Connect with us

Investment

Canadian General Investments: Investment Update – Unaudited – Financial Post

Published

 on


TORONTO, Canada, July 06, 2021 (GLOBE NEWSWIRE) — Canadian General Investments, Limited (TSX: CGI) (TSX: CGI.PR.D) (LSE: CGI) (CGI) reports on an unaudited basis that its net asset value per share (NAV) at June 30, 2021 was $56.71, resulting in year-to-date and 12-month NAV returns, with dividends reinvested, of 14.3% and 52.7%, respectively. These compare with the 17.3% and 33.9% returns of the benchmark S&P/TSX Composite Index on a total return basis for the same periods.

The Company employs a leveraging strategy, by way of preference shares and bank borrowing, in an effort to enhance returns to common shareholders. As at June 30, 2021, the combined leverage afforded by both forms of leverage represented 14.8% of CGI’s net assets, down from 16.8% at the end of 2020 and 22.2% at June 30, 2020.

The worldwide spread of novel coronavirus (COVID-19) and its impact on such factors as business operations, supply chains, travel, commodity prices and consumer confidence, and the associated impact on domestic and international equity markets and fixed income yields, is expected to continue to have a significant influence on the equity markets and could significantly impact the value of investments held by CGI. Morgan Meighen & Associates Limited, the manager of the Company, will maintain its consistent, steady, long-term approach of holding diversified, appropriate investments, while pursuing selective new opportunities.

The closing price for CGI’s common shares at June 30, 2021 was $38.65, resulting in year-to-date and 12-month share price returns, with dividends reinvested, of 12.3% and 53.1%, respectively.

The sector weightings of CGI’s investment portfolio at market as of June 30, 2021 were as follows:

Information Technology 27.4%
Industrials 21.2%
Materials 17.0%
Consumer Discretionary 11.3%
Financials 10.3%
Energy 5.5%
Real Estate 3.7%
Communication Services 2.1%
Health Care 0.9%
Cash & Cash Equivalents 0.6%

The top ten investments which comprised 37.8% of the investment portfolio at market as of June 30, 2021 were as follows:

Shopify Inc. 6.0%
NVIDIA Corporation 4.6%
Canadian Pacific Railway Limited 4.0%
Franco-Nevada Corporation 3.8%
First Quantum Minerals Ltd. 3.8%
Lightspeed POS Inc. 3.6%
West Fraser Timber Co. Ltd. 3.3%
Amazon.com, Inc. 3.1%
TFI International Inc. 2.9%
Square, Inc. 2.7%

FOR FURTHER INFORMATION PLEASE CONTACT:
Canadian General Investments, Limited
Jonathan A. Morgan
President and CEO
Phone: (416) 366-2931
Fax: (416) 366-2729
e-mail: cgifund@mmainvestments.com

website: www.canadiangeneralinvestments.ca

Primary Logo

Adblock test (Why?)



Source link

Continue Reading

Investment

Martin Pelletier: How anti-vaxxers can impact your investment portfolio – Financial Post

Published

 on


Three things to watch for to gauge the sustainability of the post-COVID recovery

Article content

Equity markets appear to be taking a breather as we move from early to mid-cycle in the post-COVID recovery, with market participants trying to figure out what that means and where we go from here. Many are wondering if we have seen peak earnings and peak growth, and if the rise of the variant will cause another shutdown.

Advertisement

Article content

You can see this in the muted reaction to some recent impressive quarterly earnings reports in the United States, with some high expectations already priced into share prices. And then investors hit the panic button on Monday, taking the S&P 500 and S&P TSX down to 3.5 per cent from its recent high, while the Canadian dollar has now lost all of its gains and is now flat on the year.

Article content

During these times its important to remember that markets don’t always go up and near-term volatility doesn’t necessarily imply that a looming meltdown is on the horizon. For example, did you know that we’ve counted that the S&P 500 has fallen more than two per cent eight times this year alone?

However, market corrections are quite common and can actually be quite healthy as they flush out those participants on the margin (excuse the pun) without the wherewithal to stand by their longer-term convictions. In that regard, looking ahead there are three main factors worth watching, not only as to the sustainability of this post-COVID recovery but also overreactions allowing for the opportunity to rebalance portfolios.

Advertisement

Article content

The bond market

We continue to believe that this very much is still a central bank-driven market environment. Macro policy will weigh heavily as markets react to indications of where the Fed and other central banks are positioning. For example, markets corrected more than 15 per cent when Bernanke signalled tapering back in 2010, and some argue that the tech bubble was burst when Greenspan indicated hikes were coming in early 2000.

