Briefly: “Policies will work: BOC” and more news

Previously: | MON | TUE | WED | THU |

Given the rapid onset of what is being hailed as the worst recession since the Great Depression, it’s easy to understand why Canadians may have lost faith in the financial system. But the policy measures the central banks have taken will restore confidence, according to the Bank of Canada’s governor.

“There is a plan to restore confidence and growth, we are implementing it, and it will work,” Governor Mark Carney said, speaking to a joint meeting of the Northwest Territories and Yellowknife Chambers of Commerce.

The Bank has been working closely with foreign central banks to re-establish trust in the global financial system. The stability of that system is a precondition to recovery, which Carney said Canadians can expect, rather than hope for.

While the Bank has eased monetary policy, the federal government has employed fiscal policy in an attempt to resuscitate the economy.

So far, the policies have been on the right track, but more needs to be done, according to Ian Russell, president and CEO, Investment Industry Association of Canada.

“Canadians are fortunate that the Bank of Canada and the federal government have acted promptly and effectively throughout this financial crisis to improve trading and financing conditions in corporate credit markets, particularly in the securitized marketplace,” he told the House of Commons Standing Committee on Finance today.

But, “authorities must remain vigilant in monitoring and identifying pockets of illiquidity that may disrupt the normal functioning of important sub-markets, or the market as a whole, and continue to assess what could be done to address such situations,” he continued.

• • •

Agnew to head Seneca College

The former Ombudsman of Banking Services and Investments has been named president of Seneca College, making David Agnew the fifth person in that role since the college opened 41 years ago.

“We needed a strong leader to build on our record of growth, innovation and provincial, national and international leadership in post-secondary education, and we have that person in Mr. Agnew,” said Helen Hayward, chair of the college’s board of governors.

Aside from his term as ombudsman, Agnew has served as president and CEO of UNICEF Canada and executive vice-president and corporate secretary for the Credit Union Central of Ontario.

“I am honoured to join an organization with such an exceptional reputation for excellence and innovation,” said Agnew. “There could not be a more important time for Seneca’s key role in providing students with the best possible education and training for today’s and tomorrow’s economy. I look forward to working with the Seneca team and all our stakeholders in continuing our work as a transformational leader in education.”

Agnew will become the president of Seneca College on July 1.

• • •

Two banks named best employers for new Canadians

CIBC and BMO have been recognized as being among the best employers for new Canadians, by the Toronto Region Immigrant Employment Council.

“To us, it’s a business imperative — our diverse workforce mirrors the communities in which we do business and helps us understand our customers’ needs,” said Rose Patten, senior executive vice-president, head of human resources and senior leadership advisor, BMO Financial Group.

For CIBC, it’s the second year in a row.

“At CIBC, our priority is to create a positive experience and a supportive work environment where employees of all backgrounds can excel and realize their full potential,” said Jacqueline Moss, executive vice-president, human resources, CIBC.

• • •

S&P/TSX undervalued: Survey

The latest quarterly Russell Investment Manager Outlook survey reported that only one in 10 managers believes the Canadian market is overvalued, while 70% say that stocks are undervalued. Energy, materials and financial services sectors offer the most attractive prospects.

“Except for emerging markets, Canadian equities were the worst-performing asset class in the final quarter of 2008,” said Sadiq Adatia, chief investment officer with Russell Investments Canada. “This decline was led by sharp pullbacks in energy, materials and financials. Given the bargain-basement valuations that resulted, it’s fitting that a solid 60% say they are now bullish on Canadian equities.”

With regard to the outlook for the S&P/TSX sector performance, 76% of managers surveyed are bullish toward the energy sector, and only 15% see more downside potential.

Additionally, the outlook for U.S. equities weakened this quarter. The number of bullish managers slipped from 60% to 51%. However, bears remained unchanged at 24%, indicating that some former bulls have simply moved to a neutral outlook.

The dip is an indicator that other equity markets, such as Canada, have simply become more attractive. “In terms of the U.S. market, we are buoyed by the U.S. government and U.S. Federal Reserve’s aggressive actions, as well as the writedowns taken by many U.S. firms, a notable increase in the nation’s savings rate, and slow but certain signs of stability in the real estate market. Taking these factors together, we expected to see U.S. bullishness increase,” says Adatia.

Additionally, sentiment toward overseas equities slipped this quarter, with bulls declining from 50% to 43% and bears increasing slightly to 30%. As with the U.S., it appears that some bulls have moved into neutral territory.

(04/02/09)