Over the past 10 years, Bay Street’s best-rated stocks failed to beat the S&P/TSX composite index.Mark Blinch/The Globe and Mail
Good morning. Here are the best reads of the week. Have a great weekend.
After a long slumber, Canadian retail investors are back as a powerful force. So powerful, in fact, the online systems they trade through can't seem to handle the demand. This week, discount brokerages run by the country's largest financial institutions, including Royal Bank of Canada and Toronto-Dominion Bank, struggled to fix technical issues with their online investing portals – sites and apps retail investors use to buy and sell stocks. Story (Tim Kiladze and James Bradshaw, for subscribers)
Clients of Canada's largest online retail trading platforms have been frustrated by glitches that have stopped them from buying and selling securities over the past few days. Story (Christina Pellegrini and James Bradshaw, for subscribers)
Canada's biggest investors have a trillion-dollar problem. A stunning $1-trillion (U.S.) in capital – nearly double the amount available in 2012 – is sitting on the sidelines, waiting to be put to work by private equity investors across the globe. So many firms are chasing deals that it is creating the most competitive investment climate in more than a decade. Story (Jeffrey Jones and Jacqueline Nelson, for subscribers)
The latest twist in U.S. marijuana policy is reverberating north of the border, as public companies and securities regulators wrestle with the legal risks of operating in a country where the Trump administration appears to have just changed the game. Story (Christina Pellegrini, for subscribers)
Soulpepper's growth from a small Toronto theatre company into one of Canada's most successful artistic ventures was fuelled by the dynamism and passion of artistic director Albert Schultz, who resigned Thursday after allegations of sexual misconduct spanning several years. But its progress was also made possible by Mr. Schultz's remarkable knack for corralling support from some of the most influential names in Canadian business – sharp minds who could lend their connections, financial acumen and fundraising might to Mr. Schultz's vision for Soulpepper. As a result, the theatre company's board stands out for its firepower. Story (James Bradshaw, Christina Pellegrini and Tim Kiladze)
Some of the last megamergers announced in 2017 could offer a clue as to where deal activity will pile up this year. Story (Jacquline Nelson, for subscribers)
Apple Inc. has staked its first presence in Vancouver with the purchase of Buddybuild, a three-year-old startup that designs software tools for mobile app developers. Story (David Ebner, for subscribers)
Brookfield Asset Management Inc. is leading a $4.6-billion (U.S.) deal to purchase nuclear power giant Westinghouse Electric Co., which was forced into bankruptcy nearly a year ago owing to massive cost overruns at construction projects in the United States. Story (Alexandra Posadzki and Shawn McCarthy, for subscribers)
There was a lot more than profit at stake for Ontario Teachers' Pension Plan when it struck a deal to invest in mining giant Glencore PLC. In a sign of a shift in the way big institutional investors think about the way they deploy capital, the pension fund's investment committee's many discussions about the royalty and streaming arrangement, announced in early December, were loaded with questions about health, safety and environmental issues. Story (Jacqueline Nelson, for subscribers)
After years of "Will they or won't they?" talk, 2018 may finally be the year of consolidation among Canada's intermediate gold companies. Story (Niall McGee, for subscribers)
While 2017 saw a revival of initial public offerings in Canadian mining and metals, investment bankers aren't optimistic that IPO activity will be as brisk in 2018. Story (Niall McGee, for subscribers)
At first glance, Harinder Takhar's business seems boring, and he knows it. "Maybe we should have a slogan," he says, grinning: "Make bill payments interesting again." Story (James Bradshaw, for subscribers)
FRIDAY DEAL WRAP
BCE and Bell Canada formally closed their $182-million purchase of AlarmForce Industries on Friday, and immediately announced that the home monitoring company's western operations and client base will be sold to Telus Corp. Story
Aurora Cannabis Inc. has signed deals to acquire an initial minority stake in The Green Organic Dutchman Holdings Ltd. and to purchase up to 20 per cent of TGOD's annual cannabis production. Story
Alphabet's Google has joined an investment in Chinese live-stream mobile game platform Chushou that brings the startup's total funding to $120 million (U.S.), as the U.S. firm eyes new inroads to China where its search engine is blocked. VentureBeat
FRIDAY FINANCIAL SERVICES WRAP
Deutsche Bank will post its third-consecutive annual loss in its 2017 results, defying its chief executive's expectations of a swing to profit and highlighting the difficulty of overhauling Germany's largest lender. Story
Morgan Stanley said on Friday it would take a $1.25-billion (U.S.) hit in its fourth-quarter earnings due to a cut in corporate tax rate as part of the U.S. tax code overhaul. Story
IN CASE YOU MISSED IT
Michael Watson: The Globe and Mail's recent series on market fraud highlights the major problems facing enforcement agencies. There is no lack of will or ability on the part of those tasked with the job of protecting investors. Their lot is one of frustration about the limitations that prevent them from getting the job done. Opinion
WHAT WE'RE READING ELSEWHERE
Investors might want to ask themselves whether the research they're reading is truly a labour of love from the research department — or simply a series of ads for more powerful parts of the bank. Consider what happened to Trevor Murray, a senior strategist who spent less than a year covering the market for commercial mortgage-backed securities at UBS in New York. Financial Times
Once, it was normal for big European companies to give major shareholders a heads-up on any share sale in the hope of securing their support before a fundraising was even announced. This custom of wall-crossing large funds, or giving them material non-public information, was already in retreat before MiFID II came into place this week, but the new rule book strikes a fresh blow against the arrangement. Bloomberg