72035
The Q2 annualized growth was 4.5%.
The Q2 annualized growth was 4.5%.

Canada Growth Attracting Investors

Canada Growth Attracting Investors

The Canadian economy seems to be attracting investors’ attention of late because of the dazzling growth prospects it has to offer. The economy finally seems to have left behind the effects of the 2008-09 recession and the 2015 oil price collapse.
Better-than-expected growth in GDP indicates self-sustainability of the Canadian economy. Also, increase in consumer spending, expansion in the job market, rise in exports and trading volumes reflect growth of the economy, Nasdaq reported.
Moreover, all the major banks delivered better-than-expected results in the last earnings season.  “We expect the Canadian banking sector as a whole to further benefit from the improved economic conditions,” Zacks Equity Research said in its latest report.
The Bank of Canada’s overnight surprise—raising its lending rate to 1%—comes as a bonus. This rate hike is expected to boost the banks’ revenues. The rate move will gradually ease the pressure on net interest margin for the big Canadian banks.
This sudden rate hike follows the recent release of the economic data that marked the second-quarter annualized growth of 4.5% for Canada, which came above 3.3% expected by the central bank. By bringing rates back to the early 2015 level, before the central bank had announced two rate cuts to deal with the aftermath of the collapse in oil prices, the Canadian economy is running hot and offers a horde of growth prospects.
Also, with the elections approaching soon, further rate hikes may be underway in the near future, promising more support to the banking sector, the report said.
The Canadian banks fall under the Zacks Foreign Banks Industry. This 70-company industry carries a Zacks Industry Rank of #22, which places it at the top 9% of 250 plus Zacks industries. “Our back-testing shows that the top 50% of the Zacks ranked industries outperform the bottom 50% by a factor of more than two to one.”
The report says: “In order to save investors the time-taking process of identifying the Canadian banks that might benefit the most, we have created a three-faceted screen using the Zacks Stock Screener to shortlist such companies.
“At first, we looked for Canadian banks that have projected annualized earnings per share growth (for the next three to five years) of more than 5%.
“Next, we considered banks that have market capitalization of more than $40 billion, as they are safer to invest in.
“Finally, we have picked stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).”

Short URL : https://goo.gl/1iH1vp
  1. https://goo.gl/6AHZBX
  • https://goo.gl/ZN6NZp
  • https://goo.gl/NBWAky
  • https://goo.gl/QFYL2j
  • https://goo.gl/TC38r7

You can also read ...

Close to 40% of digital transformation initiatives will be supported by AI capabilities.
The digital economy in Asia-Pacific, or APAC, is expected to...
An electronic stock indicator of a securities firm in Tokyo.
As investors come to terms with the impending end of easy...
Most economists would agree that Italy needs faster economic growth if it is to resolve its public debt  and banking-sector problems in an orderly manner.
Italy’s economy is growing again, but it’s still the worst...
Maersk is expanding its competitive universe to include different types of companies.
The world’s largest container company will start looking for...
Lloyds Profits Miss Forecasts
Lloyds Banking Group PLC raised its 2017 dividend by 20% and...
NZ Says Pacific Trade Deal Will Boost GDP
New Zealand estimates a Pacific trade deal would boost its...
CBs May Top Inflation Targets
Not only will central banks meet their inflation targets, they...
Pak Current Account Gap Widens
Pakistan’s current account deficit widened 28.74% on a month-...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus