There is plenty of discussion going on throughout the site on various Canadian securities so this post is for creation of a “Canadian Discussion” page.
This was requested by a reader and it is easy to do so we can do it quickly.
Hopefully this will be a page for those with Canadian interest will meet up.
BAM results were very good this morning plus another possible spin off. Recap from this morning Globe & Mail below:
Brookfield Asset Management, in reporting earnings this morning, said it is considering options including separating part of its asset management business in the public or private market. That unit alone would be worth $70 billion to $100 billion and open up growth opportunities, it said. U.S.-listed shares of BAM are up 4.5% in the premarket.
Definitely staying long BAM and all its multiple entities
I have not sold anything in my Canadian Reset account since building it out about two years ago.
I rowed across the lake today to take a look around. The wind out of the south and the frantic interest rate grimaces have driven resets up to the point where I will consider paring gains.
I set two orders to sell on my closest resets which reset 12-22. Both are above par and in lieu of a call, would collect the next div while waiting for a fish to buy me out. I hold about 25 positions as my ladder and have been pushing divs into long dated, already reset OR new issues which are rare. Luckily, there have been a few IG issues.
Without going into every minutiae, I like the slower management game and feel rates will not go to the sky. Rising rates at the top end will be limited. Riding the waves up has been…gratifying. When the next EMT vehicle pulls up to the Fed, I will need cash to lock in some further dated, four to five year resets, at that time AND maybe sell off a few of the fixed rate instruments when ‘sentiment’ is buying. I believe sentiment is particularly a bad indicator to even look at at this time.
My contrarian nature is managing in this manner with the foundation of IG and cumulative (non-NVCC) positions.
Very best to all here!
Joel…I’m very much in the same boat….but while Rate Resets continue on….I wonder about the efficacy of investing in a dying asset class that has almost completely fallen off the radar for large investment grade banks and energy companies.
I just had BNS-H called and ended up reinvesting the money into BNS common stock with a dividend yield close enough to the rate reset that I don’t much notice the difference. Same with a National Bank Rate Reset that matured in 2021.
Any thoughts
Joel / Richard
just my thoughts as a Canuck and having a number of both Cdn and US rate resets as well as common stock. Big difference on Friday was our labour numbers were actually worse than expected which may give the Bank of Canada a bit more thought on how aggressively they raise CDN rates. Also Liberal Govt is apparently going ahead with a special surtax on the CDN larger banks and insurance companies to help offset Covid costs. Of course being a cynic we know that the FI’s will just passed those costs onto the consumer so their good dividend yields should not be impacted. Also added a lot to my CDN energy companies as their cashflow is going to be huge and the dividend increases and special dividends should be quite nice in 2022 for those of us looking for income.
CB….I follow Canadian news through BNN….so I have a limited knowledge of the political landscape. Does Trudeau have the votes to push through the surtax on banks? I would think that the Conservative Party and Québécois would oppose him. I don’t know anything about the positions of the “New Democratic Party”?
Between Biden and Trudeau I’m afraid to touch anything related to Energy though I do own Enbridge Rate Resets. I find the Utilities and Telecom companies still of interest though they seem potentially under attack without warning also.
Richard
The NDP have historically been the party supported by labour unions and considered the most left wing of Cdn political parties. Therefore any legislation which aims to add additional taxation to the large financial institutions would definitely get their support. Cdn telecos and pipelines are also very good investments in my mind and I hold them too. Trudeau needs the huge revenues now being brought in by oil and gas companies to help cover their spending. If you follow BNN look out for Eric Nutall who is a portfolio manager specializing in energy companies. I have used his ideas in the past 18 months on specific companies.
PKI.TO (Parkland Corp). They are back in the news with their recent acquisition and share price is down a bit because of that…maybe a buying opportunity with a decent dividend thrown in.
I’m still reflecting on a not so positive experience I had with Alimentation Couche-Tard going back to March 2021 after suffering with the stock for the preceding six months.
Any thoughts on Parkland positive or negative?
Richard, I have been slowly building a position in Parkland during recent weakness via US OTC (PKIUF) in my IRA. They are a good consolidator it is one place where synergies seem to work- gas stations and convenience stores. Putting in EV charging in these sites as well. Pays monthly div slowly rises annually and divs for US not taxed in IRAs. I always use limit orders. DYODD of course.
Talk about ‘full circle’… I learned about many Canadian stocks as a devotee of Tim’s old ‘Yield Hunter’ site where he maintained lists of things including CA div payers. Parkland is one I have traded intermediate term since those days! (Thanx again Tim for your many years of service to conservative investors!!! ) Bea
Thanks Bea
You’re most welcome Bea — yes the old Canadian issues CanRoy before they got gutted by the goverment.
hi Bea
I owned Parkland a few years ago and eventually sold it as was looking for more growth. A thought occurred to merecently – with gas prices in Canada hitting record highs and forecasted to go higher to me this means people will have less $$ to buy other items in their stores which is no doubt where Parkland makes most of their profit. Also more and more people are just paying at the pump as opposed to going into the store. I’ve attached portfolio mgr comments on Parkland from BNN Bloomberg (Canada’s business channel) with some pros and cons for your consideration. Good Luck!
https://stockchase.com/company/view/967/PKI-T
The world’s first fully digital bank? Interesting CN research for those frozen in.
Versa Bank which has a preferred: VB.PR.A (no otc I am aware of). The common looked more interesting back some months ago, but the rest of the story is very interesting and one can easily see a takeover in their future. Most of their employees are Tech people, a worthy, organized brain trust with proprietary operations.
