Falling Oil Prices – Canadians Feeling the Effects
By: Frehiwote Negash
The fall in oil prices in the last eight months has begun to wreak havoc on the economy and Canadians are starting to feel the effects. The Albertan government announced that 31 000 jobs could be lost by the end of the year should oil prices remain stagnant. Energy companies like Suncor have cut their capital budgets and laid off workers with unemployment at 5.4{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}; up from 4.7{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} last year. While Alberta still expects to avoid a deficit this year, revenues will take a massive hit with investments in the oil fields dropping by about 30{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year reducing the number of on-going projects and halting exploration. The collapse in energy sector will wipe out an estimated $23 billion in profits for corporations and reduce government coffers in the next two years. The fear is that the drop in oil prices could spur a recession in Alberta; a belief that Premier Jim Prentice disagrees with yet it’s still too early to assess the damage. The Albertan economy will slow dramatically over the course of the next year but that does not necessarily mean that its will contract every quarter. Whether we care to admit it, Canada’s energy sector represents a significant portion of our economy and its performance impacts every Canadian.
In the immediate short term, the fall in oil prices translates into more money in consumer pocketbooks as it is estimated that the average Canadian will save $1000 this year at the gas pumps. In the long-term, the oil collapse translates into lower incomes for Canadians overall thus increasing the debt-to-income ratio and with the inconsistent performance of the labour market in recent months, can lead to economic instability; a situation the Bank of Canada wants to minimize if not entirely avoid. The Bank of Canada’s recent rate cut in January with the Canadian dollar falling was explained by Bank Governor Stephen Poloz as an opportunity for the central bank to assess the impact of the energy sector on the Canadian economy. Their position is that even with the oil shock hitting Alberta hard in the coming year, there is room for the Canadian economy to grow. Poloz argues that the lower Canadian dollar, the recovery of the American economy and the central bank’s monetary policy of late will be key factors in helping to boost the economy. The next time the Bank of Canada will announce the lending rate will be March 4 along with the release of the Monetary Policy Report issued at every quarter which hopefully will provide a clearer outlook on the state of the economy.
Source: Globe and Mail, Toronto Star, Financial Post
- Published in Blog, Business, Oil and Gas
DealNet Capital Interview at DecisionPlus
Interview with Robert J. Cariglia CEO of DealNet Capital (CSE:DLS)
https://www.youtube.com/watch?v=hvPoEzJ-2V0
DealNet Capital is a new type of funding company. They service the home and retail sectors in the US and Canadian markets providing end-to-end financing plus innovative technology and communication solutions.
Since 1987, Decision-Plus has introduced new investors to the world of stock market trading while also helping experienced traders make the best trading decisions.
- Published in Blog
Buying American: What that means for Canadian Investors
By: Frehiwote Negash –
The U.S Federal Reserve meets eight times a year to discuss the state of the American market and create policy for the economy. The minutes from the latest Federal Reserve meeting were received as dovish from analysts as the Federal Reserve maintained the same position they had in January; no interest rate hikes yet. Wednesday’s Fed minutes revealed that policymakers were concerned about raising interest rates too soon believing that it may shock U.S. economic recovery – A sentiment that was echoed in last month’s meeting.
While the American economy is continuing to grow and showing signs of recovery, the Fed minutes showed that an interest rate hike would be pushed back to at least the second half of this year. Policymakers voted last month not to raise interest rates reflecting hesitation about the hike in the future. The main concern voiced about the hike was when and how they should proceed with it. As little was said about tightening anytime soon, economic data will probably drive their timing. As interest rates and inflation are positively correlated, the minutes also showed concern about the core level of inflation. In addition to how the Fed would proceed with normalization, Fed watchers had been looking at the January meeting to see if the Fed would change its language from December’s minutes regarding terminology suggestive of halting the increase. Nonetheless, market reaction to the minutes was fairly muted. Investors got what they were expecting as the Fed stated it would remain patient and data-dependent. Though many analysts believed the minutes were dovish, the central bank began holding a special policy planning session to discuss the timing of interest rate increases. As for the American economy, many feel that before proceeding with new policy, they need to see further improvements in labor market with continuous growth.
