Category: Canada

Diamonds are a Traders Best Friend

Posted by WFG – July 7, 2011

Market specialists are betting that diamonds will a top earner on the market in the next few months. This comes after the news that their prices rose five times faster than gold in 2011. Many believe that prices have leaped due to the high demand from India and China.

In the first six months diamond prices leaped 26% as rough gem production struggled to match the surging requests from jewelry buyers. In comparison, gold only rose 5.6% and reached a record 1,577.57 an ounce in May.

Companies such as Diamond Capital and Fusion Alternatives, look to profit from the surge in prices, as middle classes from China and India continue their interest. The Harry Winston Diamond Corp also revealed in May that it would plan a $250 million diamond fund for the institutional investors.

Despite a selection of companies making profits, there will still be a push for diamonds, as supplies will be expected to fail in meeting the demand. Just last year the industry advanced 17%, with gold also increasing by 30%. According to data, prices rose last week to the highest point since 2002.

TSX Looking Positive

Posted by WFG – July 5, 2011

The Canadian benchmark index is close to being back in positive territory as stocks rise for six days straight. There a several factors for the overall climb but many suggest that today’s is due to rising gold and oil prices.

Climbing ahead to 37.90 points was the S&P/TSX composite index, which has risen almost 4% over the last six sessions. Energy materials led the rise with Kinross Gold advancing 2.99% to $15.85 and Suncor Energy climbing 0.68% to $38.75.

Despite this, US stocks weren’t able to continue on last week’s good performance as the Dow Jones industrial average fell 12.49 points to 12,570.28. Many economists had predicted a higher rise in new factory orders, which lead to a halt in growth.

Other markets, such as the London FTSE and the Nasdaq composite index, both made small gains. Nasdaq crept up 0.08% to 2,818.26 and the London FTSE edged up 0.07% to 6,013.54.

For more industry news contact the Winflow Financial Group.

Toronto Stock Market Expected to Open Higher

Posted by WFG – June 30, 2011

The Toronto stock market looks set for a higher open today as traders await the news of economic growth. This rise follows the impact of the vote in Greece which enabled them to secure finances for extended debt repayments.

In pre-market trading the Canadian dollar rose 0.6 cents high to 103.63 cents. Among the biggest fallers were gold, which was down $1.80 to $1,508.60 per ounce. And oil which fell after a surge in the previous days.

After weeks of uncertainty, many industry experts are relieved that the situation in Greece has come to a slight conclusion. Lawmakers in Greece are close to voting in favor of the implementation bill, which will confirm the future finances. This has helped solidify the market, despite continuing problems with the Greek government.

Thursdays trading is expected to be more volatile than usual, as it marks the end of the month, and the end of a quarter. This is a point where a wide mix of traders close off trades and book profits.

Weak Second Quarter for Canada

Posted by WFG – June 30, 2011

It’s looking like the second quarter in Canada will be weak, as the country’s economy faltered in April. This information was revealed by Statistics Canada and they added further that it was both the service and good-producing sectors that stalled.

With a strong start to the year, many economists believed that Canada would continue to progress throughout the year. Even with the problems in Europe and concerns towards the US debt. But these issues have taken their toll and growth in the second quarter will be jaded.

Despite this, the Canadian economy won’t stall completely. Specialists predict that that growth will pick up to around 2.5% in the next 6 months with gasoline prices beginning to slimmer down. Retail, construction and the public sector all advanced. But due to the problems in Japan, growth has been restricted.

London Stock Exchange Merger Cancelled

Posted by WFG – June 29, 2011

The London Stock Exchange has agreed to terminate its merger plans with the Toronto Stock Exchange. This was a $3.7 billion agreement and has ended due to a lack of support from shareholders.

The TMX Group had stated that a large portion of shareholders had supported the merger. But due to a two-thirds support being required, it meant that the deal would be very challenging to complete. The final vote was scheduled to be Thursday morning.

Following this breakdown, the TMX Group will now review a rival takeover bid from the Maple Group Acquisition Corp. TMX will need to pay the LSE if the deals goes ahead and the sum will be close to $40 million.

The London Stock Exchange would have owned an impressive 55% of the new venture, creating what they considered a resource and energy equity powerhouse. But will now have to turn their attention to other projects.

Future Ownership of the TMX

Posted by WFG – June 29, 2011

The future ownership of the Toronto Stock Exchange is turning into a fight, as a high-powered cast takes sides. On one side there are the owners of the Toronto Stock Exchange, the TMX Group and the potential merger with the London Stock Exchange Group. Battling it out with these financial behemoths is the Maple Group Acquisition Corp, who represents 13 of Canada’s biggest banks and financial firms. TMX shareholders will need to decide by Thursday, but who are among the groups they need to decide on?