Pref is 5Reset , next 10-24, just above par now, yielding 6.772% at par. Could not find a DBRS rating. Subject to NVCC.
https://www.prnewswire.com/news-releases/versabank-receives-investment-grade-credit-ratings-a-overall-and-a–sub-debt-ratings-transform-low-cost-deposit-opportunities-301263828.html
Who needs a DBRS rating when you can have an investment grade rating provided by Egan Jones???? Not on the preferred, mind you but A- on subordinated debt… no mention of a rating on the preferred…
LONDON, ON, April 7, 2021 /PRNewswire/ – VersaBank (“VersaBank” or the “Bank”) (TSX: VB), a leader in digital banking and cyber security solutions, today announced that it has received the following investment-grade credit ratings from Egan-Jones Ratings Company, a US Nationally Recognized Statistical Rating Organization (NRSRO) and US National Association of Insurance Commissioners (NAIC)-recognized Credit Rating Provider:
“A” rating for the Bank overall; and,
“A-” rating for the current subordinated debt issue up to US$100 million.
VersaBank’s overall “A” credit rating is comparable to that of several of the “Big Six” Canadian Schedule I Banks.
“This is a truly transformational event for VersaBank that will significantly expand our universe of depositors and open up a new, low-risk lending channel, providing the opportunity to further accelerate our growth by means that were not previously available to us,” said David Taylor, President and Chief Executive Officer, VersaBank. “Moreover, the Bank’s investment-grade ratings are an external affirmation of our low-risk digital banking model, which is a fundamental component of our ability to drive earnings growth and shareholder value.”
“Importantly, the “A-” investment-grade rating for VersaBank’s subordinated debt provides the Bank with a new option for significantly lower-cost, non-dilutive, tax efficient capital that was previously not available to us to fuel our growth – especially beneficial during this current period of record loan growth. These new ratings are especially valuable as we explore the potential to launch our innovative digital banking services in new geographic markets beyond Canada, where we see significant unmet needs similar to those that have driven the Bank’s strong, steady growth.” …
Thinking about starting a position in Quebecor. I already own Telus and BCE. But I can’t seem to find any information on what the difference is between QBR.B and QBR.A….. even on the Quebecor Investor Relations page.
Is there anything to know or is QBR.B the default choice?
Richard- Not feeling like doing anything particularly relevant toward beginning my own New Years resolution of spending more time researching my own investment ideas, I decided to see if I could find an answer to yours just for kicks… I think I found the answer in the notice of Annual Meeting of Shareholders and Management Proxy Circular 2021 – https://www.quebecor.com/documents/20143/223030/Circulaire_QI_En.pdf/8fe1e174-e1e9-b5f4-c98d-0a943a2e045e?t=1618145087267
p 5 – The shares of the Corporation conferring the right to vote at the Meeting are the Class A Shares and the Class B Shares. Each
Class A Share carries ten votes and each Class B Share carries one vote.
The Class B Shares are “restricted securities” (within the meaning of the relevant Canadian securities regulations) in that they
do not carry equal voting rights to those attached to the Class A Shares. The Class A Shares are convertible at any time into an
equal number of Class B Shares.
– Management Proxy Circular 2021 5
As at March 11, 2021, there were 77,034,834 Class A Shares and 168,788,057 Class B Shares outstanding. In the aggregate, all
of the voting rights associated with the Class B Shares represented at that date 17.97% of the voting rights attached to all of
the issued and outstanding voting securities.
Fidelity owns 10.91% of Class B and Quebecor’s Pres and CEO owns .49% of Class A.
The Articles of the Corporation provide that in the event a take‐over bid regarding Class A Shares is made to their holders
without being made concurrently and under the same terms to holders of Class B Shares, the Class B Shares will be converted
into Class A Shares on a one‐for‐one basis for the sole purpose of allowing the holders of Class B Shares to accept the offer.
This right is subject to certain conditions provided in the Articles of the Corporation, including the acceptance of the offer
by the majority shareholder.
Elsewhere I noticed that Class B sharehholders get to elect 25% of the Board as a class.
And with this now done, I’ll go back to playing solitaire in my role as a master procrastinator…..
2Whiteroses…thanks so much for the research and explanation. When I didn’t see any “share” information at their Investor Relations site it didn’t occur to me to dig deeper into The Articles of the Corporation.
Though I’ve always thought of my core competence as: Doing Nothing. I think developing my procrastination skills might be a useful adjunct to that, until the next correction, collapse or calamity comes along to shake me out of my 21st century stupor.
Look TSE:CGO Cogeco Inc
I post this here as it is OTC related but not to their ‘devil’ rule! re Foreign OTC trading: I found out from Fidelity that eff 11/5/21 the DTCC( depository trust clearing corp) dumped 700+ foreign OTC tickers from their clearing service. FIDO and Vanguard use this to clear ‘f’ share OTC trades…so any of these tickers now you will incur a $50 fee to trade OTC. Of course you can buy on foreign exchanges but often these trades cost currency exchange fees and foreign trade fees.
I found out on an Australian otc stock I held and had been trading on a core position thru the year.. shares traded in OCT- no fee.. in Dec. I tried to trim the position- and the $50 fee popped up before executing!
fees, fees, fees! of course ADRs have fees too and often on the dividends paid on the shares as well. Always something in this ‘no fee’ world.
