globeand mailGlobe says rising loonie may hurt Manulife, rivals
2003-05-21 08:13 ET - In the News
Also In the News (C-SLF) Sun Life Financial Services of Canada Inc
Also In the News (C-CL) Canada Life Financial Corp
The Globe and Mail reports in its Wednesday edition that Manulife Financial, Sun Life Financial Services of Canada and Canada Life Financial could see their profits sink by as much as 9 per cent in 2004 if the dollar remains at its current level, says CIBC World Markets analyst Mario Mendonca. The Globe's Sinclair Stewart writes that Mr. Mendonca says earnings could deteriorate further if the Canadian dollar continues to advance against foreign currencies, especially the United States dollar. Although buoyant equity markets have pretty much negated the dollar's effect in the second quarter, Mr. Mendonca says the earnings outlook for the latter half of 2003 also appears "ambitious." His report suggests Manulife's 2004 profit could be reduced by 9 per cent, and Sun Life and Canada Life by 8 per cent if the Canadian dollar maintains its current position throughout next year. Mr. Mendonca says domestic insurers will be at a "distinct disadvantage" to their U.S. counterparts in terms of earnings growth over the next year or until the Canadian dollar eases. Mr. Mendonca says the one factor that may be able to offset the earnings impact is a strong showing by equity markets.