Check this article out as it appears in our March Issue of Business Review Canada. Trust us, it's way cooler to read this article when you can flip through our user-friendly e-reader.
TSX Market Capitalization: $459.5 billion
Trends: The TSX is up 2,500 points, a staggering 22%, from this time last year. The TSX is also poised to eclipse its all-time high of 14,969, which it hit in July of 2008, just before the global financial crisis brought down equity markets around the world. Additionally, the recent TSX-London Stock Exchange merger will cut overhead costs for investment banks trading on the markets. What does this mean for the financial industry? It means massive revenue increases and operating cost reductions across the board. We wouldn’t be surprised to see the financial industry up its market cap leading figure to $500 billion.
Key Players: Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce, AGF Management, Brookfield Properties, Canadian Western Bank, Dundee Corp, Manulife Financial, National Bank of Canada, Onex, Riocan, Sunlife Financial
TSX Market Capitalization: $435.8 billion
Trends: Energy prices are starting to spike globally, thanks largely to the revolution in Egypt and the uprisings across the Middle East. Soaring oil prices globally will drive up the demand for Canadian oil. 2011 could also be a big year in the oil sands. Many Canadian oil and gas giants have partnered with Asia energy companies such as PetroChina to speed up development. While those returns probably won’t be seen for two to three years, overall increases in production are to be expected. Factor in the multiple pipelines in construction, the oil sands and the Canadian energy industry will be extremely active, as usual.
Key Players: Vermilion Energy, Uranium One, TransCanada, Talisman Energy, Penn West, Nexen, Imperial Oil, Husky Energy, Encana, Enbridge, Cenovus Energy, Birchcliff Energy, Advantage Oil and Gas
TSX Market Capitalization: $372.8 billion
Trends: Canada is known for its world-class mining sector and is one of the leading producers of raw materials in the world. As the global recovery presses on, countries around the world, especially the emerging economies will be in need of the metals, wood and other elements to sustain growth. Canadian material exporters should see a return to normal, if not a great year. On top of that, there is a growing concern about food shortages, meaning farmers are going to urged to plant more, driving up the demand for the agricultural fertilizer potash. And lastly, should gold continue its record prices, he materials industry is positioned to outperform all other Canadian industries.
Key Players: Yamana Gold, West Fraser Timber, Thompson Creek Metals, Taseko Mines, Potash Corp., Iamgold, Goldcorp, Barrick Gold, Agrium
TSX Market Capitalization: $90.4 billion
Trends: The industrial segment of the Canadian economy is diverse, encompassing construction, manufacturing and supply chain companies. As such, industrial performance is largely influenced by multiple external factors, such as government spending, consumer demand and B2B commerce. As governments around the world invest in transit systems and infrastructure, many Canadian industrial, like Bombardier and SNC-Lavalin, could do well. Should the global economic recovery stall, or worse a double dip recession sets in, industrial demand will slump. Economic activity or lack thereof will dictate the performance of major supply chain players like Canadian Pacific and Canadian Pacific.
Key Players: Aecon, Bombardier, CAE, Canadian National, Canadian Pacific, IESI-BFC, Toromont Industries, SNC-Lavalin, Stantec, Air Canada
TSX Market Capitalization: $70.1 billion
Trends: Canadians have been saving and paying down debt for two plus years now, affecting the performance of major retailers. It remains to be seen whether Canadians will splurge on discretionary spending this year, as their American counterparts are largely expected to do. Spring should continue to be a strong quarter for do-it-yourself retailers such as Rona while the summer should see a drop off. Expect the fall to bump up spending with summer vacation ending, school starting and the holiday season swinging into full gear. The loonie has been flirting with parity against the greenback, and should the loonie exceed the dollar, Canadian retailers will have to compete with American retailers. Spoiler alert: Wal-Mart will make its Canadian debut towards the end of the year, further clouding the outlook.
Key Players: Thomson Reuters, Tim Hortons, Canadian Tire, Magna International, Rona, Shaw, Cogeco Cable