CU.PR.J began trading today.
http://prefblog.com/?p=42790 (description)
DBRS 2high credit rating
Other interesting CU issues in comparison to most of our issues with some callable and trading below par, at a just sub 5% range.
May be a let ’em call and go into some high ig? Annuity like stuff.
The common has just achieved ‘dividend aristocrat’ status, which to me, with great credit, indicates management success.
Look around and as requested no ideas on if OTC available in US.
I picked the common, no QDI issues, and a higher yield.
Which broker do you use to buy shares of Canadian Utilities (I am assuming you are trading on the TSX)?
Best choices are Canadian brokerage Royal bank, TD, or American Interactive Brokers.
Points of Frustration:
To avoid currency exchange issues you will need to have an account that will allow you to transact in USD and CDN funds.
Placing your buys of Canadian securities in a Canadian account will avoid the problem of getting dinged exchange conversion on every dividend payed.
After your purchase make sure your Canadian account balance is not accidentally negative or they will charge you interest at month end. This can be cleared up by performing and account transfer between US->CDN.
If you are doing big bucks you might want to put a currency hedge in place. I have never done this preferring to keep my Monopoly money for reinvestment.
Fidelity has a decent international trading platform. You have to sign up for it which takes a minute or two. I buy all my Canadian equities and Rate Resets on the TSX. Fidelity charges something like $CAD19.95 per trade. If the trade is large enough its not difficult to absorb the fee. Canadian dividend or interest income is also easily managed on their website.
I only used it for trading on the TSX but it was very simple for both buying and sellilng. Just don’t expect your preferred stock dividends to be given qualified dividend tax treatment.
Regarding comments made about Canadian preferred issues:
It would be very helpful to me, and perhaps others here, to have the corresponding OTC symbol for each stock noted in your comment. As a U>S> citizen without access to direct trading on the Canadian boards, I often find it difficult to decipher which OTC symbol is equivalent to the Canadian symbol discussed. ( or, if there is a site where these are all listed, that would surely help )
Thanks
Depending on who your broker is, you may be able to trade on the TSX. It was easy on Fidelity’s platform.
Hello TimW
I use TDA, which has never allowed direct international/global trading, but when Schwab takes over, it will be available. Thanks for helping.
Interesting 4th quarter results for Canada’s big 6 banks – BMO, TD and BNS were +ve surprises while CIBC, RY and NA missed analysts estimates. All the banks as expected had sizable dividend increases as they were finally allowed to do this (and of course at same time executive bonuses were allowed to be paid again and they too were sizable at over 20% on average). With CDN banks having an oligopoly they have always been a good long term hold. There is an theory regarding the banks similar to the “Dogs of the Dow” theory where each year you buy the worst performing bank as on average over the next 12 months it will be one of the top performers. As of now YTD performance shows BNS lowest at 21% followed closely by RY at 22% (these returns exclude dividends). Top performer bank YTD is BMO 41% (which was the laggard last year). Just some food for thought this weekend.
link to info: http://prefblog.com/?p=42742
New Issue: CU Straight Perpetual, 4.75%
The offering is being made only in the provinces of Canada by means of a short form prospectus and the closing date of the issue is expected to be on or about December 9, 2021.
– Rated 2H / DBRS
-Did not see this on the last three issues, but if available, on IBKR, first date available is on the date of closing. Seems price action on IPO is much like issues here, lately cheaper in a few days.
I have the common in US, CDUAF, bot in March at 23.95 before the runup..has pulled back a little but at US$28 or so still yields 5% w small div raises..would add on further pullbacks. The CA$ has been a little weak but I think it will strengthen, their central bank is more in tune w raising rates/stopping QE and the economy is strong w minerals, o/ng, grains etc. Have it in the IRA no w/h tax..a ‘sock drawer’ buy for me w the price I got. Bea
Bea
I’ve been noticing the recent pullback in the loonie as well.
Started a position in Rogers Sugar (RSGUF) yesterday. A consumer staple company with a yield of ~6.6% that has just signed a multi-year contract with it’s union.
thank you Greg, will have to look into it. I had some Maple Leaf Foods (otc MLFNF CA: MFI) I bot in July at US$19.65, planned to hold but it jumped to $25 and took profits collecting one div, it has pulled back a little; not a real yield play but divs rising, family controlled, capex pretty much out of the way to grow into the future. Mostly pork products. I have done really well for the most part w CA/HK/CN stocks in 2020/2021. My int’l allocation is tilted toward CN/HK at this time mostly. Bea
Divided seems pegged a bit high relative to earnings, but who knows?
New Canadian issues have come to market taking advantage of low rate environment.
New PWF Straight Perpetual 4.50% Series 23
Power Corporation to use proceeds to redeem Series I 6.00%.
Closing October 15, 2021.
New GWO Straight Perpetual 4.50% Series Y
December 31, 2026 redeem for cash the Series Y Shares in whole or in part, at the Company’s option, at $26.00 per share. December 31, 2027; $25.75 per share. December 31, 2028; $25.50 per share. December 31, 2029 $25.25 per share. December 31, 2030; and $25.00
Closing October 8, 2021
Emera Straight Perpetual, 4.60% Series L
November 15, 2026 the Company may redeem all or any part of the then outstanding Series L Preferred Shares, at the Company’s option without the consent of the holder, by the payment of: $26.00 per share. November 15, 2027; $25.75 per share. November 15, 2028; $25.50 per share November 15, 2029; $25.25 per share. November 15, 2030; $25.00 per share
Closing September 24, 2021
micahc, thanks for the notification.
