Reflections on the week ending September 5, 2010

A little bit of positive news helped the markets record a positive week.  We believe that Wealth Managers are particularly good investments during a market recovery.  Their earnings are highly correlated with the markets and their trading multiples also expand as market sentiment switches from pessimistic to optimistic.  This past week offered a good example of this leverage as Invesco Limited’s share price appreciated over 8% while the S&P 500 appreciated approximately 4%.

• During the week, the following news items were of relevance to some of the companies we follow and in which we may have an economic interest:
   
• TD Bank reported its results for the 3rd quarter ended June 30, 2010.  For the quarter, adjusted diluted earnings per share were $1.43, compared with $1.47 in the prior year.  For the 9 months year to date, adjusted diluted earnings per share were $4.40, compared with $3.88 in the prior year.  The quarter reflected growth in retail earnings and a reduction in wholesale earnings to levels that management described as more normal.  We are pleased with the earnings stability and growth that TD is demonstrating.

• Financial Technologies (India) Limited, a leading provider of financial infrastructure (including exchanges) for emerging markets, is capitalizing on the growth of capital markets in these regions.  On August 31, 2010, they announced the commencement of operations of their newest exchange:

• “Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange, commenced operations on its cutting-edge electronic trading platform with the ringing of the opening bell by Mr. Ong Chong Tee, Deputy Managing Director of the Monetary Authority of Singapore (MAS)….SMX operates as an exchange regulated and licensed by the MAS. It offers multi-currency and multi-asset clearing, trading, and pricing for contracts with guaranteed settlement and delivery. The contracts are developed to meet both generic and specific hedging requirements over Asian trading hours. The SMX product range, together with the agility and accessibility of its systems, and strategic location in Singapore - a reputable financial centre - will enable the Exchange to be a sophisticated one-stop risk management channel for global liquidity to plug into Asian trade flows.”