Briefly:

(November 27, 2006) Almost all of Canada’s provincial regulators are moving ahead with the passport model, approving the next phase of its implementation: harmonizing and streamlining securities laws across the country.

The system will allow issuers and registrants to deal with only the regulator governing their principal jurisdiction, while giving them access to capital markets across Canada.

“The passport system is the best and fastest way to break down the barriers between jurisdictions,” said Shirley McClellan, deputy premier and minister of finance for Alberta, and chair of the Council of Ministers of Securities Regulation. “These reforms will put Canada in an even more competitive position, improving a system that the OECD and the World Bank already rank among the best in the world.”

Ontario remains the sole holdout from these plans and continues to push for a single national regulator. Some critics of Ontario’s position have pointed out that the passport model could be used as a stepping stone to such a system, while other provinces remain steadfast in their opposition to a national regulator.

“Our invitation for Ontario to join us stands; however, we cannot afford to stand still. The provinces and territories have committed to getting their legislation in place to move forward with the passport system,” said McClellan. “Our reforms are making real and significant improvements for industry in Canada.”

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Don’t bet against Santa rally, Vasic says

(November 27, 2006) Equity investments remain a good choice, at least through December, according to UBS strategist George Vasic. Historically, the month has seldom seen a decline, he points out in a research note.

“The TSX has only declined six times in December since 1956 — five during recessions, and once in 1996 when Greenspan thought stock valuations were displaying ‘irrational exuberance,'” he wrote.

He acknowledges that the markets have been on an extended upswing and that many investors expect a downturn. But not only does the market tend to rise in December, it is also one of the least volatile months.

The run-up in the market has been largely supported by corporate performance, he says, and valuations are actually “not far from neutral.” December’s so-called “Santa rally” is especially strong when the previous 11 months have produced only average returns, which, he says, has been the case for 2006. For the year to date, the S&P/TSX Composite Index is up about 12%.

“There is still ample headroom to our targets of 13,250 for the TSX and 1,500 for the S&P 500,” he says. “The odds point to another up month in December, and normal seasonal gains through May.”

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Deposit takers report strong growth

(November 27, 2006) Deposit-taking institutions — ranging from banks and trusts to caisses populaires and credit unions — delivered services valued at $61.7 billion last year, up 6.8% from 2004, according to StatsCan.

That marks the fastest growth rate for deposit takers since the peak of the tech bubble in 2000, when growth hit 10.6%.

Almost all lines of business recorded strong growth, with the exception of fiduciary services. Fiduciary services make up a very small portion of the total value of services produced, accounting for only 2.3% last year. As a result, many institutions have been consolidating these services into larger wealth management lines.

Net interest income increased by 4.5% to $31.8 billion, despite a narrowing of the gap between interest charged on loans and interest paid to depositors. Non-interest income jumped 9.4% to $30.0 billion. Self-directed brokerage, full-service brokerage and mutual fund business experienced strong growth.

Electronic financial services, which are closely aligned with retail banking, were the third-largest contributor to income, accounting for 11.0% of total services produced.

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CIBC names managers for new global fund

(November 27, 2006) CIBC Asset Management has announced the managers for its new CIBC Global Monthly Income Fund, which will allow yield-hungry investors to follow the trend toward increasing foreign exposure.

Philadelphia-based Brandywine Global Investment Management has been named manager of the global fixed-income component, while the global equity side will be run by Vancouver-based Mackenzie Cundill Investment Management.

The initial split will see 20% in global fixed income, with 40% in global equities. The remaining 40% will be invested in Canadian equities and fixed-income instruments, to be managed by CIBC Global Asset Management’s Stephen Gerring, lead manager of the CIBC Monthly Income Fund.

“Brandywine Global, Cundill and Stephen Gerring of CIBC Global Asset Management are three exceptional investment managers in their respective asset classes,” said Steve Geist, president of CIBC Asset Management. “For the first time, investors can now benefit from the outstanding track records of all three world-class managers in one global monthly income fund.”

The global fixed-income segment run by Brandywine will be made up of debt securities denominated in foreign currencies issued by Canadian and non-Canadian governments, corporations and financial institutions.

The new fund will be available for sale on or about December 11, and will also be available through CIBC’s Managed Portfolio Services.

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