September 30, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.  Storm season has arrived in Victoria! The last few days here have had high winds and heavy downpours! I thought I would share this poem called “Rainfall” as it is fitting to the type of day we are experiencing!

Rainfall

From out the west, where darkling storm-clouds float,

The ‘waking wind pipes soft its rising note’.

From out the west, o’erhung with fringes grey,

The wind preludes with sighs its roundelay,

Then blowing, singing, piping, laughing loud,

It scurries on before the grey storm-cloud;

Across the hollow and along the hill

It whips and whirls among the maples, till

With boughs upbent, and green of leaves blown wide,

The silver shines upon their underside.

A gusty freshening of humid air,

With showers laden, and with fragrance rare;

And now a little sprinkle, with a dash

Of great cool drops that fall with sudden splash;

Then over field and hollow, grass and grain,

The loud, crisp whiteness of the nearing rain.

Unknown

Today in History:

1947 – The World Series was televised for the first time. The sponsors only paid $65,000 for the entire series between the Brooklyn Dodgers and the New York Yankees.

1954 – The U.S. Navy commissioned the Nautilus submarine at Groton, CT. It was the first atomic-powered vessel. The submarine had been launched on January 21, 1954.

1982 – “Cheers” began an 11-year run on NBC-TV.

1984 – Mike Witt became only the 11th pitcher to throw a perfect game in major league baseball.

1994 – The space shuttle Endeavor took off on an 11-day mission. Part of the mission was to use a radar instrument to map remote areas of the Earth.

“Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference” – Robert Frost

Photos of the Day:

Russian sailing ship ‘Mir’ participates in a parade for the Mediterranean Tall Ships regatta in Toulon, France. About 37 tall ships have gathered for the competition which ended with a parade in the bay of Toulon. Jean-Paul Pelissier/Reuters

Flamingos stand in a lagoon near Messolongi, in western Greece. The lagoon is part of protected wetlands, that also includes marshes and ponds. The migratory flamingoes use the lagoon and salt evaporation ponds of Messolongi during the summer months before moving further south for the winter. Dimitri Messinis/AP

Market Closes for September 30^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam and Lu Wang

Canadian stocks fell, paring the biggest quarterly gain in a year, as a likely U.S. government shutdown weighed on global equities, overshadowing data showing a pickup in growth in the world’s 11th-largest economy.

Pacific Rubiales Energy Corp. fell 5.6 percent after agreeing to buy Petrominerales Ltd. for C$935 million ($912 million). Brookfield Office Properties Inc. jumped 14 percent after Brookfield Property Partners LP offered to buy the shares it doesn’t already own in the office landlord.

The Standard & Poor’s/TSX Composite Index declined 56.89 points, or 0.4 percent, to 12,787.19 at 4 p.m. in Toronto. The benchmark gauge for Canadian equities jumped 5.4 percent this quarter, its best performance since September 2012, and is up 2.8 percent in 2013. Trading volume was 10 percent above the 30- day average.

“No one expects the largest economy in the world to have a gridlock when it comes to the parliament and it’s unfortunate that it’s a very fractious environment,” Irwin Michael, portfolio manager with ABC Funds in Toronto, said in a phone interview. His firm manages C$800 million. “If there is no extended shutdown in the U.S. government, we expect the North American economy to start to become a little more positive in direction.”

The deadlocked U.S. Congress headed into the final hours before the first partial government shutdown in 17 years without any signs of averting widespread furloughs of government workers. The U.S. is Canada’s largest trading partner.

All 24 of the world’s developed stock markets retreated today, with the benchmark U.S. equity gauge sliding 0.6 percent.

A shutdown of the government would reduce fourth-quarter economic growth in the U.S. by as much as 1.4 percentage points depending on its length, economists at Moody’s Analytics Inc. estimated last week.

In Canada, gross domestic product grew 0.6 percent to an annualized C$1.58 trillion, the biggest gain since July 2011, as the economy recovered from a construction strike in Quebec and flooding in Alberta, Statistics Canada said today in Ottawa.

Consumer sentiment climbed to the highest in more than two years as employment rose and the housing market remained buoyant, according to the new Bloomberg Nanos Canadian Confidence Index.

All 10 main industries in the S&P/TSX fell. Health-care stocks slid 1.2 percent for the worst performance as Catamaran Corp. dropped 3.4 percent to C$47.32, its lowest close in 2013.

