AIMCo CEO Evan Siddall.Amber Bracken/Amber Bracken
Alberta’s public-investment manager says it has started divesting all of its small measure of Russian holdings in response to the invasion of Ukraine and the ensuing humanitarian crisis.
Alberta Investment Management Corp., or AIMCo, which holds more than $160-billion in assets for provincial pension plans and endowments including the Alberta Heritage Savings Trust Fund, said in a news release that the decision is “both values, and value-driven” and reflects the change in geopolitical risk.
At the end of last week, AIMCo’s exposure was about $159-million, or roughly 0.1 per cent of its total assets, according to the fund manager’s spokesperson Dénes Németh. But by this week, that number had dropped.
“Our equities team has succeeded in divesting some of our holdings in Russian securities in difficult markets,” AIMCo chief executive Evan Siddall tweeted on Tuesday. “They are now below $99 million, down significantly since yesterday, and are a small fraction of our clients’ portfolios.”
AIMCo’s news release also said the Russian holdings now represent 0.16 per cent of the entire $48.7-billion public-equities portfolio and areexternally managed. “Beyond public equities, AIMCo does not have any direct exposure to Russia.”
Alberta Premier Jason Kenney said Tuesday he appreciated that Mr. Siddall was “taking measures immediately to liquidate those small Russian holdings that they have.”
Mr. Kenney has taken a hard line on Russia since last week, when he called for global sanctions on Russia’s oil and gas industry and for Ottawa to be “relentless” in freezing the Canadian assets of allies of Russian PresidentVladimir Putin. On the latter point, he noted provincial governments don’t have that power.
When asked about whether he knows of Russian investments in Canada’s oil and gas industry, the Premier replied that he doesn’t have “a comprehensive readout of what Russian interests may directly or indirectly be involved in the Canadian energy sector.” Alberta Energy told the Globe and Mail that the department doesn’t have a tool to track all Russian investments, but is searching to see if there are any oil or natural gas leases held by Russian companies.
“We have not found any yet,” Jerry Bellikka, chief of staff to Energy Minister Sonya Savage, said Tuesday.
Western countries have already imposed sanctions on some parts of the Russian economy, but given that oil and gas comprise more than 60 per cent of Russia’s export revenues, cutting off those shipments is one of the main economic weapons left that could hurt the country.
Canada announced a ban on Russia’s oil shipments on Monday, but the move is somewhat symbolic, because this country has not bought any Russian crude since 2019. However, Natural Resources Minister Jonathan Wilkinson said Tuesday “this new ban will ensure we import none going forward.”Other Western powers, far more reliant on Russian imports and worried about a sharp spike in already high fuel costs, have so far been reluctant to take the same step.
Mr. Kenney continued on Tuesday arguing that Canadian oil and natural gas production, and export facilities, can displace “conflict oil” from Russia and other dictatorships. He has long lamented that the Keystone XL pipeline, which would have allowed for vast new volumes of Canadian heavy oil to go directly to the U.S. Gulf Coast – a project in which the province was a direct investor – was turned down by U.S. President Joe Biden in January, 2021. However, Mr. Kenney said he believes U.S. lawmakers are rapidly coming to terms with the strategic importance of North American oil and natural gas production.
“I do believe we have been – to coin a phrase – mugged by reality here, and the world is now seeing what Alberta has been saying for years,” he said. The Premier said contrary to what critics might say, he doesn’t relish the current situation, or that the conflict in Ukraine is driving energy prices higher. “This is not about Alberta cynically taking advantage of this gross invasion and political instability. This is Alberta saying that we can be part of a long-term solution.”
Mr. Németh said he believes AIMCo is amongst the first provincial pension fund managers to divest of Russian holdings, and to issue a statement saying as much. But he noted that the Caisse de dépôt et placement du Québec said last week it recently sold hundreds of millions of dollars in stock of seven Russian companies.
Other Canadian pension plans seem to avoid owning Russian public companies. A search of S&P Global Market Intelligence shows no Russian public-company holdings for Canada Pension Plan Investment Board, which makes broad disclosure of its positions.
Most major Canadian pension plans have more limited or no disclosure of equity holdings, outside of what securities regulators in various countries require.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
