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(October 2, 2006) RBC Asset Management is closing the RBC O’Shaughnessy Canadian equity fund to new purchases as of January 18, 2007..

The decision comes as the fund approaches $2 billion in assets. The bank says that capping the fund will provide it the best opportunity for continued success in its investment approach. The change will not affect existing investments in the fund.

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Betting on discount brokerages

(October 2, 2006) Two discount brokerages are jockeying for a stronger market position, with one offering cash incentives and the other promising low fees in an attempt to woo new investors.

RBC Direct Investing is offering a 1% cash incentive to investors who transfer assets from an outside investment dealer, while Questrade has unveiled a new low-cost pricing standard.

To qualify, investors must transfer a minimum of $25,000 in cash or securities into a new or existing account held by RBC’s discount brokerage arm.

RBC Direct Investing, formerly known as RBC Action Direct, is offering the program until November 30, up to a maximum incentive of $2,500 per account or $10,000 per client. Also, clients who make the switch will be reimbursed up to $125 in transfer fees.

The program is being used to promote RBC Direct Investing’s new name and additional features that have been added to its website. Investors can now see real time account positions and gain access to level two quotes, which indicate how many shares are available at prices below the highest bid on the Nasdaq, TSX and the TSXV.

Questrade is now giving its clients the option to pay $4.95 per trade up to 495 shares and $0.01 thereafter or a flat rate fee of $9.95 per trade of all Canadian and U.S. stocks.

At the same time, Questrade is reducing data fees on its trading platforms and eliminating RRSP and inactivity fees. Questrade is also launching a new client service website it calls myQuestrade.

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CPP to buy $1 billion worth of water

(October 2, 2006) H2O may be the molecular makeup of water, but for the Canadian Pension Plan Investment Board it is also the formula for stable cash flow.

The CPP Investment board is participating in a consortium that has made a recommended offer for all of the shares in AWG Plc, the parent company of Anglian Water, one of the leading water companies in the UK serving approximately six million customers in the east of England. CPP has offered 1555 pence per share, which values AWG at approximately 2,213 million pounds sterling. CPPs position in the bid is about $1.05 billion CDN.

The bid fits in to CPPs infrastructure investment strategy. “As long-term investors we look for solid infrastructure assets, like AWG, that have stable cash flows, strong operational performance and an experienced management team,” said CPP’s senior vice-president for private investments, Mark Wiseman. “The potential acquisition of AWG would be our largest infrastructure investment to date and would further strengthen our growing portfolio of infrastructure assets.”

The other members of the consortium, which is investing through a newly incorporated vehicle called Osprey Acquisitions Limited, are CPP Investment Board, Colonial First State Global Asset Management, Industry Funds Management, and 3i Group plc.

The bid for AWG follows the CPPs US$350 million investment in Transelec Chile, the largest electricity transmission company in Chile, in June. At that point the pension plan had a total of $5.7 billion CDN in private equity and infrastructure investments.

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Merrill Lynch Canada issues medium-term notes

(October 2, 2006) Merrill Lynch Canada Finance Company, a wholly-owned Canadian subsidiary of Merrill Lynch & Co., has issued two principal-protected notes.

Under its medium-term note program, Merrill Lynch Canada issued a $5,478,900 aggregate principal amount of The Asset Allocator Principal Protected Notes, Series 2, due October 2, 2013, and a $6,101,300 aggregate principal amount of its Merrill Lynch Commodity Principal Protected Notes, Series 2, due, October 3, 2011.

The notes are senior notes of the company, unconditionally guaranteed by Merrill Lynch & Co., and are rated AA(low), A+, Aa3 and AA– by Dominion Bond Rating Service Limited, Standard & Poor’s Rating Services, Moody’s Investors Service and Fitch Ratings, respectively.

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BMO’s Pallium hires new CCO

(October 2, 2006) Pallium Investment Management, the credit investment management arm of BMO Financial Group, has hired Pamela Stumpp as its chief credit officer.

Pallium, founded by credit investment management industry veterans Flavio Bartmann and Conrad Voldstad, provides an alternative for institutional investors who want to participate in the credit markets without making direct investments in the required infrastructure, risk management and expert resources.

Stumpp joins Pallium from Moody’s Investor’s Service, where she was managing director and CCO for North American corporate finance.

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