Pacific Rubiales slipped 5.6 percent to C$20.34. The company agreed to buy Petrominerales as the world’s fastest- growing major crude producer seeks to reduce transport costs.

Petrominerales shareholders will receive C$11 a share and one share in a newly formed exploration and production company, Pacific Rubiales said it will also take on C$640 million in debt, including convertible bonds.

Shares of Petrominerales surged 51 percent to C$11.70.

Brookfield Office paced the gains, surging 14 percent to C$19.74, a five-year high. Brookfield Property, which currently owns 51 percent of Brookfield Office, said it’s planning a tender offer of the landlord’s shares for stock or cash at a value of $19.34 each. The acquisition will create a combined entity with 330 million square feet (31 million square meters) of office, retail and industrial space on four continents, the company said.

SNC-Lavalin Group Inc. rose 2.4 percent to C$42.35.

Canada’s biggest engineering and construction company said it hired Morgan Stanley and Royal Bank of Canada to help sell an equity stake in its AltaLink power-transmission unit.

US

By Emma O’Brien and Nikolaj Gammeltoft

U.S. index futures rose, contracts on Asian equity gauges were mixed and crude oil held declines as investors awaited a potential shutdown of America’s government.

Global stocks fell the most in a month yesterday, paring the biggest quarterly jump since the start of 2012.

Standard & Poor’s 500 Index futures added 0.2 percent by 7:18 a.m. in Tokyo, after the measure lost 0.6 percent in the U.S. Contracts on Australia’s S&P/ASX 200 Index rose 0.1 percent, while Nikkei 225 Stock Average futures traded at 14,535 in Chicago after closing at 14,460 in Japan. The MSCI All Country World Index sank 0.8 percent yesterday. The Bloomberg U.S. Dollar Index lost 0.1 percent in New York and West Texas Intermediate oil held near an almost three-month low.

Hours before a midnight deadline to keep the U.S. government open, President Barack Obama urged lawmakers to pass a funding bill not tied to his health-care legislation for the sake of the economy. China may say manufacturing growth rose a third month today, after a smaller-than-expected increase in a private gauge cast doubt on the strength of the economic rebound. Japan issues data on manufacturing and employment, while Australia will probably keep key interest rates on hold.

“We are at the mercy of whatever develops in Washington,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “An attempt to prevent a shutdown is not totally unexpected, but some agreement will be better than none.”

Republicans and Democrats remained at odds over whether to tie any changes to the 2010 Affordable Care Act to a short-term extension of government funding as the shutdown deadline approached. The Senate voted 54-46 yesterday to reject the House of Representative’s latest plan, in a party-line move that puts the pressure back on House Republicans.

Senate Republicans floated the idea to extend by one week the funding deadline to avert a shutdown. Senate Majority Leader Harry Reid said no. Democrats urged House Speaker John Boehner to allow a vote on a spending bill without conditions.

Even if the budget fight is resolved, lawmakers would immediately move to the next fiscal dispute over raising the $16.7 trillion debt ceiling. MSCI’s All-Country Index rose 7.4 percent last quarter, the most since the first three months of 2012.

Closing the government would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, according to economists from Moody’s Analytics Inc. to Economic Outlook Group LLC. Obama said failing to fund government operations would “throw a wrench into the gears of the economy,” in comments from the White House.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York declined 0.6 percent to the lowest close since Sept. 12. Markets in Hong Kong are shut today, while trading in mainland China is closed until Oct. 8 for the National Day holiday break.

China’s official manufacturing purchasing managers’ index may deliver a reading of 51.6 for September, up from 51 in August, according to the median estimate in a Bloomberg survey of 30 economists. Fifty is the threshold between expansion and contraction. HSBC Holdings Plc and Markit Economics’ PMI rose to 50.2, from 50.1 in August, below a preliminary estimate of 51.2, according to data released yesterday.

Premier Li Keqiang said in a speech yesterday that the world’s second-largest economy can meet its main targets for this year. The economy is “stabilizing in a good trend” Li said, as cited by China National Radio in an address before the holidays. The economy probably grew 7.7 percent in the third quarter, according to the median forecast in a Bloomberg survey last month, up from an estimate of 7.5 percent in August.

Have a wonderful evening everyone.

Be magnificent!

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails.  Explore, Dream, Discover” – Mark Twain

As ever,

Karen Parnham

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: 778-430-5828