On
February 2nd, 2000, the Fed's Board of Governors raised its official market
rates by 25 basis points. Thus, the discount rate increased to 5.25%, and
the daily finance rate, to 5.75%. This move would counteract the strong
economic growth that usually arouses inflationary pressure. The day after
the Fed took its decision, the Bank of Canada raised its discount rate
by 25 basis points up to 5.25%. In so doing, the Bank of Canada aims to
keep inflation in the 1% to 3% bracket.
Reacting to Alan Greenspan's Humphrey-Hawkins
speeches, the main American stock markets showed a significant drop. For
the month ending February 25, the Dow Jones and the S & P 500 indexes
recorded, respectively, a 10.59% and 5.44% decrease. The Dow Jones dropped
the most. Since the beginning of the year, it lost 14.22%, breaking below
the 10,000-point mark. Only the Nasdaq remained insensitive to Alan Greenspan's
speeches. Investors seem to have preferred technology stocks to blue chips.
During February, the TSE 300 index
increased by 7.47%, 2.68% less than the Nasdaq. The TSE 300 outdid the
S & P 500 by 12.91%. Meanwhile, since the beginning of the year, the
TSE 300 index progression was slight. Only 4 out of 14 sectors have known
a positive performance: convenience and manufactured goods, public utilities
and communications. Vincent Lépine, economist at La Financière
Banque Nationale, believes that within 12 months the TSE 300 should reach
the 10 000 level.
Did you know ...
Quebec has created its first portfolio manager training centre. L'École
des Hautes Études Commerciales (HEC) and Financial Services of La
Caisse de dépôt et placement du Québec provide young
professionals and finance graduate students from all the Quebec universities
with physical and computer resources. These resources enable them to test
new models and financial products.
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According to a study led
by Statistics Canada, total contributions to RRSP went up from $13.5 billion
in 1991 to $24.1 billion in 1997, a 78.5% cumulative increase. Indeed,
the larger number of investors (from 4.6 million to 6.1 million) and their
average contribution increase (from $3,000 to $3,900) explain this result.
News
Previously under Larry Kennedy's management, the Guardian Canadian Balanced
Classic fund will now be Kevin Klassen's responsibility. Mr. Klassen has
a 12-year experience in portfolio management, with a bias towards the value
approach.
Altamira has launched three new 100% RRSP eligible funds: Altamira
RSP Japanese Opportunity, Altamira RSP Science & Technology and Altamira
RSP e-business.
Since February 7, 2000, Dynamic Infinity International fund has changed
name to Dynamic Infinity American in order to better reflect the portfolio
content.
As of April 1, 2000, Ms. Patti Satterthwaite will manage the Emerging
Markets Portfolio fund. She will also maintain her responsibilities with
the Fidelity Latin American Growth fund.
@rgentum Management and Research Corporation offers a new 100% RRSP
eligible fund, a clone of @rgentum International Master Portfolio. The
manager uses computerised models exclusive to @rgentum to create a portfolio
of 50-large cap companies, all of them located in developed countries.
Guardian has a new 100% RRSP eligible fund: Guardian RSP Global Technology.
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