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Investors see value in Toronto’s commodity-linked stock market and expect it to rebound in 2019 as the global economy continues to grow and on hopes for the price of Canadian heavy crude to recover, a Reuters poll shows.

The median forecast of 28 portfolio managers and strategists polled was for a more than 9-per-cent increase in the S&P/TSX composite index from its Monday close to 16,425 by the end of 2019. The TSE dipped 0.3 per cent to 14,967 on Tuesday.

Of 10 investors who answered a separate question on the index’s valuation, six said it was cheap and four said it was fairly valued. None said it was expensive.

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“We view the equity market in Canada to be attractively valued not only against its own history but also relative to the S&P 500 Index,” said Philip Petursson, chief investment strategist at Manulife Investments.

The price-earnings ratio, a measure of valuation, for the TSX is 14.2, according to Refinitiv Eikon data, much less than the 18.6 price multiple for the S&P 500.

Toronto’s index has declined 9.5 per cent since it notched a record high of 16,586.46 in July as a slump in oil prices, rising global trade tensions and higher bond yields offset a boost to sentiment from a deal to revamp the North American Free Trade Agreement. Since the start of the year, the index is down more than 7 percent.

Investors expect economic growth to remain strong enough for companies to continue to increase profits even if some expect earnings growth to be slower.

“We are staying quite positive for the coming quarters,” said Mathieu D’Anjou, a senior economist at Desjardins Securities. “Profit levels are high and we are expecting a generally positive economic context next year and a rebound in Canadian and international oil prices.”

The price of oil has slumped more than 30 percent since October while a large discount for Canadian heavy crude has added to the headwinds for Canada’s energy sector.

Western Canadian Select (WCS) traded last month as much as $52.50 per barrel below West Texas Intermediate light oil, the biggest differential in data going back to 2010, according to Shorcan Energy Brokers. The discount has since narrowed to about $37.

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“If energy differentials can narrow we could see another move higher in the energy group,” said Greg Taylor, a portfolio manager at Purpose Investments. “Energy stocks look attractive at these levels as the companies continue to improve their operations in the low price environment.”

The energy sector has fallen 22 per cent since the start of the year, while financials, which account for about one-third of the weight of the TSX, have declined 7 per cent. U.S. crude was up 0.7 per cent to $52.03 on Tuesday.

Competition for deposits among Canada’s biggest banks is heating up for the first time since the global financial crisis, leading to higher funding costs that could crimp profit growth in their domestic businesses over the next two years, analysts said.

The Bank of Canada has been raising interest rates to help cool the domestic economy, which has been operating near capacity. But auto production, one of the country’s biggest industries, could be hurt after General Motors Co said on Monday it would close its plant in Oshawa, Ontario, east of Toronto.

Still, Canada’s housing market has not had the hard landing some investors have feared and the federal government announced measures last week that could help make businesses more competitive at a time when the United States is aggressively cutting taxes.

Ottawa will reduce the average overall tax rate in Canada on new business investment to 13.8 per cent from 17.0 per cent, the lowest level in the Group of Seven large industrialized nations.

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