Canadian vs. US Banks--Better PE and rising C$ Message Board

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Non-Tech : Canadian vs. US Banks--Better PE and rising C$

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To: janet who wrote (179)	1/26/1998 4:32:00 PM
From: Doug	Read Replies (1) of 230

All the major Cdn banks have seen a pop in their prices due to the proposed merger of RY & BMO. BNS's upcoming split may not drive its price further mainly because of BNS's 4% ASEAN exposure. Regarding BNS's partner that is speculative. The major Bank could be CM or some Foreign one if Banking Mergers are allowed. In any case, TD & BNS are the likely junior partners in any merger. CM on a valuation basis is attractive at these levels and should eventually rise. There has been a rumour regards its derivative exposure. All Banks have a good part of their income from derivatives. However, all of a sudden early last week , CM was singled out by the Short sellers as a target. They seem to have been squeezed in the recent run up. A basket of TD & CM bought on a down draft may prove the best from these levels. Good luck.

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