In a rare show of unity, the six bank-owned investment dealers are teaming to open the fixed-income world for clients with an electronic bond trading network.
The system will be called CanDeal, and the promise here is to replace a traditional process that sees clients call up the dealers to negotiate trades over the phone -- how dreadfully Old Economy -- with a screen that displays all the best prices from every dealer on all varieties of federal government debt.
Jayson Horner, president of CanDeal, said: "The current process of best-price discovery can take a minimum of three to five phone calls and up to several minutes. With CanDeal, clients will be able to complete a deal in seconds and be assured they received the best price possible from the investment dealer of their choice."
CanDeal hopes to roll out the trading of Government of Canada bonds and money market debt this fall, with provincial and corporate debt to come next year.
The six Canadian shops backing CanDeal are BMO Nesbitt Burns, CIBC World Markets, National Bank Financial, RBC Dominion Securities, Scotia Capital and TD Securities. They will own the system in partnership with two technology providers. CanDeal will use a platform developed by Basis100 and MoneyLine Network, which will provide data and marketing support.
Electronic networks have already opened up the previously opaque world of Canadian bond trading. Any investor with a computer who wants to know the price of federal bonds trading among Canadian dealers can click on a system called CanPX.ca. The Web site, run by MoneyLine, is being upgraded to include provincial and corporate debt offerings.
"This is a great development for the Canadian capital markets," said Ian Russell, senior vice-president of the Investment Dealers Association. "Rather than having to shop at a lot of stores, investors will be able to go to an electronic supermarket for bonds, look at what each dealer has on the shelves, then point and click their way down the aisle."
For those who worry about the poor bond traders who might be put out of work by these developments, it's worth noting that inside the brokerage houses, sales and trading teams are trying to spend more time on sophisticated, value added strategies, and free themselves from commodity-type activities such as quoting a price on a plain vanilla 10-year bond.
Mr. Russell observed that the U.S. bond market has embraced systems similar to CanDeal, with a pioneering venture called TradeWeb now accounting for 15 per cent of U.S. Treasury traffic. Roots count You can't say Canada's biggest money managers forget their roots.
Recently, financier Ned Goodman of Dundee Bancorp fame has helped to expand the graduate business program at alma mater Concordia University. AGF Management chief executive officer Blake Goldring beats the drum tirelessly for French business school INSEAD, currently heading its global alumni fundraising efforts.
Now McMaster University engineering alumnus Michael Lee-Chin -- class of '74 -- is digging deep.
The founder of mutual fund manager AIC Ltd. gave $5-million this week to the Hamilton school to support a new research position that will study investment and portfolio management.
Don't expect academics at what's being called the AIC Institute to find creative justifications for buying tech stocks at 1,000 times earnings. The focus will be on the fundamental analysis practised by gurus such as Graham, Dodd and Buffett, the timeless skills needed to sort exceptional business managers from the pedestrian and the poor.
The AIC gift will mean two more professors on staff at the Michael G. DeGroot School of Business -- Canadian business schools have been bleeding academics to U.S. rivals of late -- and $500,000 in scholarships.
The money also will help to finance a new wing.
A recent Forbes magazine list pegged Mr. Lee-Chin's worth at $1.5-billion, which put him in rare air among the 500 wealthiest people on the planet.
McMaster's ties to the Street have served it well of late. CIBC World Markets kicked in $1.5-million to establish a working equity trading floor at the business school, an effort backed by executives Wayne Fox and Brian Shaw. And RBC Dominion chairman Tony Fell has twisted arms as vice-chairman of the university's fundraising drive. More Canaccord depth Canaccord Capital continues to add depth to its equity operations.
In Toronto, the employee-owned investment dealer rolled out the welcome mat yesterday for agency trader David Connacher, formerly with Credit Suisse First Boston, Yorkton Securities and Griffiths McBurney & Partners. awillis@globeandmail.ca
Andrew Willis