Investors see value in Canada's TSX but smaller gains for 2020: Reuters poll

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Investors see value in Canada's TSX but smaller gains for 2020: Reuters poll
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Toronto's stock market will rise over the coming year, adding to large gain...

TORONTO - Toronto’s stock market will rise over the coming year, adding to large gains in 2019, as low interest rates support the global economy and investors take a liking to its cheaper valuation than Wall Street, a Reuters poll found.

“With interest rates roughly at all-time lows, with inflation non-existent ... I think we are still in a very good environment for stocks,” said Allan Small, a senior investment adviser at HollisWealth. “I don’t think we are going to see a recession in 2020.” The Toronto market trades at a multiple of less than 15 times annualized earnings, based on a preceding 12-month period, versus a price-earnings ratio of about 22 for the S&P 500, data from Refinitiv Eikon showed.

Many value stocks can be found in the financial, industrial and resource sectors of the Toronto market. When combined, these sectors account for about three-quarters of the TSX Composite’s market capitalization. But prospects for pot stocks could be improving as a result of the potential for Ontario, Canada’s largest province, to accelerate its roll-out of retail cannabis distribution and for the United States to take steps toward the weed’s federal legalization, said Robert McWhirter, a portfolio manager at Selective Asset Management Inc.

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