That said, this time around central banks are in a bit of a pickle with rising inflationary pressures offset by the need to keep debt servicing costs down for massive government fiscal programs currently being funded by printing money. In addition, we’ve read that there are a record amount of job openings, but wages aren’t high enough to entice those unemployed going off government assistance.

Advertisement

Article content

This is where the bond market can be a good indicator and worth keeping a close eye on, but at the same time recognizing they don’t always get it right. More recently, long-term U.S. Treasuries (20 year +) have rocketed nearly 12 per cent from their May lows, nearly recouping all of their losses this year-to-date. For those overweight bonds, especially longer-dated ones, we wonder if they’re being given a rare second chance?

Oil prices

Don’t kid yourself. Despite the plethora of talk around the transition to clean energy, high oil prices still have a material impact on the economic recovery in the U.S. Five of the last six recessions have been preceded by a spike in the price of crude oil, with the only exception being the recession in 2020 caused by the COVID lockdowns.

Advertisement

Article content

The good news is that WTI oil prices have fallen from last week’s highs of nearly $75.50, down more than 11 per cent to below $67 a barrel on Monday. This couldn’t come at a better time as main street is in the midst of struggling with supply chain shortages causing inflationary pressures in key household staples such as food, clothing and gasoline.

Household spending & anti-vaxxers

We received some good news out of U.S. retail sales last Friday, showing a rebound month-over-month in consumer spending, which is a primary driver of GDP growth. People are tired of being locked up and have now been given a taste of what it’s like to experience a pre-COVID world again. This also appears to be in its early stages, as U.S. households are still sitting on quite the nest egg, having accumulated trillions in excess savings during the pandemic.

Advertisement

Article content

  1. Suddenly, the mighty EV is our path to salvation. Yet in the U.S. 62 per cent of the country's electrical grids run on fossil fuels and are the second-largest contributor of GHG emissions at 25 per cent.

    Want to save the planet? Invest in oil and gas stocks instead of indirectly supporting OPEC and Russia

  2. A recent Abacus Data poll showed Prime Minister Justin Trudeau may finally get the majority government he so very much desires.

    Why investors should get their portfolios in order before an election is called

  3. It appears that investors have forgotten that return and risk go hand in hand.

    Investors want both sky-high returns and the comfort of safety

  4. The U.S. Federal Reserve is extremely limited in its ability to materially raise rates given the massive amount of debt being taken on by its government to fight the COVID-19 pandemic, writes Martin Pelletier.

    Martin Pelletier: Investors are overlooking this key reason why the Fed won’t rush a rate hike

Looking forward, the trillion-dollar question, therefore, is if the stupidity of those choosing not to get vaccinated is greater than many expect, resulting in the rise of the variant this fall and forcing another lockdown. We hate to position portfolios around stupidity, but it is a risk nonetheless and worth keeping a very close eye on.

In conclusion, pullbacks are signs of a healthy market and more so, given they present a great chance to reposition and rebalance portfolios. This can be a rather difficult thing to do in today’s headline-grabbing environment, but it helps to strip out the noise, have a long-term plan and deploy some form of near-term active risk-management.

Martin Pelletier, CFA, is a portfolio manager at Wellington-Altus Private Counsel Inc. (formerly TriVest Wealth Counsel Ltd.), a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax and estate planning.

Advertisement

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)



Source link

Continue Reading

Investment

Critical Minerals: A New Focus For Foreign Investment Review – Energy and Natural Resources – Canada – Mondaq News Alerts

Published

 on


The Canadian government has recently signalled that it will use
it national security powers to scrutinize foreign investments in
businesses involved in critical mineral production and
supply chains.

This is an important change, given the number of mining
companies listed on Canadian stock exchanges, including many that
have little nexus to Canada except for the listing.

Critical minerals

The Canadian government’s current views on the significance
of critical minerals have been developed in two recent and
important policy statements:

  • A Critical Minerals List, released on March 11,
    which includes 31 minerals considered critical for the sustainable
    economic success of Canada and its allies1. The list is
    largely consistent with a similar U.S. government list of 35
    critical mineral resources.
  • Updated guidelines on the national security review of foreign
    investments, which were released on March 24. The guidelines
    identify areas that could raise national security concerns, and now
    include acquisitions of Canadian businesses involved in producing
    critical minerals.

