I am an accredited or eligible investor as defined in National Instrument 45-106.




Liis Palmer, Cassels Investment Management Inc.

Last week the Marquest Monthly Pay Fund (A units) closed at $5.43, up from $5.41 the previous week. The TSX was up 0.7 percent in the same period. The US Federal Reserve’s relatively dovish policy statements, highlighting that policy would remain loose for some time due to the benign outlook for inflation, drove markets higher. The Fed’s Open Market Committee comments outweighed concerns about energy prices and issues in Iraq as well as the CPI figures released last week which showed core inflation rose to 2.0 percent in May (from 1.8 percent in April), a 15 month high.

Leading contributors in the portfolio were Canexus (up 8.8 percent), Vermillion Energy (up 2.8 percent) and TD Bank (up 1.3 percent). Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Canexus’ five plants in Canada and one plant in Brazil are reliable, low-cost, strategically located facilities. Canexus’s stock was highlighted at National Bank for reaching a technical bottom and “showing the best technical action in two years.” CIBC produced a research piece on its breakup value.

Laggards in the portfolio were Sherritt International (down 3.5 percent), Bonavista Energy (down 2.1 percent) and Arc Resources (down 1.9 percent). Sherritt has nickel operations in Cuba and Madagascar as well as oil and gas in Cuba, Spain and Pakistan. BMO initiated coverage with an outperform rating citing the leverage to nickel and de-risking as the Madagascar project ramps up to full capacity as well as the improved balance sheet due to the sale of the coal operations. The Materials Sector was up 4.4 percent on the week but Sherritt did not participate in the sector’s strength.

The information above is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this paper are derived from proprietary and non-proprietary sources deemed by the author to be reliable. The information is not necessarily all-inclusive and is not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any way for errors and omissions is accepted by Marquest, its officers, employees or agents. This paper may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement contained herein. All forward-looking statements are subject to change and are provided in good faith but without legal responsibility. © 2014 Marquest Asset Management Inc. All rights reserved.

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