Loony Tax Fries Canadian Bacon – Stocks Crushed, Ay?
November 1st, 2006 by Stephen RomanCanadian stocks were crushed across the board after the Finance Minister proposed a massive tax increases for trusts. The fall was fast and ruthless with some market commentators speculating there may be a decline of 15% or more. The Loony (not Finance Minister Jim Flaherty, but the Canadian currency) tumbled more that 1% and will likely fall further. The timing seemingly can’t be worse as oil prices, one of the main drivers of the economy, have declined.
These are the biggest decliners on the NYSE with the Canadian stocks circled in red:
An analyst makes clear how destructive the tax may be:
“We would point out to the minister that a potential 10% correction in the capitalization of the trust market equates to an approximate C$25 billion destruction of wealth,” said BMO’s Tait. “A C$25 billion hammer to fix a C$500 million to C$800 million problem does not look like a very equitable solution.
Posted: November 1st, 2006 under Americas, Currency, Equities, General.
Comments: none
Make your Money Go Further
Our monthly reports tell you what countries and currencies offer the best deals. Travel and buy smart!