A story on regulatory secrecy alerted me to the fact that Joe Oliver is no more honest than his predecessor:
When Finance Minister Joe Oliver went to Europe in June, he boasted about how the country’s financial system has been ranked the world’s soundest by the World Economic Forum for six years running.
The links supporting this assertion are from the Ministry of Finance, 2014-6-23:
◾For the sixth year in a row, the World Economic Forum rated Canada’s banking system as the world’s soundest.
and from the Ministry of Finance, 2013-9-5:
“I am very pleased to see that the World Economic Forum has ranked Canada’s banking system as the soundest in the world for the sixth consecutive year,” said Minister Flaherty.
These liars rely on the fact that nobody actually reads the World Economic Forum’s Global Competitiveness Report. The full report for 2013-14 makes no bones about its methodology:
The World Economic Forum’s Executive Opinion Survey
remains the largest poll of its kind, capturing the insight of more than 13,000 executives into critical drivers of their respective countries’ development. This scale could not be achieved without the tremendous efforts of the Forum’s network of over 160 Partner Institutes in carrying out the Survey at a national level. It gathers valuable information on a broad range of variables for which data sources are scarce or nonexistent. For this reason, and for the integrity of our publication and related research, sampling and comparability across the globe remain an essential and ongoing endeavor of The Global Competitiveness and Benchmarking Network.
It’s a poll – as I have pointed out before. Responses by Canadian interviewees regarding Canada are compared to responses from interviewees from other countries about those countries. In Canada, the poll is administered by The Conference Board of Canada, an organization I consider to be little more than a joke, but that’s beside the point. The point is, it’s a poll. There is no straight-up comparison of Canada’s financial system’s strength vs. the strength of any other country’s financial system. It’s a measure of confidence only, and the blind led the blind into the abyss, trumpeted by sleaze-bag politicians and abetted by shoddy journalism.
However, the Globe and Mail article does illuminate the current government’s desire to politicize everything:
The argument against Mr. Jenkins’s and Mr. Thiessen’s recommendation is a philosophical one: in a democracy, major decisions should be made by elected representatives. “I believe in elected people,” the late Jim Flaherty, Canada’s finance minister during the financial crisis, told me when I asked him in October 2013 whether he thought Canada needed a more rigorous regulatory regime. “I don’t think bureaucrats, and God love them, should run the world.”
DBRS commented on RONA, proud issuer of RON.PR.A:
Going forward, DBRS believes that stabilization of RONA’s earnings profile will remain challenging in the near term, particularly as the Company will continue to face intense competition in an uncertain demand and housing market, highlighted by significant regional disparity. RONA’s typically high inventory balance and working capital position at the end of Q1 traditionally unwinds through the course of the year. DBRS believes that despite the recent decline in balance sheet debt, RONA’s credit risk profile will remain pressured until it displays sustainable growth in organic operating income and cash flow. DBRS will continue to monitor the Company’s operating performance through the disproportionately significant spring and summer periods (Q2 and Q3 F2014), which should provide a greater indication of the impact of RONA’s restructuring and repositioning efforts, key to whether the rating will stabilize in the current BB (high) rating category. Should RONA achieve stabilization of same-store sales and operating income, as well as a modest improvement in key credit metrics through the end of Q3 F2014, the rating outlook could stabilize. However, should RONA’s credit risk profile continue to display deterioration in same-store sales, operating income and key credit metrics through the end of Q3 F2014 (i.e., lease-adjusted debt-to-EBITDAR over 4.0x and lease-adjusted EBITDA coverage below 4.5x), a further downgrade to BB and Pfd-4 could result.
