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The energy sector may be one of the country’s key economic drivers, but a survey commissioned by Edward Jones finds that just 23% of Canadians would invest in oil stocks if they had spare money to invest.

The survey did not ask respondents to explain their opinion, but did find that Quebec residents were the least likely to invest in oil stocks, at just 10%. Far less surprising is the finding that Calgary residents are the most likely to invest in oil stocks (40%).

Lanny Pendill, senior analyst, Energy & Utilities, Edward Jones, recommends that 15% of an equity portfolio should be allocated to the energy sector, with a focus on integrated oil companies along with some natural gas plays.

“We continue to see rapid growth in oil demand from emerging economies such as China, India, and even the Middle East, which we believe will provide structural support for growing oil demand for many years to come,” he says. “Given attractive stock prices in the sector, we believe there are good opportunities for investors.”

– Steven Lamb

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Counsel hires BMO to offload real estate

BMO Capital Markets Real Estate has been tapped to market Counsel Corporation’s real estate holdings of 7 commercial retail properties in Ontario.

Counsel, a private equity investor and alternative asset manager, has properties totaling in excess of 800,000 square feet of gross leasable area.

“The sale of the portfolio is consistent with our mandate to acquire, redevelop and improve quality real estate product for the investor marketplace,” says Allan Silber, chairman and CEO of Counsel. “Since 2006 we have been acquiring and adding value to a select set of real estate assets that meet our investment criteria, for our account and on behalf of our partners.”

– Jody White

CPP Fund rises just slightly in Q1

A drop in equity markets in June picked away at CPP Fund earnings in the first quarter, with the investment fund eking out only a small gain to end the first period of fiscal 2011 at $129.7 billion, up from $127.6 billion at end of fiscal 2010.

The fund, through which the CPP Investment Board invests money not required to pay benefits under the Canada Pension Plan, saw a return on its equity investments of minus 1.3% — or a loss of $1.7 billion — in what it called a “challenging” quarter.

“This was a challenging quarter for public equity markets around the world, many of which experienced double-digit declines,” president and CEO David Denison said in a statement.

“This was also a quarter where the CPP Fund benefited from diversification into private equity, real estate, infrastructure and private debt holdings.”

The fund managed to increase its overall holdings through $3.8 billion in contributions.

The fund’s five-year annualized investment rate of return stood at 3% at the end of the quarter. The 10-year rate of return was 5.1%.

The most recent projection pegs the sustainability of the fund at 75 years, with contributions expected to exceed annual benefits paid until 2021.

– The Canadian Press

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U.S. trade deficit jumps

The U.S. trade deficit surged in June to the highest level since October 2008 and imports of foreign consumer goods hit an all-time high. But U.S. exports faltered, representing a setback for American manufacturers.

The deficit jumped 18.8% in June compared to May, widening to US$49.9 billion, the Commerce Department reported Wednesday. The wider deficit came as a surprise to economists who had forecast a smaller trade gap because of lower global oil prices.

U.S. exports slipped 1.3% to $150.5 billion. Sales of American farm products, computers and telecommunications equipment all declined. Imports rose three% to $200.3 billion. Imports of consumer goods surged to a record high as shipments of cellphones, household appliances, televisions and clothing all increased.

The deficit in goods and services, the difference between what America sells abroad and what the country imports, rose to the highest level since October 2008 when it stood at $59.4 billion.

Economists said the wider deficit in June will further depress overall U.S. growth as measured by the gross domestic product in the April-to-June quarter. The Commerce Department initially estimated growth at 2.4% for the second quarter.

– The Canadian Press

(08/11/10)