Critical minerals are viewed as those that are: essential to the
economy of Canada and its allies; and whose supply may be at risk
due to geological scarcity, geopolitical issues, trade policy or
other factors2. A
key concern is with market dominance by suppliers that are state
owned enterprises and the risk of politically motivated supply
disruption. Canada is not alone in expressing concerns of this
nature3.

Investment Canada Act reviews

Under the Investment Canada Act (ICA), the
government has discretion to review virtually any foreign
investment on the grounds it could be “injurious to
Canada’s national security.” The review jurisdiction is
broad and covers mining businesses with part of their operations in
Canada, even if mines themselves are located overseas.

To date, national security reviews have tended to focus on
Chinese investments involving sensitive technology, critical
infrastructure or personal data. Mining has not been an area of
significant concern under the ICA.

Acquisitions of Canadian-listed mining companies, even by
Chinese investors, have generally been viewed as non-problematic.
For example, Zijin Mining’s acquisition of Nevsun Resources,
Continental Gold and Guyana Goldfields in 2018, 2019 and 2020 and
Endeavour Mining’s acquisition of SEMAFO in 2020 were all
approved under the ICA. Nevsun was involved in critical mineral,
copper, although its acquisition pre-dates the identification of
copper as a critical mineral in March 2021.

The only mining transaction blocked on national security grounds
was Shangdong Gold’s proposed acquisition of TMAC in 2020. But
that investment was likely blocked because of TMAC’s strategic
location and other factors, not its gold mining operations. (Gold
is not on the critical minerals list.)

Other mining-rich countries have also started to scrutinize more
closely Chinese investments in the mining industry. Notably, the
Australian government blocked two proposed investments by Chinese
entities related to critical minerals in 20204.

Practical implications

The vast majority of mining investments will continue to receive
ordinary course approvals under the ICA. However, this new policy
highlights that some investments are likely to face significant
scrutiny.

The highest-risk investments will involve proposed Chinese
acquisitions of Canadian mining companies involved in the
production of critical minerals in Canada.

Lower-risk investments will involve proposed Chinese
acquisitions of Canadian-listed mining companies not involved in
critical minerals, where their assets are located outside Canada,
and/or where target businesses are not material producers of
critical minerals.

Non-Chinese investors should generally expect approvals to be
processed in the ordinary course. Indeed, an added consequence of a
more restrictive policy on Chinese investments will likely be
opportunities for non-Chinese investors and possibly in the
development of new and existing mineral projects in Canada.

Finally, when considering potential investments where national
security issues are expected to arise, investors and Canadian
businesses alike should engage counsel and government relations
advisors as early as possible in the transaction planning process
given the complex and evolving nature of the national security
review regime under the ICA.

Footnotes

1 The list comprises the following minerals: aluminum,
antimony, bismuth, cesium, chromium, cobalt, copper, fluorspar,
gallium, germanium, graphite, helium, indium, lithium, magnesium,
manganese, molybdenum, nickel, niobium, platinum group metals,
potash, rare earth elements, scandium, tantalum, tellurium, tin,
titanium, tungsten, uranium, vanadium, zinc.

2 A Canada-U.S. Joint Action Plan on Critical Minerals
Collaboration
, released in January 2020, which aims to
facilitate development of secure supply chains for critical
minerals that are key to strategic industries such as defence,
aerospace and communications. Canada is considered to be
well-placed to supply the U.S. with many of the critical minerals
due to historically strong political and economic ties; a stable
political, economic and regulatory environment; an extensive
mineral endowment; and a robust metals and mining sector. Of the 35
critical metals identified by the U.S., Canada is a sizable
supplier of 13 of such minerals, including being the largest
supplier of potash, indium, aluminum and tellurium to the U.S. and
the second-largest supplier of niobium, tungsten and magnesium.
Canada also supplies approximately one quarter of the uranium needs
of the U.S.

3 Most notably the U.S., European Union, Japan, South
Korea and Australia.

4 These investments were: (1) Chinese state-owned steel
producer, Baogang Group Investment’s proposed A$20m investment
in Northern Minerals Limited; and (2) Chinese lithium chemical
producer, Yibin Tianyi Lithium Industry Co Ltd.’s proposed
A$14.1m investment in AVZ Minerals Limited.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

Adblock test (Why?)



Source link

Continue Reading

Investment

Newcomer SageBlan backs up its belief in Montreal tourism with heavy investment – Montreal Gazette

Published

 on


The upstart hotel investment firm is betting an expected rebound in tourism in Quebec will generate big returns over the next decade.

