On the program Mind your business on QUB radio, Charles Emond spoke about some important issues.
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Was the Caisse ready to face this crisis from the start, and is there something that you are going to change in the way you invest in the future?
“It’s hard to prepare for a pandemic, I’ll admit, because we haven’t had one for a century. Nevertheless, were we well prepared? I would say that in terms of our financial strength, our liquidity, the organization had learned lessons from 2008. We have seen the importance of having liquidity in order to be able to take advantage of a crisis. What we did. I wish I could have enjoyed it more, honestly, because it was short at the same time; the central banks came to shut it down so quickly that it lasted a few weeks. We made -30% on the stock market in 30 days, but we recovered afterwards. ”
Is there one or more cards that you would have liked to have played better?
“For example, we look at technology stocks, which had a very strong upward reaction during these confinements. There is a digitalization of the economy, so it is to open up to new business models that shake up traditional business models. ”
You see when, the economic recovery in Quebec, what is your prognosis?
“When we look at our official projections, we expect to reopen and reach pre-COVID GDP levels, I would say roughly, say late 2021, early 2022, for Quebec and Canada. Quebec before Canada, a little earlier, because Canada still has the oil sector which, for its part, undermines its overall performance. Earlier than Quebec, I would say the third quarter for the United States because they still have a vaccination plan which is quite rapid. They have fiscal stimuli, a $ 1.9 trillion plan that is being launched by the Biden administration. That will still work in their favor. “
Could the Caisse be more transparent about the risk in certain private placements such as the McInnis cement plant?
“I think I’m pretty transparent when I talk to people about what we wanted to do. When you look at a company like McInnis, you know, you often look through the lens, the investments of the Caisse in Quebec are its best investments … There are certain exceptions, for McInnis, you have seen this year, we succeed at the end … I agree with you, we shouldn’t have ended up at the end of a cement plant. I have mentioned this several times.
Then the Caisse does not manage these companies, we are an investor, but when the company is no longer performing, well there, we get involved to find a solution. In the case of McInnis, it was a virtually unexpected solution, in the midst of COVID, we found the best operator for that [la firme brésilienne Votorantim]. Instead of having a single loss-making asset, we are now part of a joint venture that has a strategic operator who has been making money for 100 years in the cement factories. We are part of a joint venture which is now very profitable. ”
- Listen to Charles Émond’s full interview on the show Mind your own business on QUB radio: