Since
the beginning of the year, the canadian market has showed promise.
In fact, at December 17, 1999 the TSE 300 Index posted a return of 24.9%
compared to 15.9% for the S&P 500 Index. This progression was
mainly attributable to the increase in the natural resource sector as well
as industrial products.
The natural resource sector of the
TSE 300 was not the only sector which did well. The metal and minerals
sector also did well posting a 31.8% return. The oil and gas sector
returned 20.1% and forest products an incredible 39%. One of the
main factors contributing to the success of the canadian market was
the improved stability of asian markets. The industrial products
sector was also influenced by the strong increase in the technology field
by firms such as Nortel Networks, BCE, JDS Uniphase and Celestica.
BCE and Nortel Networks represent more than 20% of the TSE 300.
Did you know ...
For the first time since April 1st, 1995, investors withdrew more money
from the market than invested. In November 1999 investors withdrew
50 million dollars. James Dancy, analyst for the National Bank believes
this was mainly due to the nervousness of potential Y2K problems. Two
other factors were also the potential hikes in interest rates as well as
the high evaluations of equity markets.
According to a survey conducted by Merrill Lynch, mutual fund managers
are reducing their exposure to bonds because of the favorable economic
conditions wordwide. Managers are also expecting two interest rate
hikes in the United States for the year 2000. Japon and Europe are
two countries they favor. Technology and other interest rate
sensitive sectors are popular. According to economists from the T.D.
Bank, Canada will be one of the G-7 countries which will experience the
strongest economic growth in 2000.
They are also predicting the creation of 350 000 new jobs by canadian
companies and an increase of 3.0% in G.D.P.
Red Hat Inc., a company which commercializes a version of the Linux
computer language saw its share price increase 864% on its first day of
trading although its losses were tagged at 7.2 million dollars.
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News
Dynamic Mutual Funds has joined every other fund company by launching
five new 100% canadian eligible funds for RRSP season. They are :
Dynamic Americas RSP, Dynamic Europe RSP, Dynamic Far-East RSP, Dynamic
International RSP and Dynamic Power American RSP.
During the last fed meeting on December 21st, 1999, the Fed decided
to keep its discount rate at 5% and the inter-bank rate at 5.5%.
However, the Fed is very cautious concerning inflationary pressures.
There is a consensus among many economists that the american central bank
will increase rates as early as Febuary or March of this year.
Mackenzie Mutual Funds has announced that John Smolinski will become
vice-president of investments and will have a key role in the team of managers
for the Ivy Group. Previously, Mr Smolinski was head manager for
Royal & Sun Alliance Equity Fund.
"An investment operation is one which, upon thorough analysis, promises
safety of principal and a satisfactory return. Operations not meeting
this requirement are speculative." Benjamin Graham, father and founder
of value analysis.
Mackenzie is now offering four new 100% canadian eligible funds.
They are ; Universal European RSP, Universal International Equity RSP,
Universal Science and Technology RSP and Cundill Value RSP. Fidelity
Investments plans to do the same with some of their foreign funds within
the next few weeks. We will keep you posted.
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