Reminds me that I miss Bob-in-DE’s input here…
me too – interesting all the new issues were perpetuals under 5% — with CDN inflation rate and Liberal (minority) govt still having no plans for getting debt under control would not be jumping on these
I posted it 10-11-21 right here friends!
Our friend Yuriy has added them to those sheets except the GWO issue.
The only other CN news I know is the DBRS has increase CSS credit outlook recently.
Been following Prefblog from Canada by Jim Hymas every few days and will try to repost news here.
Many eyes, many voices!
A maple syrup offensive starts.
thx Joel
Sometimes a more studied approach to investing is required beyond just another lead. Some years ago, I have immersed in many of the CN income issues that began here. During the early time, I did a diligence understanding into the split shares and their embedded concepts. I have not found any convenient spreadsheet or service for them. There are many moving parts worth understanding for when the opp arises, it may not be very often OR through a tip not understood. Somehow the brain just coughs up that previous work and experience.
The split shares are worth understanding. The primary benefit, the one at the top of the structural list is that the TERM (think callable) is set by the Board periodically for the disposition of income and often, call writing incomes. The use of ‘preferred” in this case, is also different and must be understood; it is the application of a management tool.
I have wrangled into two and since sold one out on a decent gain. The other I am collecting at 9.2% at my basis and it becomes ‘changeable’ by the Board in March ’23. Will prob be gone by then.
THAT is why I do my own research, …just straight work, no sweetners needed.
Fully agree, and… that straight work starts with as much data as possible. Until we find a service or regularly updated spreadsheet for these issues (which would not replace that work, only supplement it), III leads will have to do for me… to start with. Thanks again.
http://www.prefinfo.com/
click on ‘investment fund’ in the top menu to display data
( just informational )
BCE announces renewal of Normal Course Issuer Bid for Preferred Shares
MONTRÉAL, Nov. 4, 2021 /CNW Telbec/ – BCE Inc. (BCE) today announced that the Toronto Stock Exchange (the “TSX”) has accepted a notice filed by BCE of its intention to renew its normal course issuer bid (“NCIB”) to purchase up to 10% of the public float of each series of BCE’s outstanding First Preferred Shares that are listed on the TSX (the “Preferred Shares”). The period of the NCIB will extend from November 9, 2021 to November 8, 2022, or an earlier date should BCE complete its purchases under the NCIB. BCE will pay the prevailing market price at the time of acquisition for any Preferred Shares purchased plus brokerage fees payable by BCE, and all Preferred Shares acquired by BCE under the NCIB will be cancelled.
The actual number of Preferred Shares repurchased under the NCIB and the timing of such repurchases will be at BCE’s discretion and shall be subject to the limitations set out in the TSX Company Manual.
The NCIB will be conducted through the facilities of the TSX as well as alternative trading systems in Canada, if eligible, or by such other means as may be permitted by securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements under an issuer bid exemption order issued by securities regulatory authorities and block purchases of Preferred Shares. Purchases made under an issuer bid exemption order will be at a discount to the prevailing market price.
https://www.bce.ca/news-and-media/releases/show/BCE-announces-renewal-of-Normal-Course-Issuer-Bid-for-Preferred-Shares
Consensus EPS Estimate is $1.28
Consensus Revenue Estimate is $6.04B
Canadian Natural Resources (NYSE:CNQ):
Q3 Non-GAAP EPS of C$1.77; GAAP EPS of C$1.86.
Cash flows from operating activities:
C$4,290M in Q3/21, increases from C$2,070M in Q3/20 and C$2,940M in Q2/21.
Board of directors has approved a 25% increase to the quarterly dividend to C$0.5875 per share, payable on January 5, 2022. This increase in dividend marks the 22nd consecutive year of dividend increases.
It’s an early Christmas present from the CDN oil & gas companies as dividend increases and inceptions are happening across the board. Energy companies are definitely feast or famine so enjoy it while it you can. Hopefully with these prices it can last a couple years
Expecting a div increase from Freehold and Prairie Sky Royalty which is consistent with their operating history and declarations. Both on OTC too: FRHLF and PREKF.
Sorry I averaged a quarter out of Freehold about a month ago.
I don’t know if you follow Rogers Sugar (RSI on TSX or RSGUF on OTC), now that the company has settled bargaining issues at Lantic’s Montreal Refinery, is now a good time to buy the stock? Any thoughts appreciated.
Re: RSI: I left a comment here about five weeks ago. I have owned for awhile and followed it for years. Pretty conservative bunch. Divy regulars, but may not be highly leveraged to the price of sugar in general since market is controlled. Peoples eat every day. Read their website info. When it goes up I will sell/trade.
CDN banks and lifecos were given the green light yesterday to increase their dividends, do share buy backs and of course increase CEO pay. Just a question of how much is already baked into share price.
Canada ends quantitative easing? Those CRAZY Socialists!
Five year yield jumps.
Yup go figure – our economy has still not reached pre Covid levels. Plus Junior’s new environment minister is a former Green Peace activist who has never owned a car (so you can imagine Alberta’s opinion for its oil & gas sector) At least the half a cent jump in CDN$ helped US investors exchange wise and jump in yields helped my F&F CDN prefs yesterday.
