, 24% plan to change careers, 14% want to work as consultants, 14% will work fewer hours for their company, 2% will take a part-time job, and 2% will continue to work as per usual.

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More than 6,000 people pass final CFA exam

(August 17, 2007) The CFA Institute recently announced that more than 6,000 CFA candidates passed the final exam, becoming full-fledged certified financial analysts.

The Level III exam saw 12,777 people from around the globe write the test, but with a global pass rate of 67%, not all made it across the finish line.

“There is no question that the CFA exams are tough,” said Robert Johnson, CFA, managing director of the education division. “The exams reflect the growing complexity and globalization of investment management practice. The designation is well respected by employers and clients alike because of the very high standards that candidates are measured against.”

Out of the 33,599 Level I exam takers, only 40% passed; the Level II global pass rate was also 40%, with 25,521 people writing the exam.

In Canada, 6,302 people wrote the exams, and 42% passed. The CFA Institute predicts 165,000 people — 14,000 from Canada — will write one of the three exams by June 2008.

(08/17/07)