It was a mixed day for the Canadian preferred share market, with PerpetualDiscounts down 6bp, FixedResets gaining 7bp and DeemedRetractibles off 4bp. Volatility was minimal. Volume was low.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 3.07 % | 3.06 % | 19,709 | 19.52 | 1 | 0.0820 % | 2,587.0 |
| FixedFloater | 4.17 % | 3.40 % | 28,470 | 18.63 | 1 | -0.0876 % | 4,163.9 |
| Floater | 2.86 % | 2.94 % | 45,991 | 19.87 | 4 | 0.2592 % | 2,775.6 |
| OpRet | 4.02 % | -2.68 % | 78,392 | 0.08 | 1 | -0.0784 % | 2,720.0 |
| SplitShare | 4.25 % | 3.92 % | 52,168 | 4.00 | 6 | -0.0110 % | 3,120.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0784 % | 2,487.2 |
| Perpetual-Premium | 5.52 % | -2.81 % | 81,732 | 0.09 | 17 | -0.0785 % | 2,430.8 |
| Perpetual-Discount | 5.23 % | 5.07 % | 108,433 | 15.23 | 20 | -0.0638 % | 2,582.9 |
| FixedReset | 4.40 % | 3.62 % | 194,808 | 8.58 | 77 | 0.0749 % | 2,557.5 |
| Deemed-Retractible | 4.98 % | -0.37 % | 119,542 | 0.09 | 43 | -0.0352 % | 2,553.9 |
| FloatingReset | 2.68 % | 2.21 % | 91,772 | 3.84 | 6 | -0.1053 % | 2,511.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| CIU.PR.C | FixedReset | -2.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 21.35 Evaluated at bid price : 21.66 Bid-YTW : 3.40 % |
| BAM.PR.B | Floater | 1.08 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 17.74 Evaluated at bid price : 17.74 Bid-YTW : 2.98 % |
| RY.PR.L | FixedReset | 1.29 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2019-02-24 Maturity Price : 25.00 Evaluated at bid price : 26.66 Bid-YTW : 2.65 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| ENB.PR.F | FixedReset | 48,764 | Nesbitt crossed 41,000 at 24.75. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 23.14 Evaluated at bid price : 24.66 Bid-YTW : 4.00 % |
| ENB.PF.E | FixedReset | 46,500 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 23.11 Evaluated at bid price : 24.98 Bid-YTW : 4.12 % |
| BNS.PR.Q | FixedReset | 43,351 | TD crossed 34,800 at 25.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2018-10-25 Maturity Price : 25.00 Evaluated at bid price : 25.48 Bid-YTW : 3.13 % |
| BAM.PF.F | FixedReset | 31,450 | National bought 10,000 from Nesbitt at 25.48. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 23.28 Evaluated at bid price : 25.41 Bid-YTW : 4.23 % |
| FTS.PR.G | FixedReset | 23,825 | TD crossed 15,600 at 24.97. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-07-28 Maturity Price : 23.21 Evaluated at bid price : 24.92 Bid-YTW : 3.60 % |
| MFC.PR.E | FixedReset | 23,400 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-09-19 Maturity Price : 25.00 Evaluated at bid price : 25.32 Bid-YTW : 0.89 % |
| There were 18 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| CIU.PR.C | FixedReset | Quote: 21.66 – 22.98 Spot Rate : 1.3200 Average : 0.9812 YTW SCENARIO |
| RY.PR.C | Deemed-Retractible | Quote: 25.53 – 25.86 Spot Rate : 0.3300 Average : 0.2039 YTW SCENARIO |
| W.PR.H | Perpetual-Premium | Quote: 25.09 – 25.42 Spot Rate : 0.3300 Average : 0.2179 YTW SCENARIO |
| GWO.PR.F | Deemed-Retractible | Quote: 25.56 – 26.00 Spot Rate : 0.4400 Average : 0.3551 YTW SCENARIO |
| MFC.PR.F | FixedReset | Quote: 23.29 – 23.75 Spot Rate : 0.4600 Average : 0.3764 YTW SCENARIO |
| ENB.PR.A | Perpetual-Premium | Quote: 25.35 – 25.55 Spot Rate : 0.2000 Average : 0.1244 YTW SCENARIO |