Opportunities for CA bank stocks
The stock prices of top 5 canadian tops are recently falling following their earning events, which is a great opportunities to buy the dips.
Lots of good news are in the air, including rate cuts and mass immigration. The cut of temporary foreign workers will not work since it makes exceptions for food industry, construction industry and health care industry. Immigration agencies will find every loophole in these three industries for the mass immigration to work. Meanwhile, ten times amount of asylum seekers are pouring into Canada, which adds backlog and makes the processing time for asylum seekers essentially indefinite. Waiting for the asylum seeking application to be processed, these asylum seekers are able to stay in Canada indefinitely. The population growth will continue to feed the Canadian banking industry.
Another good news worth attention is that the Canadian government is buying Canada Mortgage Bonds in large quantities (link). This essentially transfers the risks beared by the banks to the government. Because when homebuyers default on the mortgages, the loss is beared by the Canada Mortgage Bond holders, which now is the Canadian goverment. Certainly, the Canadian goverment issues goverment bond to fund purchases of Canada Mortgage Bond, which is essentially the mortgage-backed securities. Therefore, the risk is not actually there.
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