May 24, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be sending the newsletter on her behalf.

Each year around this time you will see the Inner Harbor packed with sailboats coming in for the Swiftsure International Yacht Race. The Swiftsure International Yacht Race is the longest-running cross-border race on the West Coast, for sailboats of all types and sizes.  This year’s race will start at 8:50am on Saturday May 25^th, 2013 with 190 sailboats registered to race.  The best place for you to watch the race is at Clover Point and for all of you early birds, there will also be a pancake breakfast starting at 8, right before the race begins. It is truly an amazing event to watch, so be sure to check it out!  Below you will find the 3 different race courses for this year.

“Never bend your head. Always hold it high. Look the world straight in the eye.” – Helen Keller

Photos of the day – May 24^th, 2013

Buddhists carry candles while encircling a large Buddha statue during Vesak Day, an annual celebration of Buddha’s birth, enlightenment and death, at a temple in Nakhon Pathom province on the outskirts of Bangkok, Thailand. Chaiwat Subprasom/Reuters

An Indian child plays in water to cool off, at a water theme park, during a hot summer afternoon in Hyderabad, India. Mahesh Kumar A./AP

Market Closes for May 24^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

May 24 (Bloomberg) — Canadian stocks rose, erasing earlier losses of as much as 0.3 percent to clinch a fifth week of gains, as a surge in Valeant Pharmaceuticals International Inc. offset a slump in oil and gold producers.

Valeant jumped 13 percent to an 11-year high after a person familiar with negotiations said Canada’s largest drugmaker might pay $9 billion to buy Bausch & Lomb. Manitoba Telecom Services Inc. surged 5.7 percent after agreeing to sell its Allstream unit to a firm co-founded by Egyptian billionaire Naguib Sawiris. Encana Corp. fell 0.7 percent as oil capped its biggest weekly decline in more than a month. Banro Corp. and OceanaGold Corp. slid more than 3.9 percent as gold retreated.

The Standard & Poor’s/TSX Composite Index rose 9.13 points, or 0.1 percent, to 12,667.22 at 4 p.m. in Toronto. The benchmark equity gauge’s 0.4 percent gain in the past five days gave it the longest streak of weekly advances since February 2012.

“The S&P/TSX has been pretty quiet while other markets have been swinging a lot,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. The firm manages C$500 million ($484 million). “Commodities are falling. We’re seeing oil is down, as is gold. The U.S. economy has been doing pretty well, so it’s providing a bit of a floor to markets.”

Canadian equities traded as low as 0.3 percent as energy and raw-material shares retreated amid a slump in oil and gold prices. Seven of 10 industries in the S&P/TSX declined, as five stocks fell for every three that rose.

Valeant surged 13 percent to C$87, its highest close since January 2002, pacing an 8.7 percent increase among health-care stocks. Warburg Pincus LLC, which bought Bausch & Lomb in a 2007 leveraged buyout, as recently as March was considering an initial public offering, but is now near a deal to sell to Valeant, said a person who asked not to be identified because the negotiations are private.

Manitoba Telecom gained 5.7 percent to C$33.93 after selling its Allstream fiber network business to Accelero Capital Holdings for C$520 million. The company will use the cash to invest in new wireless spectrum and improve the speed of its existing networks, Manitoba Telecom said in a statement.

National Bank of Canada, the country’s sixth-largest lender, advanced 1.9 percent to C$77.02 after reporting record second-quarter adjusted profit and raising its dividend 4.8 percent.

Niko Resources Ltd. jumped 23 percent to C$7.35, for its biggest gain since 1996. Niko, along with partners Reliance Industries Ltd. and BP Plc, announced today they have discovered gas and condensate in a well off the east coast of India. Niko holds a 10 percent stake in the block where the discovery was made.

Banro slipped 3.9 percent to C$1 and OceanaGold sank 4.9 percent to C$1.76 as gold for June delivery retreated for the third time in four days.

Encana fell 0.7 percent to C$20.28 and Suncor Energy Inc. declined 1.1 percent to C$31.95 as the price of crude for July delivery retreated 10 cents to $94.15 a barrel. Oil slid 1.9 percent this week, the most since the seven days ended April 19.

US

By Will Hadfield and Lu Wang

May 24 (Bloomberg) — U.S. stocks recovered from early losses for a second day as investors weighed prospects of economic growth with concern the Federal Reserve will reduce stimulus efforts. Japanese shares rebounded from their largest drop since 2011, while commodities fell for a fourth day.

The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,649.6 at 4 p.m. in New York, paring a 0.8 percent loss, and the Dow Jones Industrial Average recovered from a 95- point loss to close up 8.6 points at 15,303.1. Japan’s Topix Index closed 0.5 percent higher after a 6.9 percent plunge yesterday. The euro was little changed at $1.2935 after gaining 0.5 percent earlier. Coffee, soybeans and cocoa lost more than1.5 percent to lead the S&P GSCI Index of commodities to a three-week low.