Oil prices have significantly reduced the broad-based investments of Canadians. As oil is one of Canada’s major exports, the more than 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} percent reduction in its price has hurt the portfolios of Canadians who have exposure to energy not to mention government coffers. It is for that reason that many investors are fleeing the Canadian market. Foreigners have begun to dump Canadian securities as the Canadian economy continues to be bogged down with low oil prices and a lower Canadian dollar. Surprisingly, Canadian investments in foreign securities have hit a 14-year high. Canada’s international transactions of securities posted a net outflow C$27.43 billion from the economy making it the largest such outflow in more than seven years. This acquisition by Canadian investors in December focused mostly on the U.S. market with record purchases of U.S Treasury Bonds. The reduced attractiveness of domestic securities is attributed to a stronger U.S outlook coupled with the low oil prices. For many Canadians, buying American is the way to go.
Source: WSJ.com, CNBC.com, CTVNews.ca
- Published in Blog
The Introduction of 311
By: Frehiwote Negash –
The introduction of 3-1-1 into municipal government has been a godsend for city workers and the public at large in facilitating communication between the city and its citizens. By dialling 3-1-1, locals can access services and vocalize concerns while allowing City Hall to effectively respond to inquiries and complaints. The city of Baltimore was the first to adopt the 3-1-1 service in 1996. Today, municipalities all over North America have integrated the service and have made it available on a number of platforms to facilitate access. 3-1-1 gives citizens’ access to a whole range of non-emergency city services such as snow and garbage removal to reporting broken streetlights. As technology continuously evolves and people adapt to new forms of communication, cities must also find ways to better communicate with locals.
In collaboration with DealNet Capital Corp (CNSX.DLS), the city of Windsor, have added a texting option to their 3-1-1 platform; the first of its kind in Canada. The short code 3-1-1 enables citizens to access services or lodge complaints via text during weekdays from 8:30-4:30 excluding holidays. As citizens are increasingly more reliant on cell phones, the texting option offers a much more convenient way to interact. While citizens can still access 311 services via phone, email or online, by offering the services on various platforms, city mangers will be better equipped to respond much more effectively to the public and relay information. Windsor Mayor Drew Dilkens has stated that he wants to start tracking info on city department responses in order to place the onus on city councillors to respond promptly and effectively. This type of initiative not only provides feedback to the City Hall on its performance but it forces city councillors to be accountable to its constituents.
Source: blog.civiccommons.org, Windsor Star
- Published in Blog
Proximity Marketing: The future of Advertising
By: Frehiwote Negash
Technology is rapidly changing in a world that is heavily reliant on it. As a result, retailers have to find unique methods of advertising to reach the consumer. In a day and age where companies are looking for innovative ways to bring customers through the doors, a new technology might do the trick in driving up sales and help build consumer loyalty. The introduction of Proximity Marketing has allowed for retailers to hone in on the desires of consumers and place ads that are tailored, directed and targeted to cater to their individual tastes. Therefore, ads will be target to the consumer based on specific interests as well as their proximity to a retailer that can best fulfill those needs. Not only does it allows for potential customers to build a relationship with the retailer but can enable two way communication and helps foster loyalty to the retailer. Companies like Impact Mobile have decided to enter what could end up being a very lucrative market as they see the value in enabling and strengthening the relationship between the consumer and the retailer. More importantly, the true value of the technology is measured in the conversation rate from the placement of the ad to when the consumer heads to the cash register.
Proximity marketing uses cellphone technology to send ads to smartphone users who are in close to a business using the technology. While the ad is limited to those in the proximity of the business, the message is user-friendly and reaches consumers that are most likely to buy. Users can opt-in to receive ads from specific retailers and avoid being inundated with ads from retailers that do not suit their tastes.