Below are top CDN exports — so sure Junior why not kill our oil & gas sector:
Trade item Value
1 Crude Petroleum 75,259
2 Cars 47,632
3 Refined Petroleum 18,715
4 Aircraft, Helicopters, and Spacecraft 7,322
Bro Trudeau made a good choice QE creates deflation and with all the cheap foreign goods waiting to be imported we will have another deflationary jolt once supply chains are fixed.
War on oil&gas will continue as it’s virtuous and right. Although a lot of people will question its virtue once receiving newly minted $1200 utility bills this coming winter.
Energy industry has entered nuclear winter mode paying for maintenance out of free cash flow to maintain production levels. New pipeline capacity hits in 2023-2024 so no point expanding production until then. Expectation is to continue firming up balance sheets, big buybacks, and next year large 10% dividend increases.
Oil and gas industry qualifies an investment based upon net present value 10. Borderline projects hover around 30-35% return rates with new regulations and increased borrowing rates push most projects unprofitable until oil is able to sustain $90-100 bbl so higher energy prices for longer should be an expectation.
SU just announced great qtrly results and doubled their dividend. Up over 10% today. Many other CA O&G on the NYSE are up in sympathy. They are all lean and mean from the hard times, now printing money and vowing to put it in shareholder pockets instead of sticking it back in the ground for more production.
Laissez le bon temps rouler but, yes, the poor will suffer this winter.
completely agree — Banks and oils are going to be paying some juicy dividends in coming year and am overweight that sector for income purposes (plus long term growth in financials). Am up over 100% in most of my small cap energy shares and had two announce a dividend this week going forward. Energy is a sector like mining you make lots of money at the right time but don’t fall in love with the company or you’ll give it back in a couple years. Luckily am in position to help our kids & grandkids as young families with kids are in for a rough ride the next 5 yrs.
Happy Thanksgiving to everyone in Canadia! Market closed today. (My own pet name)
Give thanks for new IG issues:
– GWO.PR.Y a high rated, new, fixed perp began trading Friday and traded down toward par at end of day., current ask showing 24.99. Very nice 12-26 first call, with graded call premium afterwards by $0.25 from $26 to par in 2029. A good “annuity holding”.
– PFW Series 23 probably trading by Friday, fix, perp, 4.5%.
– EMA.PR.L has been trading at 4.6% coupon. Already trading at a decent premium.
Gobble…gobble.
Before anyone asks I see no US OTC symbol.
Joel not too sure I’d be looking at perps right now with the prospects of rising interest rates and inflation eating away at the capital value. I still like my 6%+ BBD prefs knowing that Junior (or his replacement) would never let Bombardier go under
Canadian and US year five year starting to separate. Has been a spread of 10bps or less and now a spread of 15 bps. Canadian yields have been significantly higher than the US in the past when commodities are doing well. We could see Canadian preferreds going higher from both higher rates and a higher Loonie. In previous commodity bull markets Loonie has reached par against the USD.
and for a year or so about 10 yrs ago when CDN$ sas about 10-15% above US$ and my wife and her friends were always going across the Blue Water Bridge to shop in Pt Huron. Huge line up of cars/trucks daily with 1 hr+ wait times .
Re: RNW:
https://transalta.com/investors/press-releases/transalta-announces-strategic-investment-by-brookfield-renewable-partners/
It’s like a bad dream with these corporate raiders. Yeah, I want BEP at 27x. ..that’s fair…they are all geniuses as long as you can sit in an office in Toronto and refi on a straightline interest rate decline over your ENTIRE ego-career.
Go out a nd REALLY build SOMETHING!
I know…it’s legal and we gots us lots of attys!
Both Canada and US five year close to 18 month high.
Spread is tightening.
Wonder why the Fed may taper on the long end?
Long end is always about housing.
…and it’s red hot…
Canadian market does not have as many different types of swap lines and repo mechanisms as the fed.
Treasury market is short on t-bills which is driving short end rates negative.
Fed is trying anything possible to prevent negative rates as nobody knows what will happen. Reverse Repo is crow barring t-bills above 0.05%. While a second facility allows long end (10y+) maturities to be swapped overnight effectively making them t-bills.
The whole maturity curve should slowly flatten out.
Everything that I like (banks, mreits, etc) like steep yield curves so this is not a positive development.
Bro Trudeau seems to have found some resistance to his good looks. Receiving a rough ride from the anti-vax / anti-mask groups due to party stance. Old fear and uncertainty tactics with the conservatives are not playing as well within the base.
Will be paying attention to the first debate. To see if any points can sway the more moderate crowd away from more tax and spend.
Was thinking that it was going to be an easy majority but the other hogs want a position on the trough.
Your analogy is quite accurate. These ‘political animals’ have the ability to hit their own food supply button too. Quite a contradictory and destructive method of ‘governance and management.
Decades ago we had a group in 4H and all had the duties of learning how to moderate food supplies to one or many animals. Most domesticated animals will easily eat themselves to death in short order. Indeed now a computer can monitor and do it best.
Really a valid Parable for today. Maybe a computer can do it better without referring to a rewrite of many thousands pages of new handbooks rewritten annually by the animals themselves.
surveys show 75% of CDNs say this election was unnecessary – looks good on the Liberals to have it backfire on them. So a PM who was a trust fund kid and only worked as a drama teacher supported by a Finance Minister who majored in Russian history will hopefully be shown the door (with full govt pensions of course). At least pretty well any other combination of a likely minority govt should be an improvement. Although a lot can happen in 17 days in politics
Conservatives have a history of foot in mouth disease when playing with the other farm animals.
Campaigns have not found their goat issue to raise the electorate out of its slumber. Anything is still possible.
