Further to my 3 blogs opposing the proposed merger between the TSX and the LSE, I received a release today from TD Waterhouse where I am a subscriber. I quote it as it points out the irony of the prospective that the TSX might disappear if a merger occurs.
“Commodities put Canada in the driver’s seat SHIRLEY WON
The Canadian stock market is in a sweet spot with exuberance about gold, oil and agriculture stocks poised to push its benchmark index to record highs, says the author of a new book on the Toronto Stock Exchange.
The S&P/TSX composite index will more than double from its current level and hit 30,000 points in 10 years as demand for commodities continues to grow, predicted Bob Haber, who spent 12 years as chief investment officer at Fidelity Investments Canada before launching Haber Trilix Advisors LP of Boston last year.
“It is going to become more obvious to the world that Canada is a special place that has those commodities,” said the author of Go Canada: The Coming Boom in the Toronto Stock Market and How to Profit from it.”
Well, here we have prophecies of prosperity and an expected world class showing of the TSX, while at the same time we have shareholders of the TSX trying to abandon Canada for a quick profit.
How London Looks at the Merger
Managing public opinion is an interesting subject. I am often amused at what marketing and PR people are able to paint.
In Canada, the press and speeches by the respective parties all talk about a “Merger”.
Have a look at the London press and commentary. They all paint the prospective deal as a “TakeOver” by the LSE of the TSX.
Unfortunately, we colonials often accept the propaganda fed to us. If you want to know what is really going on, read the UK press, or watch BBC – a very different picture from what we colonials see and hear.
Who Would Control the LSE/TSX
Ontario expressed misgivings twice last week, including when Government Minister Mr. Duncan called the Toronto stock exchange a “strategic asset” and said he doesn’t want this crown jewel owned by the Middle East. The ruler of Dubai would own the proposed venture’s largest single stake but would not have a controlling interest.
Are you aware that the ruler of Dubai would be the largest shareholder in the TSX? Somehow I still have this naive belief that the largest shareholder calls the shots, and I doubt that even in this new world, people invest their money and ignore what their investment does. The ruler of Dubai would be calling the shots, regardless of the PR image doublespeak.
I suggest our government pause and reflect on what a Middle East Sheikdom would do if someone from Canada took over their stock exchange. RIOTS IN THE STREETS perhaps. Bombing of embassies perhaps.
We in Canada, are meekly accepting when our treasures disappear. Is this really what capitalism is?
The Debate Over What Happens if Foreigners are Prevented from Buying Canadian Assets.
There is this oft-repeated warning that if somehow, Canada stopped letting non-Canadians take over our significant assets, that all of a sudden Canada would be regarded as a pariah, a place that no-one wants to do business with, a place where investment is not welcomed, and accordingly the argument goes that Canadians should never reject foreign investment.
What a load of crap
I have no idea what smart PR person first came up with this nonsense, but it seems to have taken hold. In order to put this nonsensical assertion in perspective, imagine that you had the choice of investing in any country in the world.
Perhaps you would choose the USA which is the bastion of free markets. A reasonable choice, but compare what you have to go through in order to invest there as compared to Canada, and compare their perchance for lawsuits compared to Canada. Canada looks good doesn’t it?
Perhaps you would invest in some third world country, with the chances of changes of government, or bribery, or third class facilities, water, transportation, real estate and property law. Canada looks pretty good doesn’t it?
Perhaps some non-democratic country, where the government has the freedom to change laws if they deem what you are doing less beneficial to the country. Canada looks pretty good doesn’t it?
And so on.
The point is, Canada has been, and Canada will be, a wonderful place to invest. A modern country, with established freedoms and rights unparalleled elsewhere, the unchallenged property rights, courts with the power to keep politicians in check, social care for its citizens and care for its immigrants, modern transportation, modern communications, a plethora of natural resources, and so on.
Where else in the world can you find this? Nowhere! Canada is the place to be.
Every citizen of every country knows that countries protect their assets. That is what governments are supposed to do. That is what is expected, or should I say expected by everyone except Canadians.
Prime Minister Stephen Harper & The Conservative Party
Surprisingly, the current party in power, is the only Canadian government in many decades to actually deny an attempted foreign takeover. They actually blocked two of them recently.
In spite of all the fear mongering by the Liberal Party and their repeated attempts to paint the Conservatives as caring only for the rich, the Liberals made no effort to block foreign takeovers.
