Perceptions of investments in Canadian-based companies are evolving as U.S. institutional investors look to Canada for unique and undiscovered opportunities, according to a new survey released by Golin/Harris International. But, says Golin/Harris International, the U.S. financial community continues to favor trading the U.S. listings of Canadian-based companies and has weak views of the management of Canadian-based companies versus U.S. companies when it comes to creating shareholder value and transparency.

During the second and third quarters of 2002, Golin/Harris conducted a survey by email and telephone of U.S. institutional investors and U.S. sell-side analysts at major brokerage houses about their views of Canadian equities and the investment opportunities in Canadian-based companies. Respondents were drawn from a broad cross-section of U.S. institutions and analysts following a variety of sectors.

“Canadian companies that are listed on the U.S. exchanges currently have a significant advantage with U.S. analysts and investors, but with enhanced education to reduce concerns over volatility, liquidity, and the regulatory environment, investments can be increased on the Canadian exchanges such as the TSX,” says Allan Jordan, senior VP at Golin/Harris in New York.

Nearly 90% of American buy-side investors responding to the Golin/Harris survey on U.S. investor attitudes about investment in Canadian-based companies say that they have invested in publicly traded Canadian-based companies.

In comparing the Toronto Stock Exchange to the New York Stock Exchange, Toronto is seen as disadvantaged. “Unfortunately, some long-time perceptions of Canadian business opportunities continue to prevail with investors,” says Richard Binhammer, Golin/Harris senior VP in New York. “The results of the survey show that the management of Canadian-based companies is not earning the respect of U.S. analysts and investors and needs to take steps to enhance executive visibility with the American financial community.”

Respondents to the Golin/Harris survey scored the management of Canadian-based companies less than equal to U.S. based companies. Canadian management fared best from a financial standpoint and in adherence to best practices for corporate governance, while it ranked weakest on matters of transparency and communications/investor relations. Buy-side institutions especially ranked Canadian companies poorly on transparency and shareholder value creation.