REGINA – All indications are it is a good time to invest in agriculture and agricultural business, say investment dealers.
And that bodes well for Saskatchewan Wheat Pool’s public share offering.
“I think it’s a damn good time to invest in agriculture,” said a senior investment advisor at Nesbitt Burns Inc. in Calgary. “It’s going to be a win-win year.”
A good indicator of a strong agriculture business sector is the price of potash. Potash Corp. of Saskat-
chewan shares closed March 1 at $103.50.
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“Potash is at record highs,” said Dennis Mulvihill of RBC Dominion Securities in Regina. “That is a recognition of the positiveness of the agriculture cycle.”
Mulvihill said favorable world trade conditions will help investment in agriculture.
“The signals to the marketplace are that the subsidy problems, not only nationally but worldwide, are being taken away,” he said.
Mulvihill also said low grain stocks and high prices are key factors.
Market rebounded
Saskatchewan Pool president Leroy Larsen said the pool’s decision to wait a year in going to the stock market was a good one.
“The market was very soft at this time last year and it was about this time that we made the decision not to go forward,” he said. “It’s a complete reversal at this time in what has happened.
“New public offerings are going very well and the investment community are looking for places to put their money.”
Mulvihill, who represents the lead investment broker in a syndicate formed to market Sask Pool shares, said the pool’s strong core, combined with its diversified companies, give it an edge over other public agricultural businesses.
“There are not any good comparables (in Canada),” he said.
United Grain Growers has a strong core grain business but is not highly diversified. Maple Leaf Foods, on the other hand, has no core business.
Mulvihill said there has been a lot of interest shown in pool shares already, including some from members who didn’t participate earlier.
Sask Pool received the final receipt for its prospectus earlier this week, allowing investment dealers to offer approximately $150 million in Class B, non-voting shares to the public during the next month.
Shares are available exclusively to Saskatchewan residents until March 13. They are available to all investors after that date.
The pool’s board of directors plans to discuss a reorganization resolution in late March, leading to a listing on the Toronto Stock Exchange March 29.
