|Bid||73.13 x 800|
|Ask||73.16 x 800|
|Day's range||73.00 - 74.52|
|52-week range||46.45 - 87.62|
|Beta (5Y monthly)||1.04|
|PE ratio (TTM)||8.34|
|Forward dividend & yield||4.37 (5.78%)|
|Ex-dividend date||25 Sep 2020|
|1y target est||98.31|
(Bloomberg) -- The Bank of Canada reinforced its commitment to keeping interest rates at historical lows over the next few years to support an economic recovery that’s being hampered by a second wave of Covid-19 cases.In a policy statement Wednesday, officials led by Governor Tiff Macklem held the central bank’s overnight rate at 0.25%, which they believe is the lowest it can go without disrupting the financial system, and said they will likely keep it there until 2023. They also pledged to continue buying government bonds to suppress longer-term borrowing costs and retain current levels of stimulus, even as they made technical adjustments to the pace of asset purchases.In all, it represents a continuation of unprecedented measures that have helped Canada emerge more quickly than expected from the worst of the economic crisis, with Macklem showing little inclination to pare back efforts.“Our main message today is that it will take quite some time for the economy to fully recover from the Covid-19 pandemic,” Macklem said in opening remarks at a press conference in Ottawa. “The Bank of Canada will keep providing monetary stimulus to support the economy through the recovery.”The country’s economy won’t fully absorb slack before 2023, keeping inflation below the 2% target over that time, the central bank said in new quarterly forecasts released separately. It reiterated its commitment to keeping the overnight rate at near zero until the slack is absorbed and inflation is sustainably at target.While maintenance of its rate guidance was expected, the adjustments to the quantitative easing program came as a surprise, and the central bank went out of its way to reassure markets the overall impact on stimulus won’t change.It pledged to scale back purchases of government bonds to a minimum C$4 billion ($3 billion) a week, down from C$5 billion, and to shift purchases to longer-term securities, typically a more stimulative form of quantitative easing. It also recommitted to purchasing bonds until the recovery is “well underway.”The adjustment will help address concerns the central bank’s asset purchase program was too large for the country’s outstanding bond market. The central bank already owns just over a third of Canada’s federal government debt, and Macklem has been under pressure to devise a way to temper reliance on asset purchases without tightening policy.“This will leave the Bank being less heavy handed in the Government of Canada debt market,” Royce Mendes, an economist at CIBC World Markets, said in a report to investors.Canada’s currency extended declines after the statement, depreciating 1% to C$1.3319 against its U.S. counterpart at 1:12 p.m. Yields on government two-year bonds were little changed at 0.24%, while those on 10-year bond dropped 2 basis points to 0.58%.Macklem characterized the changes as a natural evolution as the central bank shifts its policy goals away from stabilizing financial markets and more toward providing stimulus.“Shifting our purchases to longer-maturity bonds increases the amount of monetary stimulus provided per dollar purchased,” Macklem said. “That’s because it focuses more directly on the borrowing rates that are most relevant for households and businesses.”In its Monetary Policy report Wednesday, the Bank of Canada said household and corporate borrowing tend to be most closely linked to bond yields in the three to 15 year range, though Macklem said the central bank could also buy 30-year bonds under the program.The central bank estimated the economy will contract 5.7% this year, before rebounding 4.2% next year, and warned it could slow sharply at the end of this year after authorities across the country implement new restrictions on businesses amid a surge in coronavirus cases.(Updates with analyst comment in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
CIBC Innovation Banking is pleased to announce a US$52 million growth capital financing with Exeter-based Vapotherm, Inc. (NYSE: VAPO), ("Vapotherm"), a global medical technology company focused on the development and commercialization of its proprietary high velocity therapy, which is used to treat patients of all ages suffering from respiratory distress. Vapotherm will use the funding to repay its existing revolving loan facility and term loan facility.
CIBC Innovation Banking is pleased to announce a growth capital financing for Apptegy Inc. ("Apptegy"), a leading omni-channel communication platform designed to help schools connect with students and parents. Headquartered in Little Rock, Arkansas, the additional capital will be used to support the firm’s strategic initiatives and growth into new regions.