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(July 17, 2006) Computer difficulties at Desjardins Group are disrupting all banking transactions normally carried out online, in the group’s branches and through the Desjardins ATM network in Quebec, Ontario and New Brunswick.

Although services are disrupted, debit and credit transactions can be performed normally and employees can manually carry out withdrawals and attest bill payments.

The company says specialists are working actively to put the computer system back into operation as soon as possible.

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Foreign purchases of Canadian securities reach 18-month high

(July 17, 2006) Canadians acquired $10 billion worth of foreign securities in May, with the bulk of those sales going into foreign equities. While Canadians invested $5.9 billion in foreign equities, the highest level reported in five years, non-residents stepped up their buying, investing $5.7 billion in Canadian securities, an 18-month high.

Canadians reversed their 11 month trend of investing in the United States during the month of May, investing more than two-thirds in equities issued by foreign firms outside of the U.S. Purchase of foreign bonds on the other hand were concentrated in the U.S. corporate sector with purchases totaling $4.3 billion, compared to a $1.7 billion net purchase of overseas bonds and a similar net sell-off of U.S. government bonds. Statistics Canada says a significant portion of foreign new issues purchased during the month were invested in Canadian dollar denominated “Maple Bonds”.

Meanwhile, foreign investors added $1.8 billion worth of Canadian bonds to their portfolios in May after selling $2.2 billion the month before. Geographically the United States was the largest investor, acquiring $1.9 billion during the month while investors from other countries divested $166 million worth. Bond purchases were concentrated in the federal government sector.

Canadian equities were also attractive to foreign investors during the month. Non-residents purchased $3.5 billion in May. Foreign investors also reversed their $419 million divestment of money market paper in May, acquiring $439 million during the month.

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BMO issues semi-annual provincial outlook

(July 17, 2006) BMO Financial Group’s economics department says western Canada, Newfoundland and Labrador will continue to lead the economic parade in 2006, thanks to high resource prices. The same factors however are creating a drag on growth in Ontario and Quebec.

Not surprisingly, the report says Alberta will lead all provinces in economic growth for the rest of the decade, starting with growth of 5.2% this year. The report is also calling for robust economic expansion in B.C., helped by the province’s construction boom.

In Saskatchewan, growth is forecast to reach 3.2%, helped by major projects in the energy sector, and Manitoba is expected to post growth of 3.5% thanks to construction and an expected rebound in agriculture.

Newfoundland and Labrador will post a 5% gain, up significantly from the 0.4% growth rate reported in 2005. Nationally, Canada’s performance in 2006 is expected to be slightly stronger than in 2005 with growth estimated at 3.1% compared to last year’s reported 2.9%.

“Going forward, the restraint from the loonie will ease, though the impact of higher interest rates will intensify,” says Rick Egelton, senior vice president and chief economist at BMO Financial Group. “Meanwhile investment will continue to be an important source of growth. In total, GDP is expected to rise 3.1% in 2007 and 3% on average over the 2008-2010 period.”

On the employment front Egelton says the group does not expect the upward trend in employment growth to continue even though the pace of hiring picked up from 1.4% in 2005 to 2% in 2006, contributing to a drop in the unemployment rate to 6.3% from 6.8% in 2005. “A slower pace of employment growth in 2007 and beyond reflects the fact that firms are increasingly responding to rising demand by adding capital rather than new workers,” he says.

BMO also predicts that the Bank of Canada will hold the overnight rate steady at 4.25% for the foreseeable future while the Canadian dollar averages 89 cents U.S. for the year before rising to 91 cents U.S. in 2007 on general weakness in the greenback, before easing off to 90 cents U.S. in 2008.

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Univeris Hires New Director of Business Development

(July 17, 2006) Wealth management technology provider Univeris Corporation has hired George Stamatakos, former assistant vice president of sales and marketing at Winfund Software Corporation, as the company’s new director of business development. Stamatakos will initially focus on Eastern Ontario and Quebec but says he will also have national responsibility for business development.

“George’s extensive knowledge of the financial services industry will be a tremendous addition to our sales and growth strategies,” says Paul Smith, senior vice president of marketing and business development.

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