Canadian stocks down as government tightens housing rules

October 5, 2016

Canadian stock market opens low as government announced major housing regulations

Canada’s main stock market opened the week with a slight loss on Monday as the federal government announced major housing regulations.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite Index dropped 36.82 points, or 0.25 percent, to close at 14,689.04 points. Three of the 10 sub-sectors in the index moved into positive territory on the day.

Finance Minister Bill Morneau was in Toronto on Monday to announce new measures on the housing market in response to the surging prices in Vancouver and Toronto. Starting Oct. 17, a stress test that used to be used for mortgages with less than a 20 percent down payment will apply to all new mortgages, making it more difficult to receive one.

“I want to make sure that we’re proactive in assessing and addressing the factors that could lead to excess risk,” Morneau said to justify the new policies.

The Liberal government also announced the removal of a loophole that allowed non-residents to receive a tax exemption when selling a home.

During the trading day, the three most traded stocks were Aritzia Inc., Spectral Medical Inc. and DirectCash Payments Inc.

Fashion retailer Aritzia Inc. made its debut on the market with a 10.69 percent climb to close at 17.71 Canadian dollars (13.51 U.S. dollars) a share. The popular retail outlet has more than 75 stores across major shopping centers in North America.

Spectral Medical Inc. saw shares plummet 85.09 percent to 1.37 Canadian dollars (1.05 dollars) after the results of their late-stage test for life-threatening sepsis and septic shock did not meet their target.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]S[/dropcap]hares of automated banking machines (ABMs) provider DirectCash Payments Inc. spiked 47.39 percent to 18.91 Canadian dollars (14.41 dollars) after the announcement that Cardtronics, an American ATMs provider, would be acquiring the Calgary firm for 460 million dollars at a price of 19.00 Canadian dollars (14.49 dollars) per share.

The acquisition, which is expected to finalize in the first quarter of 2017, will allow Cardtronics to service 225,000 ABMs across North America, Europe and Asia-Pacific regions.

The Canadian dollar ticked up 0.009 to close the day at 0.7628 dollars, compared to Friday’s closing rate of 0.7619 dollars

Note:
1. Xinhua
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