Although variants of this type of technology have been around for about decade, many are hesitant about it as its success hinges on two keys factors: retailer interest and consumer acceptance. Investors should be excited about its potential as 53{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of consumers polled in a JiWire study said that they were willing to share their current location to receive more relevant advertising and 57{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of consumers are more likely to engage with location-based advertising. 63{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of respondents said coupons are the most valuable form of mobile marketing. These numbers illustrate the value of this type of targeted marketing. With respected companies like Apple, Macy’s and Coca-Cola utilizing this tool to bolster their brands and maximize profits, we can say that proximity marketing is here to stay.
The potential for this technology is not just limited to retailers but can extended to restaurants, sports events, hotels and even casinos as smartphones are increasingly becoming efficient tools for eCommerce.
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Sources: Forbes.com
- Published in Blog
Gold: Bull or Bear Market?
By: Frehiwote Negash –
It’s been a long time since we saw gold prices rise steadily. The last time the market witnessed at major jump in the price was in 2008-2009, a very difficult time for a vast number of Americans. To put in context, in September 2008, Lehman Brothers had just declared bankruptcy, the American housing market collapsed. Homeowners, thanks to sub-prime mortgages owed more to the banks than what their homes were worth. Major corporations such as General Motors, AIG, and Chrysler all lined up for bailouts from the American taxpayer while simultaneously firing millions of workers. There was an ongoing presidential race to replace the inept George W. Bush. Bush not only woefully mismanaged the American economy but sent the country into record debt. In what was the worst financial crisis since the Great Depression in the late twenties and early thirties, gold soared to new heights. Historically speaking, when there is a bear market in stocks, it tends to be quite bullish for gold.
Looking at the market, between 2002 and 2011, gold was consistently on the rise with double-digit gains on an annual basis. Yet, what goes up must come down eventually. The last three years have seen gold dropping off from its peak of $1900/gram in 2011. The question investors must ask themselves is if they are operating in a bear or bull market for gold. More importantly, investors have to consider the state of the American economy.
At the beginning of 2015, gold has steadily risen which leads many to suggest that the bull phase has begun for gold based on certain factors. Some of the factors that affect the price of gold are a weak American dollar, inflation, and low interest rates not to mention supply and demand economics. An increase in gold prices typically signals that the U.S. economy is struggling. There is also a correlation between oil prices and gold in where when one commodity suffers the other soars.
From 1931 and 1971, the dollar was backed by gold making it a valuable currency for foreign countries to own. Since President Nixon took the US dollar off the gold standard in 1971, the price of gold has been determined relative to its production and supply and demand forces. To this day, the US dollar remains the world reserve currency of choice but the collapse of the oil market in late 2014 might help explain the recent rise in gold prices. When investors feel wary about the state of the American economy, the rule of thumb is to invest in gold to safeguard from inflation and potential economic crises like in 2008. The general market sentiment is the low cost of a barrel of Texas oil will eventually damage the economy. It’s hard to determine with the recent recovery of the American economy and the oil price surge this week what is really the case. The slow but steady recovery of the American economy might prove to be sustainable in the long run and lead to a healthy economy.
Source: Midas Letter, Gold Resource, Forbes.com, CNBC, Business News Network
- Published in Blog
Rare Earth Metals – A Golden Opportunity
By Frehiwote Negash –
China announced that it will be scrapping its quota system for the purchase of Rare-earth metals. The change in policy comes after the country lost a World Trade Organization ruling in which China failed to justify the existence of the quota system. In lieu of the quota system, Beijing will instead implement a resources tax. The move will be viewed as a positive one as this will open up the market for other players and reduce the worry of scarcity. When China imposed these restrictions in 2009, the intial goal was to develop its own rare-earth metal industry while attempting to corner the market. This hasn’t stopped others from trying to access these rare earth metals as countries like the U.S, Canada and the European Union tried to gain access to these metals and took China to court. For a country that exports and manufcactures on the scale that China does, they felt it was important for them to capture a sizable amount of that market. Consider that by 2010, China produced 97{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of the world’s basic rare earth oxide production as welll as much of the processing business despite only having a third of the world’s deposits.
