November 2, 2006
The government announced plans to increase taxes on foreign investors who own the country’s income trusts. They were not impressed, and down went the loonie (up for the FX USD/CAD, that is) – the biggest one-day slide since June 16, and the lowest level in two weeks – making it the worst performer Wed. (Nov. 1/06.) among the 16 most actively traded currencies.
The reasoning here is this new tax measure will reduce portfolio inflows into the nation’s equity market. According to RBC Capital Markets Ltd. (part of Canada’s biggest bank), international investors hold 22% of the income trust funds, with a market capitalization of over C$200 billion.
Canada’s currency has been on the decline for the past two months, due in part to falling oil prices – one of the nation’s main exports.
Source: Bloomberg News
The government announced plans to increase taxes on foreign investors who own the country’s income trusts. They were not impressed, and down went the loonie (up for the FX USD/CAD, that is) – the biggest one-day slide since June 16, and the lowest level in two weeks – making it the worst performer Wed. (Nov. 1/06.) among the 16 most actively traded currencies.
The reasoning here is this new tax measure will reduce portfolio inflows into the nation’s equity market. According to RBC Capital Markets Ltd. (part of Canada’s biggest bank), international investors hold 22% of the income trust funds, with a market capitalization of over C$200 billion.
Canada’s currency has been on the decline for the past two months, due in part to falling oil prices – one of the nation’s main exports.
Source: Bloomberg News
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