Bookings for U.S. durable goods increased 3.3 percent last month, pointing to gains in business activity that will help manufacturing rebound in the second half of the year. In Germany, the Ifo institute’s business-climate index increased for the first time in three months, exceeding forecasts. Bank of Japan Governor Haruhiko Kuroda said he has done enough to stimulate the economy and has no target for the nation’s stocks or currency.

“The markets got spooked at the thought the Fed might taper off QE sooner rather than later,” Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $2.6 billion, said in a phone interview. “Yet if you look at what the Fed said, that’d happen because the state of the world will be better.”

About 11 stocks retreated for every 10 that rose in the U.S. Volume of S&P 500 stocks was 23 percent below the 30-day average before markets close on May 27 for the Memorial Day holiday. The S&P 500 capped a weekly loss of 1.1 percent, its first in more than a month, and trimmed its 2013 gain to 15.7 percent.

Energy, telephone and utility companies led losses in eight of the 10 main industry groups in the S&P 500 today, while consumer-staples and financial shares advanced. Gap Inc. retreated 1.7 percent after the retailer forecast annual profit that fell short of analysts’ estimates.

Abercrombie & Fitch Co. slumped 8 percent after reducing its profit forecast for this financial year to a range of $3.15 to $3.25. It had predicted earnings per share of $3.35 to $3.45.

Sears Holdings Corp. plunged 14 percent, the most since November, as the department-store retailer posted a quarterly loss. “Our recent financial performance has not been acceptable,” Chief Executive Officer Edward Lampert said in a statement.

The Dow closed higher as Procter & Gamble Co. rose 4 percent to lead gains after the world’s largest consumer- products maker said it will replace Chief Executive Officer Bob McDonald with his predecessor, A.G. Lafley, as it struggles to rekindle growth.

Investors trying to explain the resilience of American equities during a global selloff may want to consider the pace that companies are repurchasing shares.

About 79 percent of buyback orders at Goldman Sachs Group Inc.’s corporate trading desk were active yesterday, the most this year, according to a note to clients obtained by Bloomberg News. Companies stepped up purchases as the S&P 500 fell as much as 3 percent from an intraday record reached May 22.

The buybacks may have limited losses in American equities after shares in Japan fell the most in two years and stock markets from London to Paris and Frankfurt saw declines of more than 2 percent. The S&P 500 closed yesterday down 0.3 percent after losing as much as 1.2 percent.

“The overall buy-the-dip mentality is very, very prevalent,” Jim Welsh, who helps oversee $6 billion at Forward Management LLC in San Francisco, said in a phone interview.

“When you have corporate buybacks, it’s kind of like a support underneath the market.”

The Stoxx 600 slipped for a second day following a 2.1 percent plunge yesterday, its worst in 10 months.

Raiffeisen Bank International AG dropped 2.1 percent after Herbert Stepic offered to resign as chief executive officer. The lender, the second-largest in eastern Europe, began an internal review of Stepic’s offshore accounts yesterday. Austria’s financial-markets regulator has requested information.

The yield on Italian 10-year debt rose 11 basis points to 4.14 percent, while Spanish rates jumped 13 basis points to 4.42 percent.

The yen strengthened against all 16 major peers after Kuroda’s remarks.

Japan’s currency has slumped 11 percent this year, for the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The BOJ said on April 4 that it would double the country’s monetary base by the end of 2014 in an attempt to end deflation. The euro has risen 2.7 percent this year, and the dollar has strengthened 5.1 percent.

Australia’s dollar fell 1.1 percent to 96.42 U.S. cents, heading for a third weekly drop. New Zealand’s currency slid 0.7 percent to 80.81 U.S. cents after a government report showed the nation’s trade surplus for April was smaller than economists had estimated.

The MSCI Emerging Markets Index swung between gains and losses. Lenovo Group Ltd. climbed 3.8 percent in Hong Kong after saying that its cash reserves of more than $3 billion enable it to pursue acquisitions to expand into new business areas.

Hungary’s benchmark BUX Index increased 1. percent, while Brazil’s Ibovespa was little changed.

Coffee tumbled to the lowest in more than three years, with Arabica futures for July losing 2.2 percent to $1.2725 a pound, as inventories climbed in Europe and the U.S., the world’s leading consumers, fueling concern that supplies will overwhelm demand. Soybeans fell the most in three weeks, losing 1.6 percent, as the highest prices this year prompted U.S. farmers to boost sales and processors offered smaller premiums for deliveries. Wheat futures also slid while corn rose.

Oil for July delivery decreased 10 cents to $94.15 a barrel on the New York Mercantile Exchange, the lowest settlement since May 2. Gold futures for June delivery fell 0.4 percent to settle at $1,386.60 an ounce.

Have a great weekend everyone!

Be magnificent!

“Don’t believe what your eyes are telling you. All they show is limitation. Look with your understanding, find out what you already know, and you’ll see the way to fly.” – Richard Bach

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838