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Larry Berman: Factoring currency implications in your investment decisions – BNN

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The Bank of Canada has an excellent site that can help investors understand what factors move the Canadian dollar. Canada represents about three per cent of the equity world and about five per cent of the bond world, so the majority of investment opportunity resides in foreign currencies. This leads me to discuss the biggest investment factor in portfolios: currency returns.

Since the world left the gold standard in 1971, the annual impact from currency movements has been in the 5-10 per cent range, depending on the country. I know, most investors do not consider this at all, but it’s at least as large as the average price change in assets (stocks and bonds).

So what makes a currency move? There are two trade accounts that govern the types of money flowing. What is known as the current account and the capital account. The current account factors in data like the difference between imports and exports of goods and services. This is known as the balance of trade. The capital account deals with longer-term investments like securities (stocks and bonds), but also long-term investment. For example, a foreign corporation building a manufacturing facility in Canada. It creates jobs and taxes here, but the profits tend to flow back to the company’s home country. With all of these types of transactions, there is a net amount of money flowing in or out of the country.   

When a government runs a balance of payments deficit, there is more money flowing out and the currency will tend to weaken. Canada used to be a big supplier to the U.S. auto sector and our largest export remains energy products.

Our exporting competitiveness is a major factor. A weak currency makes our exports cheaper.  In 2019, 22 per cent of Canadian exports were mineral fuels (oil and gas), and vehicles accounted for 13.8 per cent.

When U.S. President Donald Trump said he wants more jobs in the U.S. and that the nation’s existing trade deals are bad, this is bad news for Canada.

Canada is a big exporter of steel and aluminum too, but neither factor into the top 10 export categories. Incidentally, gold exports (about five per cent) are on the rise with the dollar value on the rise, if not the quantity.  

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Graphic courtesy of BankofCanada.ca

Over the past 20 years, we see that Canada has been less reliant on the U.S. economy for capital flows, but it will always remain the biggest contributor. The biggest increases are China, Europe and Mexico.

This leads to my call for the week: The recent strength in the Canadian dollar is not at all due to improving trade outlooks for Canada (beyond some price increases in commodities). It’s not at all due to an improving fiscal outlook or an improving business climate that would attract foreign investment.

We are past the best before date in the energy sector due to lack of government support for investment in our largest export sector and possible global peak demand. It has got caught up in the general reduction in “flight to safety” flows in the U.S. dollar. And that has occurred, in part, because the U.S. is doing so much worse in terms of battling COVID-19, looming election uncertainty, and the massive debasement of the dollar as the Fed’s balance sheet is expanding at lightning speed.

I see the Canadian dollar weakening back below 70 U.S. cents (1.4286) over the next year and therefore I would look to own those U.S. assets via ETFs without a currency hedge.

My overall economic outlook is not bullish. DLR is the Horizons’ U.S. dollar money market ETF that gives exposure to the greenback. If you are sitting in cash because you are worried about elections or market valuation risk, consider sitting in the U.S. dollar.

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Follow Larry online:

Twitter: @LarryBermanETF

YouTube: Larry Berman Official

LinkedIn Group:  ETF Capital Management

Facebook: ETF Capital Management

Web:  www.etfcm.com

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Lakeview Hotel Investment Corp Announces Second Quarter 2020 Results – Canada NewsWire

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WINNIPEG, MB, Sept. 30, 2020 /CNW/ – Lakeview Hotel Investment Corp (“LHIC”) is pleased to report its financial results for the Quarter ended June 30, 2020. The following comments in regard to the financial results should be read in conjunction with the June 30, 2020 financial statements and Management Discussion and Analysis which are available on the SEDAR website www.sedar.com.

The effects of COVID on hotel occupancies for the second quarter were severe. As this pandemic continues, it is not clear how long it will remain and the extent that it will continue to affect the tourism and hospitality sector. LHIC continues to safeguard employees and customer safety, reduce and/or defer expenses and minimize non-essential expenditures. At this time it is very difficult to determine how long it will take for business levels to normalize.

