Two major investment firms are predicting Canadian markets will experience a moderate recovery this year.
In Outlook and Opportunities 2002, portfolio managers at Franklin Templeton Investments are estimating growth of about 10 per cent in the non-tech sector. And financial giant Merrill Lynch says while the economic recovery and low interest rates should support a more durable market performance, equity returns are likely to be capped in single-digit territory.
“The best way to describe the Canadian markets in 2002 will be success in moderation, don’t go for the home run, go for a combination of singles, doubles and triples,” said Fred Pynn, manager of Franklin Temple-ton’s Bissett Canadian Equity Fund. “Companies like Magna, CN or Quebecor World are some of the names we like.”
In its report 2002 – The Year Ahead, Merrill Lynch recommends focusing on sectors that tend to outperform in the late stages of a recession and early stages of economic recovery. These include ‘soft’ consumer-oriented areas such as retail, auto parts, building materials, cable/entertainment/media, hospitality, transports and printing and publishing.
Stocks highlighted include Biovail, Petro-Canada, TD Bank, JDS Uniphase, Loblaw, WestJet, Alliance Atlantis, Manitoba Tel, Inco, Ballard Power Systems, Agnico-Eagle, CGI Group, PanCanadian Energy, TransCanada Pipe-Lines, H&R REIT, Decoma International, Molson and Thomson Corp.
