Goldman Sachs Doubles Weighting for Canada in Global Portfolio
Goldman Sachs Doubles Weighting for Canada in Global Portfolio
Toronto, July 26 (Bloomberg) -- Goldman, Sachs & Co. raised Canadian
stocks to ''neutral'' from ''underweight'' in its Global Portfolio on expectations
that improving global economies will push commodity prices higher.
Neil Williams, head of Goldman's London-based global strategy team,
doubled the recommended amount of Canadian stocks in its global portfolio
to 2 percent, according to Goldman's latest portfolio strategy report.
Commodity-related companies, which make up 21 percent of the Toronto
Stock Exchange 300 Composite Index, tumbled last year as slowing global
economies sapped demand for Canada's raw materials. Commodity prices
climbed 3.9 percent since they hit a 24-year low in February, as measured by
the Bridge-Commodity Research Bureau index, which tracks prices of 17
commodities. Natural resources make up as much as 35 percent of Canadian
exports. ''The global macro environment has become noticeably more
favorable for commodities,'' Williams said in the report. ''A sustained
improvement from the depressed levels which have plagued the resource
industry in recent years is essential to generate the rise in Canadian
operation profits incorporated in our forecasts.''
Goldman expects earnings from operations to grow 13 percent this year.
Goldman's target for the TSE 300 is unchanged at 7200 by the end of the
year and 7500 in 12 months. Today, the index fell 64.26, or 0.9 percent, to
7005.20, its seventh straight loss.
The portfolio mix for Canada remains 55 percent equities, 35 percent bonds
and 10 percent cash.
Goldman's favorite stocks are resource producers Donohue Inc., Talisman
Energy, Encal Energy Ltd., Suncor Energy Inc. and Cominco Ltd. as well as
ATI Technologies Inc., Bombardier Inc., Rogers Communications Inc., Le
Groupe Videotron Ltee and Clearnet Communications Inc.
Goldman Sachs also raised its global exposure to commodities to ''neutral''
from ''underweight'' and trimmed its cash holdings. The recommended
investment in Japan, the world's second- largest economy, was increased to
''overweight'' from ''neutral.''
Paper and forest companies, oil and gas producers and metals and minerals
shares have recorded the best performance on the TSE 300 this year. While
the metals group gained 23 percent, oil and gas shares jumped 33 percent
and paper and forest stocks soared 45 percent. The TSE 300 rose 8.2
percent during the same period. |