Rare earths metals are chemical elements found in the Earth’s crust that are essential to many modern technologies and affect every facet of daily life. Consider that we use these rare metals for oil refineries, airplanes, cellphones, medical CAT scans, wind turbines and hybrid cars and you have a clearer picture of how far reaching its properties are and why they are so valuable. The importance of these metals cannot be understated as these rare-earth enabled technologies stimulate economic growth, improve our standards of living, and help save lives.
With China and developing countries like India and Brazil on the rise, new emerging markets will require the use of the rare metal technologies. These are countries with emerging middle classes with purchasing power they have never possessed before. As long as the middle class keeps growing along with the country’s infrastructure, so too will consumerism. A good example that illustrates this point is the recent announcement by Apple Inc. Keep in mind that Apple products are seen as indicators of wealth considering its cultural significance and social currency.
Apple announced it had the most profitable quarter in “human history”. Hyperbolic statements aside, the key part of the story was that for the first time, iPhone sales in China have been greater than its total sales in the developed world. This fact indicates the growing market or these types of devices and technologies in the developing world. For potential investors that are considering getting involved in Rare Metal technologies, this might be the time to invest as there are new markets that await the these technologies.
Source: Mining.com, Investor Intel, BeyondBrics
- Published in Blog
InMed Expands Pipeline with Initiation of Program Targeting Epidermolysis bullosa simplex (EBS)
Vancouver, BC — February 3, 2015- InMed Pharmaceuticals Inc. (“InMed”) (CSE: IN; OTCQB: IMLFF), a biopharmaceutical company specializing in the research and development of novel, cannabinoid-based therapies combined with innovative drug delivery systems, announced today that it has added a new therapy to its pipeline: INM-750, for the treatment of epidermolysis bullosa simplex (EBS), a rare genetically inherited skin disorder. INM-750 is designed to suppress pathological skin growth, differentiation and inflammation that are signature characteristics of EBS.
InMed anticipates commencing pre-clinical studies of INM-750 in February, 2015 with initial data expected by Q2 2015. The initiation of INM-750 signals InMed’s entry into the dermatological market and adds to the Company’s rapidly advancing pipeline of cannabis-based therapeutics, which includes CTI-805 for glaucoma and CT-091 for arthritis, both of which are expected to enter human clinical studies in 2015.
“We are pleased to continue the strategic diversification of our pipeline by adding a third therapy identified by our proprietary platform technology,” said Craig Schneider, President & CEO of InMed. “The discovery of INM-750 furthers our corporate strategy of developing therapies for diseases that may be approved for Orphan drug designation.”
Sazzad Hossain, Ph.D., M.Sc., Chief Scientific Officer of InMed, stated, “EBS is a rare keratin mutation-related disease with no FDA approved treatment. The only options available to patients are wound care, pain management, and preventative bandaging. More severe forms of the disease lead to scarring, disfigurement, disability, and early death, usually before the age of 30.”
Craig Schneider concluded, “We are working rapidly to advance the development of INM-750 to address this significant unmet medical need.”
About Epidermolysis bullosa simplex (EBS)
Epidermolysis bullosa simplex (EBS) is Epidermolysis bullosa simplex (EBS) is one of the major forms of Epidermolysis bullosa a group of genetic conditions that cause the skin to be very fragile and to blister easily. It is a result of a defect in anchoring between the epidermis and dermis, resulting in friction and skin fragility. Its severity ranges from mild to lethal. As of today there is no cure or effective treatment. Currently, wound care, pain management and preventative bandaging are the only options available for treatment. The more severe forms of the disease lead to scarring, disfigurement, disability and early death, usually before the age of 30.
About InMed
InMed is a clinical stage biopharmaceutical company that specializes in developing novel therapies through the research and development into the extensive pharmacology of cannabinoids coupled with innovative drug delivery systems. InMed’s proprietary platform technology, product pipeline and accelerated development pathway are the fundamental value drivers of the company. For more information, visit www.inmedpharma.com.
- Published in Blog, Life Sciences