Investment dealer CEOs say markets are recovering

Despite another challenging year for Canada’s investment industry, dealer firm CEOs are, overall, optimistic about the outlook for 2014.

An Investment Industry Association of Canada (IIAC) survey finds 48% of respondents predict the state of capital markets will be more or less the same as last year, while 39% feel conditions will improve.

“The fact that half of industry CEOs see the state of capital markets as being more or less the same as last year signals stability,” says Ian Russell, IIAC president and CEO.

“Last year saw slow but steady growth,” he adds, “giving us reason to be optimistic that this year’s results will also confirm our survey findings.”

Forty-eight percent of investment dealer CEOs predict improved results for firm profitability, while 36% feel conditions will be more or less the same for their firms in 2014. Notably, 10% say there will be significant improvements—something that not one CEO anticipated last year.

The IIAC survey also finds the majority of CEOs see investors as more likely to participate in the market (63%), and reduce their holdings in cash and equivalents (also 63%).

“This is a strong indication that after years of sitting on the sidelines, Canadian investors see 2014 as the year to get back in the game,” says Russell.

Fewer investment firm CEOs have plans to acquire a firm or enter into a joint venture in 2014—only one-third as many as last year (10% versue 30%).

The news, however, is not all positive. According to Russell, many firms face a tough challenge just to survive. For some, he says, 2014 will determine whether their doors will be open next year.

“As was the case last year, the pre-eminent roadblock is the ongoing regulatory burden. When asked to list the top three barriers to growth facing their firms in 2014, 84% cite regulatory pressures, similar to last year’s percentage.”

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