Condor,
Hmmm. You want details?
<You are allowed to change your mind on this Canada as a despicable investment frontier and I won't even badger you or draw attention to your post.>
First of all Minmetals is an SOE not an independent company as we would consider it in the West. They value Noranda differently because of their access to cheap cash and monopoly status in China. Think about it.
I think capitalism, even broken capitalism, involves companies that are transparent and competitive, if corrupt. As a state owned monopoly with a large and dominant market share and access to cheap gov't cash MinMetals fails that test.
In addition, I never said Canada was a bad investment. I just said I didn't want to back up the truck. Of my equities, 85% are in Canada, but I have not deployed more cash to Canada. By the way, the revaluation of the Loonie presents as much problem to Canadian industry as high oil to the US. Between mills in BC, hotels at Whistler and manufacturers in Ontario there are cutbacks, shutdowns, layoffs. What is good for the commodities and oil patch is not necessarily good for the economy.
Finally, Canada has a trade and tax treaty with the US. Now I'm not saying the US is a saint-they aren't-but the Canadian Finance Ministry is going out of its way to try to shaft foreign investors in Canadian Royalty Trusts. When a trust's foreign-owned value exceeds 49% the shares can be forced to be liquidated.
The Canadian gov't withholds too much tax all the time, over and above the tax treaty, on distributions. Guess what, a married filer can only get a $600 refund and a single filer $300, per year. Moreover, they tax Return of Capital (that's right, they tax me when they return my own money to me). Some people investing in Canada say the Canadian gov't are thiefs.
So go ahead, 'badger me and draw attention to my post'.
Was that a threat or a promise?
David |
