David Chong's Investment Blog

Canada drawing foreign investors

Capitalizing on 'world's love affair' with country, Ottawa plans first euro-denominated bond issue in more than a decade

5 January 2010
Globe and Mail Update By Tavia Grant and Boyd Erman

Foreign investors are hungry for a piece of Canada.

A stable banking system, a recovering economy, an abundance of commodities and a fiscal policy deemed to be sound are enticing investors, and in turn boosting Ottawa's access to foreign financing and strengthening the dollar.

Playing into what Scotia Capital has labelled "the world's love affair with Canada," the Finance Department announced plans Tuesday for its first euro-denominated bond issue in more than a decade. The government is seeking at least €1-billion ($1.49-billion) from the 10-year bonds, and bankers said there is enough interest to sell twice that amount. Ottawa's move came as the dollar rose for the fourth consecutive day, closing at 96.25 cents (U.S.), its highest since mid-October.

"The world wants what Canada has: natural resources, stable currency and responsible fiscal policy," said Andy Busch, Chicago-based currency and public policy strategist for BMO's U.S. investment unit.

Revisiting the Albertan oilsands

  Alberta boast the second largest oil reserves in the world in the form of oilsands, more than 173 billion barrels of oil... behind only Saudi Arabia.  Canada is also the single largest foreign supplier of oil to the United States, accounting for 17 per cent of total U.S. oil imports. The oilsands produce about 1.3 million barrels of oil daily, and there are plans to double production in the near future.  The 2 largest cities in this oil rich province are Calgary and Edmonton.  After numerous oil sands projects were shelved or postponed in 2009, things seems to be pickup up very well heading into the new decade...