There’s a large group of people in favor of the TMX/LSE merger, with Xavier Rolet high on the list. A former member of Lehman Brothers, and now chief executive officer of the LSE, they believe that the merger will create a powerhouse.

In addition to Xavier Rolet is Bill Holland. As the largest shareholder in the TMX he holds a considerable amount of power in the final decision. He believes that the merger would help protect the Canadian interests.

But against them is a group equally as powerful. Head of the Maple Group, Luc Bertrand, believes that control needs to be kept in Canada. Agreeing with this is investment guru Stephen Jarislowsky. He believes that the Maple Group has a formidable business model, compared to the decline London Stock Exchange.

The outcome seems to favor the Maple Group but a final decision will still need to be made.

Inflation Rises in Canada

Posted by WFG – June 29, 2011

The annual inflation rate in Canada rose a massive 3.7% last month due to an increase in gasoline prices. It now sits at the highest level in 8 years and has pushed the index limit far above expectations.

Analysts had expected the rate to fall 0.2% in April, but the month on month price rise more than doubled 0.7 from the origin al 0.3. These results cause problems for the Bank of Canada governors, with less than three weeks prior to a meeting, arranged to discuss short-term interest rates. The bank had predicted a rise above 3%, but no one contemplated that it would be above this limit for three consecutive months.

One of the main culprits was the rise was gasoline. From April it rose 2.0%, which made it 29.5% higher than May 2010. If you exclude the gasoline jump, annual inflation rates would be at a more casual 2.4%, and despite it still being above the likeable bank rate, it would be far more manageable. Other volatile items, such as selected foods and energy, only rose to 1.8% and continue to sit below the 2% target. In addition to this, it’s suggested that gasoline prices have fallen in June.

The Bank of Canada has set their target of between 1-3% in the short term, before decreasing to 2% by mid-2012. The only question is how they plan to keep the inflation manageable.

Sears Canada Under Threat

Posted by WFG – June 28, 2011

According to analysts, Target’s invasion of Canada is continuing with Sears next on the list. This is due to their declining consumer franchise and the cautious customer in today’s market. Sears Canada has been under pressure from emerging competitors for some time and will continue you do so in the near future. And with the company’s market share dropping by 25 basis points per year over the last 6 years, despite the company benefitting from cost reductions, it doesn’t look promising.

Despite this, Sears Canada a new president and chief executive have been hired. The company has a ‘strong’ balance sheet and what’s labeled as a good fee cash flow. The controlling shareholder, and the company, has been picking up shares and their value may surface. That is, if there’s a bid for Sears Canada’s minority stake.

With Target’s acquisition of Zellers their expansion is growing every year. This leaves only one option remains for Sears Canada, and that’s to start picking up their profits immediatly. Sears Canada may have new management, but they have a tough job on their hands and need to move fast.

Dollarama Attracting New Investors

Posted by WFG – June 28, 2011

With its green and yellow sign all over the country, almost anyone living in Canada will know of Dollarama. Its business is simple enough, it sells you cheaply priced merchandise that people need, or want, to buy. But since its stock went public in 2009 many people weren’t sure how much growth was in a company selling items at such low prices.

The store has seen a fantastic growth since, amazing almost everyone along the way. There were some though that believed in the company and invested early on. These investors have seen almost a double in in share price from the $17.50 starting point to $32.50 today. It’s a price that continues to grow and is down to the company’s rising sales.

More recently, investors have learned that the largest stock holder in the company will be selling its remaining 12.5 percent. Some people think that with this action the Dollarama story may be coming to an end for retail investors. But not everyone agrees.

Some analysts have gone against the theory and state that the selling of these shares will add more liquidity to the already popular Dollarama name. This will attract more investors to the stock, forcing them to add the company to their investment portfolio, and with that Dollarama brand will drive up revenue and profits.

Toronto Stock Market Opens Higher

Posted by WFG – June 28, 2011

Rebounding commodity prices have helped the Toronto stock market open higher today, though investors continue to keep a close eye on the Greek parliamentary vote. The vote will aim to help the country avoid a default on debts.

The Canadian dollar rose 0.13 cents to 101.48 cents against the US dollar as many traders began to gain confidence with the situation in Europe. Many investors hope that the Greek Prime Minister will be able to muster up the votes to receive a euro28 billion austerity bill through Parliament.

Despite the confidence from investors, Greek unions began striking as an attempt to pressure lawmakers against the package. If the unions get their way, and the package fails, Greece will ultimately face default on its debts. Despite the French helping with finances.

While this could end badly for many on the market, commodity traders were far more optimistic. Copper rose to $4.08 per pound and Oil for August gained back some of last week’s losses, rising on the New York Mercantile Exchange 45 cents to $91.06.

In corporate news, reports have hinted that the federal government will announce the sale of Atomic Energy of Canada Ltd. This will be sold to SNC-Lavalin Group, a Montreal engineering firm.