Article content

An upstart investment firm is plowing hundreds of millions of dollars into Quebec hotels in the belief that a tourism rebound can generate big returns.

Advertisement

Article content

SageBlan Investments has spent about $160 million to buy and revamp four Quebec properties in the past 18 months, including the Vogue Montreal downtown and the former Hôtel Place Dupuis near the Berri-UQAM métro station. Although another $40 million worth of renovations are ongoing, SageBlan is already thinking about its next acquisitions, managing partner and president Gaurav Gupta said.

Article content

“We think the future is bright here,” Gupta, 30, told the Montreal Gazette in an interview.

Whether such optimism is warranted will depend on tourism’s ability to overcome COVID-19‘s economic toll. Local assets may need up to two years to return to pre-pandemic profit levels, the Hotel Association of Greater Montreal said last week.

Advertisement

Article content

Originally from the Toronto area, Gupta teamed up with adopted Torontonians Anil and Bleda Basegmez — Turkish-born, Swiss-raised cousins with a family background in real estate — to create SageBlan in early 2019. All three investors subsequently moved to Montreal and are now taking French lessons, according to Gupta.

Article content

“Montreal is one of the best cities that we’ve ever lived in,” he said. “French is a beautiful language and I want to learn it. Within the next 12 months I’ll have a better handle.”

SageBlan made its first acquisition in mid-2019 with the purchase of Hotel Plaza Valleyfield and closed its latest transactions — the Vogue Montreal and Quebec’s City’s Delta — a year ago, when the COVID-19 pandemic was in full swing.

Advertisement

Article content

“The deals were struck pre-COVID, they were renegotiated during COVID, and closing them at the height of the pandemic was no easy task,” Gupta said. “We are long-term investors and we believe in the resilience of the Quebec marketplace. We would make these investments again today.”

SageBlan’s hotels “are all repositioning plays,” Gupta said. “The properties are being renovated, rebranded or being made more efficient.”

Article content

The acquisition spree means SageBlan now oversees about 1,000 rooms. It has about 500 hotel employees, in addition to about 20 executives.

Before starting SageBlan, Gupta spent several years working for his family’s Sunray Group, a hotel company that owns more than 50 properties and is run by his uncle.

Advertisement

Article content

“In my previous job, I was spending two weeks a month here and I fell in love with Montreal on a couple of fronts,” he said. “On a personal front, I discovered a vibrant city with culture, dining, architecture and this European feeling that you couldn’t capture anywhere else in Canada. On the business front, I felt there was a huge runway for growth, and that Montreal was on the cusp of a real estate boom. It’s a world-class city. That’s the reason we’re focused on Montreal in terms of investment opportunities.”

SageBlan’s most advanced project is the 30-storey, 354-room Hôtel Place Dupuis, which is being converted into a Hyatt Place for about $25 million. Work is due to be completed in September, Gupta said.

“It’s a complete gut renovation,” he said. “We’re trying to bring life back to that hotel, which is located in an under-served area that’s now receiving a lot of investment. We want to make a difference and become almost an anchor for other businesses. The area is gentrifying and will be completely changing over time” with the renovation of Place Émilie-Gamelin and the coming Radio-Canada tower and Molson brewery real-estate projects, he said.

Advertisement

Article content

SageBlan is also busy redeveloping the 148-room Vogue Montreal on de la Montagne St. Once work is done, probably in March, the asset will become the first hotel in Canada to operate under Hilton’s Curio Collection banner. It will include a new ground-floor café.

“This is a true five-star asset,” Gupta said.

As a young company run by thirtysomething executives, SageBlan is eager to adopt cutting-edge technologies for all its hotels. Key features will include mobile check-ins as well as “army-grade” air and water purification systems, Gupta said.

“We’ve spent a lot of time, money and energy so that we can be at the forefront of guest expectations,” he said.

Much time is also being spent canvassing acquisitions.

“As you get settled in a market, it’s good to have your ear to the ground,” Gupta said. “We have a couple of strategic assets that we’re looking at within Quebec and downtown Montreal that would be a good fit for the portfolio. Stay tuned.”

ftomesco@postmedia.com


  1. Montreal hotel association expects ‘slow climb back’ after border reopens

  2. A circular glass and steel staircase brings residents to the second-storey of the $11-million condo.

    $11M Rockstar: Ritz-Carlton penthouse just broke a Montreal record for condo sales

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)



Source link

Continue Reading

Trending