Canadian Stocks - Equities in Canada

Also see
Canadian Energy Trusts
Canadian Income Trusts
Canadian Royalty Trusts
Canadian Oil Trusts

Fundamental Analysis

The Canadian Play – (Company Name Abridged)
One of the Major Beneficiaries of the Rise of Zinc Prices

February 28, 2004, an email message was sent to me from an old friend in Beijing, China. “Please find out by any chance if you have friends who can export zinc ores. We have friends who need it as soon as possible”. The next day, I called him and ask him to explain. He responded that his friends are seeking for companies that can export zinc as the production of zinc in China cannot meet the demand. “By the way,” he added, “copper is also fine if you have the connections.”

Although I currently have no contacts with any industrial metal producers, this confirms the fact that as the economic growth of China continues, the demand for industrial metals increases. Investing with the thought of China’s growth does not necessarily mean that we have to invest in companies that are listed in China, Hong Kong, or Singapore. Companies that benefit from the increase demand from China can also be invested if they present good value, and adequate profiting prospects.

CANADA

Investing in Canadian Companies

Many Americans seem to ignore potential investment opportunities in Canada. In reality, investing in Canadian companies would on one hand expose yourself to more companies related to natural resources, on the other hand hedge yourself against the expected depreciation of the US dollar and the appreciation of Canadian dollar.

To learn about an investment firm we have found that specializes in trading directly in international markets, please contact our investment advisors.

The Canadian Dollar’s Appreciation

The Canadian dollar has been appreciating against the US dollar since the beginning of 2003. This is partially because of the trade surplus of Canada, compared to the trade deficit of the United States, as well as the higher Over Night Funding Rate of the Bank of Canada (current rate 2.25%) compared with lower Federal Funds Rate of the US Federal Reserve (current rate 1%). As we probably know, the increase in trade surplus and the increase in key interest rates frequently result in the appreciation of a country’s currency. Please see the following graphs for exchange rates between the US dollar and the Canadian dollar, as well as Canadian trade balance figures. (Bridged)

Canadian Interest Rates

The Canadian central bank, the Bank of Canada, reduced its target rate, or overnight funding rate on July 15, 2003, September 3, 2003, January 20, 2004, and March 2, 2004.