(January 10, 2007) The Meritas Jantzi Social Index Fund has become the first investment fund to invest in MicroVest Capital Management, a privately held U.S. company that provides debt and equity capital and management oversight to microfinance institutions in emerging markets.
The investment takes the form of a $300,000 subscription to US bonds, and both parties hope the deal will attract the attention of other socially responsible investment funds.
Gerhard Pries, vice president of MicroVest, calls Meritas’ investment “a win-win situation for Canadian mutual fund investors and small entrepreneurs around the world,” adding that his company believes business solutions can become the method of choice for eliminating poverty.
Meritas CEO Gary Hawton says his company has committed to investing up to 2% of mutual fund assets in community development. “One of the benefits of investing in community development organizations is that they tend to have immediate and positive social impacts,” he says. Meritas was introduced to MicroVest by Mennonite Economic Development Associates, a founding member of MicroVest, and has been monitoring its development for several years.
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The report says a war on carbon dioxide emissions is to be expected
(January 10, 2007) A CIBC World Markets report says global warming concerns will force all jurisdictions in North America to impose carbon regulations by the end of the decade.
The study predicts that the rest of North America will follow California’s lead by not only imposing a cap on carbon emissions, but also introducing a carbon trading system that will allow larger polluters to buy emissions allowances from companies that stay within the cap.
CIBC believes that going green will be profitable for companies. “North America ignored implementation of the Kyoto Agreement; public concern about global warming is growing,” says Jeff Rubin, chief economist at CIBC World Markets. “I expect this will force governments to declare war on greenhouse gas emissions on their own terms. As this campaign unfolds, the economy’s largest carbon emitters will become increasingly reliant on the economy’s greenest companies for carbon credits.”
Rubin said the study shows Canadian investors should be cautious. The economy will suffer greatly when these regulations come into force due to its dependence on the energy sector. The energy sector currently accounts for 20% of Canada’s carbon emissions.
“What investors need to be concerned about is not the future direction of oil prices, but what the ultimate net return to oil producers will be in a greenhouse gas emissions-regulated environment,” Rubin said. “The experience of carbon trading systems in the US that has been operating for over a decade shows that over time, the market price of emission allowances increases rapidly as emission limits are gradually lowered. Depending on how stringent this cap is, the real investment risk is that a significant portion of the economic rents from rising oil prices could be redirected from shareholders of oil producers to owners of highly sought-after emissions credits.”
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Pure Trading delays its release date
(January 10, 2007) The Canadian Trading and Quotation System announced Tuesday that it is delaying the official launch date of the Pure Trading Continuous Auction Market.
Quotation of the first three share offerings on the e-commerce market will begin on March 9, and the remaining securities will be released within the next two weeks. Pure Trading is scheduled to launch at the end of this month.
The move comes in response to numerous requests for additional test trading and order management systems, the company said in a statement.
Ian Russell, president and CEO of the Investment Industry Association of Canada, expresses confidence that despite the delay, the new electronic investor will be well received by brokers. “Given the level and complexity of changes required to our member companies’ internal processes and technology, the delay is reasonable: it will allow companies to test and refine new processes before going to market.”
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Desjardins expands the fund’s portfolio
(January 10, 2007) Desjardins Financial Security will expand its Millennia III segregated fund to include Franklin Templeton valuation portfolios.
Desjardins said it will become the only insurance company in Canada to offer these quoted portfolios as part of a segregated fund.
“Franklin Templeton’s new Millennia III valuation portfolios are designed to provide a turnkey approach that simplifies the advisor’s role in rebalancing portfolios to meet clients’ investment goals,” said Monique Tremblay, senior vice president of savings and segregated funds at Desjardins.
Franklin Templeton also expects Desjardins and her clients to win. “We are confident that Quotential will provide a distinct advantage to Desjardins Financial Security as it builds a platform of proven investment solutions for its clients,” said Don Reed, president and CEO of Franklin Templeton Investments.
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(01/10/07)
