Investors are pouring more money than ever into Canada, drawn by earnings growth that almost equals China’s and shares trading for 18 percent less. International funds pumped in $2.7 billion over the last year as analysts forecast companies in the Standard & Poor’s/TSX Composite Index will boost profits 42 percent and pay the best dividends relative to global equities on record. The market value of Canadian stocks has risen the most among the world’s 15 biggest nations this year in U.S. dollar terms. Prices gained 2.8 percent and the Canadian currency strengthened 3.6 percent, according to data compiled by Bloomberg.
Canada is becoming investors’ favorite because its banks avoided bailouts and the budget deficit is less than half that of the U.S., compared with their economies. The benchmark index may beat global equities for a fourth year as the recovery lifts demand for energy and metals providers, which make up 46 percent of the market. The S&P/TSX’s price-earnings ratio was 18 percent below China’s CSI 300 Index before today, Bloomberg data show. (more)
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