Following is a comparison of the operating results for the three and six months ended June 30, 2020 compared to the results of operations for the comparable period in 2019:


Three months ended

June 30,

Six months ended

June 30,


2020

2019

2020

2019

Hospitality Revenue





Room

1,072,350

3,158,156

2,947,608

5,701,627

Food & Beverage

103,519

577,473

541,411

1,094,275

Other

465,674

216,904

591,072

402,586

Total Revenue

1,641,543

3,952,533

4,080,091

7,198,488

Expenses

(3,265,942)

(7,006,061)

(8,268,087)

(12,372,110)

Gain on sale of income properties

1,366,737

Net income (Loss)

(1,624,399)

(3,053,528)

(4,187,996)

(3,806,885)

Basic and diluted income (loss) before income tax per share

(0.083)

(0.156)

(0.214)

(0.195)

Reconciliation to funds from Operations





Add (deduct)





Amortization of income properties

83,409

355,964

170,913

736,937

Amortization of franchise fees

4,116

374

8,233

748

Gain on sale of income properties

7

(1,366,737)

Amortization of right-of–use assets

3,322

7,149

Income from Lakeview Flag Licensing General Partnership

(18,226)

(92,016)

(85,357)

(182,954)

Loss (income) from Lakeview Flag Management General





Partnership

(44,751)

(26,911)

(81,429)

Unrealized loss (gain) on change in fair value of interest rate swap

(2,096)

57,492

Provision for impairment of income properties

1,160,248

328,513

1,160,248

Funds from Operations

(1,555,093)

(1,672,483)

(3,792,605)

(3,475,431)

Basic and diluted funds from Operations per share

(0.080)

(0.086)

(0.194)

(0.178)

Contributions to reserve account

(29,963)

(66,102)

(69,535)

(110,956)

Adjusted funds from Operations

(1,585,056)

(1,738,585)

(3,862,140)

(3,586,387)

Basic and diluted adjusted funds from Operations per share

(0.081)

(0.089)

(0.197)

(0.183)

Lakeview Hotel Investment Corp is listed on the TSX Venture Exchange under the symbol “LHR”.  Lakeview Hotel Investment Corp received income from ownership, management and licensing of hotel properties.

The TSX Venture Exchange nor its Regulation Service Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Lakeview Hotel Investment Corp

For further information: Rudy Beyer, Chief Financial Officer, Tel: (204) 975-0623, Fax: (204) 957-1697, Email [email protected]

Related Links

http://www.lakeviewhotels.com

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Enforcement Notice – Decision – IIROC Sanctions Vancouver Investment Advisor Dwight Cameron Mann – Canada NewsWire

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VANCOUVER, BC, Sept. 30, 2020 /CNW/ – Following a penalty hearing held on July 6 -7, 2020, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) imposed the following sanctions on Dwight Cameron Mann:

a)      A fine in the amount of $250,000

b)      A compliance audit of Mann and the Mann team shall be conducted by an independent compliance auditor, subject to certain terms and conditions, for the period of July 1, 2020 to June 30, 2021.

Mr. Mann is also required to pay costs in the amount of $50,000.

The Order is effective September 21, 2020. The penalty decision will be available at www.iiroc.ca. In an earlier decision dated February 25, 2020, the Hearing Panel found that Mr. Mann engaged in misleading conduct in certain clients’ accounts. The Panel also found that he made an unjustified promise of specific results and failed to report a client’s complaint.

A copy of the Sanction Order can be found at:
http://www.iiroc.ca/documents/2020/28aff63b-48f4-402d-9f17-b9f78058ecdc_en.pdf

The decision on Liability can be found at:
http://www.iiroc.ca/documents/2020/57596579-c509-44fd-9284-b4aa37bf21bb_en.pdf

IIROC formally initiated the investigation into Mr. Mann’s conduct in May 2018. The alleged violations occurred while he was a Portfolio Manager and a Registered Representative with a Vancouver branch of National Bank Financial Ltd., an IIROC-regulated firm. Mr. Mann is currently a Portfolio Manager and a Registered Representative at the Vancouver branch of Canaccord Genuity Corp., an IIROC regulated firm.