Bombardier common and prefs got pop up today on speculation BBD will be added back to the TSX index in a few weeks with the next rebalancing. Better to be lucky than smart sometimes as I picked up some up the higher yielding prefs a month or so ago after their relatively good quarterly results.
I posted a comment on Freehold and Rogers Sugar a bit lower in the thread here. I remembered an older website that has been modernized, but went to visit again today: Stockchase,com.
An interesting posting site for CN brokers regarding everything Canadian. I used to follow PennWest, Baytex, Alta, Crescent Point, etc before the return to C-Corps. I learned about a few others and the big oilys that stuck in my mind since brokers mention all sorts of opinion about their favs.
Fun site that I am glad to see still is around.
If you like the smell of hydrocarbon royalties, here’s TD’s take on a Canadian that’s raised it’s divvy for 4 straight quarters:
https://www.investorvillage.com/uploads/13942/files/FRUTDAug2021.pdf
Fortunately, I added BEFORE the latest 25% increase. Blind hogs, etc.
JMO
So why weren’t you speaking up about this in March 2020? 🙂
Well, you do have to believe that oil is not gonna go back down there in the near future. We’ll see.
Predicting oil prices is a challenge. More pipeline capacity certainly boost the wellhead price on Canadian crude and up those royalty payments.
Bob, Camroc has been unflappable in his sniffing and continual investing of hydrocarbons through the highs and the lows year after year. Rumor has it he is invited and attends all the Duncan family (EPD) reunions also, ha.
And the annual BBQ? Great company.
Camroc – At least there is one person that is a friend to the hydrocarbon industry. In Canada drilling for hydrocarbons went out of vogue with governments enhanced interrogation techniques on full display royalties depend on continuous replacement drilling.
Oil sands long life low decline with minimal maintenance capital assets have been the last oily bastion of hope for operators with existing permits. CNQ/IMO/SU are my three horseman of the apocalypse.
Math is simple whoever is the lowest cost operator through the economic cycle will eventually own all the assets. Hint – CNQ
Yep. I doubt using oil goes away anytime soon. I remember when frozen (TV) dinners came on aluminum trays. Now they’re all plastic, whose use continues to escalate. My house is full of it. My little fuel-efficient car has about 300 lbs. of plastic in it. Prolly why it’s so fuel-efficient. lol
And all those developing countries yearning for what we have. That will take reliable power, fueled by hydrocarbons. I doubt they’re impressed by any virtue signaling going on in the developed world.
I could go on, but it’s Sunday and tomorrow is a hard workin’ day. “Blue Monday, how I hate blue Monday…”
JMO
Camroc – Not contesting your oil thesis as I believe its true. Its only a matter of time before tragic underinvestment comes home to roost.
Good ‘ole Fats…. I miss him…….. “This Is Fats Domino” was the very first vinyl album I ever bot on my own…… I think I was 11 years old.
Ottawa will gladly sinking almost infinite sums into money loosing businesses that are politically favoured while at the same showing at best benign neglect toward the evil O&G industry, which doesn’t need government largess to thrive.
Ottawa’s lack of involvement in the Line 5 issue was stunning. Yes, a shut down would have hurt western oil producers but the bigger harm would have fallen on eastern oil consumers. Most of the refined products produced at Ontario and Quebec refineries come from Line 5 crude. It is Ontario and Quebec that elect Mr. Dressup, which is the only reason Ottawa ever got involved. If it were just a western Canadian issue Justin would never have put on his big boy pants.
FRU/FRHLF: Very specific operators. Amazing story that they just keep managing over decades. They make my kind of vitamins. Have been around a long time. Younger brother is Prairie Sky. Both disciplined payout share of royalties with very LOW overhead. Very interesting, very Commonwealth story which is reflected on their website. Worth the read. I’ve talked about them here several times.
KNOW that they are pay as percentage of 3Xnet, goes up, goes down, but pays true royalties share based on sales.
I have been accumulating for a long time and sold off a trigger order at US$8 on the F-OTC shares, which recently allowed a relocation to FRU in the IBKR account about 15% lower.
Close to moving ALL CNs, prefs and commons, over now. That account was a labor born of activities of interacting on THIS SITE at a good time. Thanks for all the leads to those contributors! Resets and Oilys.
I’ll throw out a flyer here, a CN common that I have followed for a long time, RSI/RSGUF, pure play on sugar, though regulated on exports, which has just jumped on Sugar News and a general commodity rolling enthusiasm. Staid, conservative, hands-in-the-pockets kind of management, divy payers.
Nuff Said, Eh?
I just looked at the list of SEC Rule 15c2-11 Restricted Securities as published by TD Ameritrade on August 2, 2021 and I am happy that none of my Canadian securities are now on the list, to wit:
ALTGF (ALA.PR.U) AltaGas
ERRAF (EMA.PR.C) Emera
FXFLF (FFH.PR.C). Fairfax Financial
In fact, I saw no preferred stocks of these companies on the list. Also, I saw no preferred of Enbridge on the list either. However, go to your own sources. I make no warranties or representations as to the accuracy of the info provided by TD Ameritrade.
For those interested in SLMNP (LyondellBasell Advanced Polymers, Inc. (non-Canadian), it wasn’t on the list either.
David – good of you to post. I started to look at the list I had, which dated from June, and realized how many changes had been made. For example, the two Altagas issues that were on the June list are now gone, so presumably can he traded.
