how many of you think that will happen?
http://finance.sympatico.ca/Home/Co...ne=False&subtitle=&detect=&abc=abc&date=False
"We believe the TSX still has room to post a meaningful rise from current levels, and have a 12-month target of 13,500," UBS strategist George Vasic wrote in the bank's latest Canadian economic outlook Wednesday.
Since troughing on March 9 at 7,566, the S&P-TSX Composite Index has gained some 55 per cent this year, touching 11,779 on Wednesday. After such a meteoric rebound, some have worried that the rise in equity values seems to have outpaced the nascent signs of growth in the actual economy.
But the fundamentals support further room for growth, Vasic said.
Even if earnings growth is flat in 2010, normal price to book value relationships would suggest the TSX should fairly be at about 12,750. (The book value of a company is the value of its assets on its balance sheets; it may or may not align with the actual market price at any given time.)
Of course, the bullish outlook is not without its risks. Fluctuations in the Canadian dollar could exacerbate returns in either direction.
Vasic also notes that Canadian stock prices are at the mercy of three forces. The developing world largely dictates demand for resources, the U.S. economy affects the export environment for the industrial and telecom sector, and the domestic economy drives the financial and consumer-based sectors.
The forecast depends on "the absence of any new financial tremors" in any of those areas to throw the recovery off kilter, Vasic says.
In 2010, "investors will need time to confirm that growth that has just turned positive can be sustained and not just be a result of the unprecedented levels of stimulus that have been injected into the system," Vasic said.
The bank singles out financial firms such as Royal Bank of Canada and Bank of Nova Scotia, materials firm Potash Corp., oil conglomerates Suncor Energy Inc. and Talisman Energy Inc., rail operator Canadian National, gold miner Barrick Gold and coffee chain Tim Hortons Inc. as its preferred stocks for the year.
http://finance.sympatico.ca/Home/Co...ne=False&subtitle=&detect=&abc=abc&date=False
"We believe the TSX still has room to post a meaningful rise from current levels, and have a 12-month target of 13,500," UBS strategist George Vasic wrote in the bank's latest Canadian economic outlook Wednesday.
Since troughing on March 9 at 7,566, the S&P-TSX Composite Index has gained some 55 per cent this year, touching 11,779 on Wednesday. After such a meteoric rebound, some have worried that the rise in equity values seems to have outpaced the nascent signs of growth in the actual economy.
But the fundamentals support further room for growth, Vasic said.
Even if earnings growth is flat in 2010, normal price to book value relationships would suggest the TSX should fairly be at about 12,750. (The book value of a company is the value of its assets on its balance sheets; it may or may not align with the actual market price at any given time.)
Of course, the bullish outlook is not without its risks. Fluctuations in the Canadian dollar could exacerbate returns in either direction.
Vasic also notes that Canadian stock prices are at the mercy of three forces. The developing world largely dictates demand for resources, the U.S. economy affects the export environment for the industrial and telecom sector, and the domestic economy drives the financial and consumer-based sectors.
The forecast depends on "the absence of any new financial tremors" in any of those areas to throw the recovery off kilter, Vasic says.
In 2010, "investors will need time to confirm that growth that has just turned positive can be sustained and not just be a result of the unprecedented levels of stimulus that have been injected into the system," Vasic said.
The bank singles out financial firms such as Royal Bank of Canada and Bank of Nova Scotia, materials firm Potash Corp., oil conglomerates Suncor Energy Inc. and Talisman Energy Inc., rail operator Canadian National, gold miner Barrick Gold and coffee chain Tim Hortons Inc. as its preferred stocks for the year.