Canada is attracting foreign cash

[jesseps]

When the global financial crisis blew up in 2008, this country was fortunate enough to be well-positioned. We had lower-than-average government debt and a well-regulated banking system that hadn't plunged into the murky schemes that devastated Wall St.

 

As a result, we've had a less traumatic recession than the U.S., Britain or most other industrial nations.

 

Unemployment went up, but not as high as south of the border, and jobs have been coming back since last summer.

 

And it gets better. We're finding that a stodgy, safe approach to both government and private finance has become an excellent way to lure in lots of foreign investment money, an ongoing plus for stock and bond markets.

 

A widely circulated commentary last week by bond guru Bill Gross, who runs the world's biggest bond fund at California's Pacific Investment Management Co., alerted investors that low-debt countries like Canada and Germany are now among the few places where it makes sense to invest in bonds.

 

Bigger markets like the U.S, Britain and Japan look dicey, he said, because their massive borrowing will eventually lead to more inflation.

 

Another renowned financial adviser, Martin Barnes, editor of Montreal's Bank Credit Analyst publication, weighed in about the same time with a glowing assessment of Canada's fundamental economic and financial advantages.

 

His conclusion: Canada's stock market is more attractive than most.

 

At a time when the drawn-out financial torment in Greece reminds investors that even governments can go bankrupt - or at least come close enough to cause heartburn if you're an investor - this country stands out as a beacon of safety.

 

"Canada's fiscal picture is, by far, the best within the G7" group of major industrial nations, Barnes said.

 

He adds to this an economy that's growing at a healthy pace, some of the best bank regulation in the world and the prospect of growing export earnings as developing nations consume more of our resources in coming years.

 

Investors already are flocking to Canada. Since the wheels came off financial systems in many other countries, money has been pouring into Canadian bonds and stocks.

 

"Last year was right off the charts," said Douglas Porter, deputy chief economist at BMO Capital Markets. Foreign purchases of stocks and bonds in 2009 shot up to $109.8 billion from a more typical $29.1 billion in 2008.

 

About $83 billion of last year's foreign investment in Canadian securities went into bonds, but there was also a very healthy $26.2 billion inflow into Canadian stocks.

 

While this year could well see some moderation in this flood of cash, Porter expects Canada to continue to be a favoured destination.

 

Figures for January, the last month for which Statistics Canada has published data, support that belief, with foreign investment inflows amounting to $11.8 billion, substantially more than the monthly average of $9.2 billion last year.

 

That's not to say that Canada has no negatives. Barnes points out several.

 

Although Canadians are happy to have avoided the housing collapse that devastated consumer finances in the U.S., this country has its own debt problems, he notes.

 

Consumer debt has continued to rise during the recession, now approaching the stratospheric levels in the U.S., and there's plenty of evidence that home prices in this country are overvalued. This produces an economy that could be vulnerable to any new economic or financial shock.

 

In the longer run, Canada's exporters remain too dependent on the U.S. for comfort, especially at a time when U.S. growth is likely be be below-par for several years. Productivity growth in recent years has been "dismal" and Canada faces a demographic squeeze similar to that of most other industrial nations, with an aging population about to put strains on health care and pensions.

 

The good news, however, is that Canada remains better-positioned than most countries. And in the longer run, its healthier government finances and economic advantages could give it a head start in dealing with those nagging structural problems.

 

(Courtesy of The Montreal Gazette)

[Vaillant]

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[rosey12387]

d'ailleur je connais des francais qui investi quelques millions dans lanaudière et un gars du luxembourg qui arrive bientot investir dans les 200M Euros donc si on peux concevoir un projet immobilier stimulant et très innovateur je pourrais lui présenter et je suis certain que ce projet sera réalisé.

 

 

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[Vaillant]

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