The latest list, or so I believe, is dated Aug 9:
https://www.tdameritrade.com/retail-en_us/resources/pdf/TDA101550.pdf
Anyone see news on the Brookfield takeover of IPL? Has it happened? Has Brookfield determined if there is going to be a proration between cash and stock?
Randy – Brookfield had to extend offer to Aug 20th as they need 55% vote in favour and only had 52% at Aug 6th original deadline. They upped offer to $20 cash
Thanks. Did they change the stock offer?
Brookfield last increased its bid in mid-July to $20 a share in cash to Inter Pipeline shareholders, up from $19.50 a share. Its original hostile bid in February was worth $16.50, which was comprised of a mix of cash and shares.
Brookfield’s latest revision also allowed Inter Pipeline investors to take some shares at an elevated price instead of cash, offering one-quarter of a Brookfield Infrastructure Corp. share for each Inter Pipeline share. Inter Pipeline’s board ultimately decided to back this offer after rival bidder Pembina Pipeline Corp. bowed out of a bidding war.
I would think that the fat lady has sung. With Pembina gone and just a few more votes to pick up it seems over. Agree?
yes BAM is always going to prevail if it wants to own a company – deep pockets after all with growing cashflow year after year
Please end the long suffering interpipeline shareholders pain with a quick takeover and better management.
Later today, Canada will sign an agreement with Moderna for construction of a vaccine plant somewhere in the great white north. The PM is Justin Trudeau. The “Minister of Innovation” is Francois-Philippe Champagne. The announcement was made in Montreal and first reported by the Montreal La Press.
Trudeau is expected to call an election for later this year. His Liberal Party is absolutely dependent on the province of Quebec for reelection. So, too, Ontario.
I’m taking bets on Lethbridge, Alberta.
JT and the Liberals are not scared of the abysmal competition at the taxpayer trough.
Conservatives have fielded another 2×4 and NDP have reverted back to union first and give away everything politics which appeal to a minority of voters.
My first thought was we could re-purpose the Edmonton Superlab but its already been demolished as it was expected to be run by Union group.
https://www.cbc.ca/news/canada/edmonton/whatever-happened-to-the-alberta-superlab-1.5693158#:~:text=It's%20official%3A%20Alberta%20government%20cancels%20Edmonton%20superlab&text=In%20June%2C%20it%20became%20official,project%20had%20already%20been%20spent.
LOL — yes nothing like Junior preparing to send the country into an election nobody wants as their are predictions for a 4th wave of covid thanks to the Delta variant. Junior just follows his PMO office mandarins who are pulling his strings.
I’m betting on the new Moderna plant going to Quebec using an old Bombardier mothballed facility (they have lots) with lots of gov’t $$ used to grease the wheels.
You must be a bombardier pensioner. Any cost recovery for Quebec would be a blessing.
Saturday morning musings from the great white north after enjoying a Friday night baseball game in London (intercounty minor minor league but still a great night with the grandson).
— Brookfield needs Bob to vote his shares in favour of their take over of IPL as they still have not reached the required 55% approval level ; so no choice but to extend their offer
— for yield I put some more $$ into Bombardier prefs this week as they showed continued improvement with latest quarterly results. This is purely a ‘feeling in my gut’ decision as on paper they are still a basketcase but knowing neither the federal or provincial (Quebec) govts would ever let this company go under I figured what the heck.
Have been using CCS.PR.C for my cash account.
Bombardier and air Canada bailout kings living off Canadian taxpayer oxygen. People get angry at the General Motors bailout but atleast taxpayers recovered something.
For those who think that Bombardier still makes snow mobiles you are stuck in the 60s. The company bought Lear some years ago and they now make jets. Bombardier is kinda the poor mans Gulfstream.
so very true about GM. Co-operators certainly very solid company just a question how the 5% will do if/when interest rates start showing upward trend.
So, do you think Bombardier may be too French to fail?
Justin delights in sticking it to money making Alberta every time he can while at the same time he has infinite amounts of money to shovel into the cash drain that is Quebec.
Ils ne laisseront pas Bombardier faire faillite, mais dans les moments difficiles, ils n’aideront pas les actionnaires.
sacre bleu mon ami
I like minor league baseball. I can watch the Bluerocks from the best seats in the house, be there in 15 minutes, and have a good time, all for very little money.
Or I can drive to Philly, spend an hour and $50 parking my car on some guy’s lawn and another hour retrieving it at the end of the game, lay out $100 for tickets and another hundred for a couple hotdogs and beers, and sit where I need a telescope to see the game. All while sitting among what must be about the worst “fans” in professional sports.
For me, it’s not a hard choice.
Plus you gotta love that snorting moose mascot…
Bob, you forgot to add the cost of $10 worth of batteries to throw from stands when going to Philly games, ha.. Oh wait, that was at “The Vet” and I think they quit doing that activity anymore, lol..
The Philly “fans” are animals. I would go to a pro wrestling match before I would go to a Flyers game. There are more fights in stands than there are on ice.
Brookfield strikes again. Following the very successful launch of tracking stocks BEPC, BIPC and BAMR, Brookfield is doing it again. This time with BBU, Brookfield Business Partners. BBU is a Bermudian partnership and the tracking stock, BBUC, will be a Canadian corporation. As with the other Brookfield pairs, BBU and BBUC are designed to be economically equivalent. BBUC will be exchangeable into BBU but not vice versa.