Documents related to ongoing IIROC enforcement proceedings – including Reasons and Decisions of Hearing Panels – are posted on the IIROC website as they become available. Click here to search and access all IIROC enforcement documents.

*  *  *

IIROC is the pan-Canadian self-regulatory organization that oversees all investment dealers and their trading activity in Canada’s debt and equity markets. IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while supporting healthy Canadian capital markets. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of 175 Canadian investment dealer firms and their nearly 30,000 registered employees, the majority of whom are commonly referred to as investment advisors. IIROC also sets and enforces market integrity rules regarding trading activity on Canadian debt and equity marketplaces.

IIROC investigates possible misconduct by its member firms and/or individual registrants. It can bring disciplinary proceedings which may result in penalties including fines, suspensions, permanent bars, expulsion from membership, or termination of rights and privileges for individuals and firms.

All information about disciplinary proceedings relating to current and former member firms is available in the Enforcement section of the IIROC website. Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by IIROC-regulated firms is available free of charge through the IIROC AdvisorReport service. Information on how to make investment dealer, advisor or marketplace-related complaints is available by calling 1 877 442-4322.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) – General News

For further information: Enforcement Contact: Warren Funt, Vice-President, Western Canada, 604 331-4750, [email protected]; Media Contact: Andrea Zviedris, Manager, Media Relations, 416 943-6906, [email protected]

Related Links

www.iiroc.ca

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The Defensive Investment You Want – The Motley Fool Canada

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The market is rife with volatility. You can call it the “2020 effect,” but investors continue to be wary over what will happen in the final quarter of the year. There’s a good reason for that concern too — the COVID-19 pandemic is still disrupting businesses around the world. This makes the need for adding one or more defensive investments to your portfolio all the more important.

Defensive investments typically provide a necessary service and generate a stable recurring revenue stream that isn’t (too) impacted by the pandemic. Rogers Communications (TSX:RCI.B)(NYSE:RCI) is a great example that is worth exploring in more detail.

The defensive investment you need

Telecoms are widely regarded as defensive stocks. What few investors may realize, however, is that the importance of telecoms has grown immensely since the pandemic began.

Home internet connections have become a lifeline for office workers that are now working full time from home. Students are also sharing that internet connection to partake in remote learning. Wireless devices have become an essential means of communication during the pandemic, and subscribers are chewing through more data than ever.

In the most recent quarter, Rogers saw the total number of subscribers to its unlimited data plan hit 1.9 million, reflecting a 36% increase in 2020.

More than results

In terms of results, Rogers reported results for the second quarter in July. In that quarter, sales came in 17% lower than the same period last year, at $3.2 billion. That drop wasn’t entirely unexpected, as retail stores and sporting events were mostly shuttered during that period. Still, the company managed to generate $468 million in free cash flow.

Turning to Rogers media segment, the company saw revenue drop 50% in the most recent quarter. This wasn’t entirely unexpected, as nearly all sporting events were canceled due to the pandemic.

Looking towards the next quarter, Rogers should see much-improved numbers, as stores and sporting events continue to resume operations.

Another interesting point about Rogers is the quarterly dividend on offer. Rogers currently provides a respectable 3.76% yield to investors. The rate is lower than its Big Three peers, but there’s a good reason for that. Rogers suspended the scheduled annual upticks to its dividend, opting instead to invest in the company and pay down debt. That’s not to say that Rogers won’t provide further increases, but rather, it is prioritizing the health of the company. As a point of reference, the last dividend hike effective in March of last year.

In short, Rogers remains a stellar defensive investment that should be a core part of any well-balanced portfolio.

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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.

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