MARQUEST WEEKLY COMMENTARY – MARCH 9, 2015
Liis Palmer, Cassels Investment Management Inc.
Monthly Pay Fund
Last week the TSX was down 1.9 percent. The Marquest Monthly Pay Fund A units closed at $4.51 compared to $4.61 the previous week. A strong US payrolls number made it more likely that the Fed would raise interest rates and caused the US$ to strengthen. Generally, commodity prices fell.
Significant contributors in the Fund last week were Ag Growth (up 5.1 percent), Enbridge (up 1.6 percent) and Canadian Natural Resources (up 3.1 percent). CNQ surprised with a strong Q4 (ahead of consensus) and a dividend raise. The company’s cost management and strong balance sheet has provided some protection against the weak oil price. The raised dividend seems to indicate that there are no plans for an equity issue.
Laggards were Bank of Nova Scotia (down 3.2 percent), Restaurant Brands (down 6.1 percent) and Algonquin Power (down 8.7 percent). Bank of Nova Scotia reported a light Q1 but they raised the dividend. Management was positive on the medium term outlook due to positive trends in the international business and foreign exchange. Algonquin Power announced that they would delay releasing their Q4 results until March 26th
Global Balanced Fund
Last week, the world markets were generally down except for Japan. The Marquest Global Balanced Fund A units closed at $18.60 compared with $18.74 the previous week. US non farms payrolls rose 295,000 in February, ahead of expectations, and unemployment fell to 5.5 percent. The US$ rose and the euro fell on continuing expectations of the ECB’s stimulus measures.
Last week in the global equities portion of the portfolio, leading contributors were Time Warner (up 2.5 percent), Comcast (up 1.5 percent) and Aetna (up 0.9 percent).
Laggards were AbbVie (down 8.2 percent), Whirlpool (down 4.2 percent) and Banco Santandar (down 4.3 percent).AbbVie fell on news that it had been the successful bidder for Pharamacyclicals, the developer of Ibrutinib. Ibrutinib may be a breakthrough treatment for forms of hard to treat leukemia. It could be a $6 billion drug. However, AbbVie’s $21 billion bid may be rich.