The difference between the two is tax treatment. Depending on who you are (individual, institution) and where your are (US, Canada, elsewhere), one will work better than the other. Institutions generally can’t own partnerships but they can buy the corporation tracking stock, so BBUC is their only option.
If you are a “U.S. person” for tax purposes, BBU has no withholding and the distributions will be a mix of whatever. But no UBTI. (BEP is similar and generates almost 100% qualified dividends).
BBUC will get you 15% withholding and will be a qualified dividend (my guess) or ROC, or possibly a mix. If you put it in a qualified account the 15% withholding tax goes to zero.
I don’t own BBU and have never done a deep dive. It’s a mixed bag of business that don’t fit into the mandate of either BEP or BIP. It is not as compelling to me as BAM itself or BEP or BIP. But you may like it.
BBUC will be distributed to existing BBU holders later this year. There is no “IPO”. It will trade NYSE and TSX after that. Yes, SEC registered. You can actually trade it.
I know the 31st landed on a Saturday but has anyone received their Toronto Dominion Common Stock dividend yet? I received all my TD rate reset divs but no common stock as of 6:47PM EST
Posted on my account for Aug 4th.
Thanks
As the resident Canuck on III thought I would pass along a recent article from Globe & Mail to the US investors holding CDN prefs/common shares. Outlook now is for the CDN $ to depreciate over next year as opposed to further gains. Which of course is good for my US$ holdings but -ve for you holding CDN$ securities.
Also for those following the Interpipeline/ Brookfield/Pempina saga two proxy advisory firms have now come out supporting BAM’s latest offer.
Scotiabank takes the axe to its Canadian dollar forecasts
DARCY KEITH
PUBLISHED 2 DAYS AGO
UPDATED 1 DAY AGO
Scotiabank has scaled back its forecasts for how much the loonie will take flight over the next year and a half.
As part of some “significant changes” to its forex forecasts released late Friday that extend well beyond the Canadian currency, Scotia now believes the loonie will close this year at 1.22 in US. dollars, or 81.96 cents US. Previously, it expected the Canadian dollar to be trading at 84.03 cents U.S. come the end of 2021.
And by the end of 2022, it now only sees the loonie at 1.25, or 80 cents US – well shy of the 82.64 cents U.S. it had been forecasting previously, and barely above the 79.61 cents it was trading at late Friday.
A lot of Scotiabank’s rethink has to do with it now believing the U.S. dollar has further to advance against major currencies. “While we think there are still reasons to be cautious on the general outlook for the US dollar (USD), it does appear as if its broad decline has stabilized since June and structural headwinds (rising US deficits) will likely be overlooked for now,” Scotiabank’s chief forex strategist Shaun Osborne said in a note Friday. “The window for the sort of USD losses we have been expecting to play out over the balance of this year has narrowed considerably now that the Fed has set the stage for tapering asset purchases in the coming months, a message that may be reinforced at the Fed’s August Jackson Hole symposium.”
But the bank’s less bullish view on the loonie also reflects domestic developments and the currency’s inability to capture greater upside in recent weeks.
“Indeed, we no longer look for the USDCAD to push under 1.20 into H2 2020 and early 2021, per our recent forecasts. The CAD’s weakness through mid-year has run counter to positive underlying fundamentals; the CAD has had a solid opportunity to strengthen against the USD but has not been able to press its advantage. The Canadian economic recovery should pick up speed in the second half of the year and reinforce the relatively more hawkish profile of the Bank of Canada compared to the Fed through the rest of this year and into early 2022. CAD-positive yield spreads and still (generally) firm commodity prices have failed to support the CAD in recent weeks but should still provide some anchoring for the CAD through the latter part of the year, assuming market volatility eases,” Scotiabank said
“We feel there is some fundamental value in the CAD at current levels which should lift the CAD later in Q3 or in early Q4 when seasonal trends are more CAD-supportive,” he added. “But technical charts suggest that USDCAD holding major, long-term support around the 1.20 point earlier this year represents a significant turning point for the USD decline from the 1.47 peak made in early 2020 and we expect the USD to hold above the 1.20 (83.33 cents US) level moving forward.”
Scotiabank’s new forecast for the Canadian dollar puts it more in the same camp with some others on Bay Street.
Katherine Judge and Avery Shenfeld, economists at CIBC World Markets, for instance believe the market’s recalibration of U.S. rate hikes will weigh on the Canadian dollar for the rest of 2021. They expect the dollar will end the year slightly below 79 US cents.
They believe next year could bring more of the same, as Canadian economic growth and inflation lag U.S. numbers.
“As a result, look for the Canadian dollar to continue to lose its luster through 2022 on more aggressive policy action from the Fed,” the CIBC economists said in a note earlier this month.
The Battle between BIP and PBA is interesting. BIP clearly doesn’t want to give up. It’s clearly a high conviction play for them.
I am very leery of Institutional Shareholder Services (and similar outfits). ISS is a private company, unaccountable to anyone, unregulated by anyone, out there giving “advice” on significant transactions. It’s controlled out of Europe and with Canadian roots, too. I don’t listen to them.
I own both BIP and PBA and would rather see the deal get done with Pembina. I don’t want the cash part of BIP’s offer as that would make the transaction taxable to me. Also, I see far more long term value creation with a PBA deal as there are real, physical synergies to be realized.
BIP’s strategy appear to be to offer a little bit more than whatever PBA is offering and to outmaneuver PBA in the media war.
thanks for the heads up on those firms Bob – I hold both BAM and Pembina however my miniscule # of shares isn’t too likely to hold much sway