On Thursday, the S&P 500 ended the day up 0.3% while Toronto was down 0.3%.
After the close, Canadian Western Bank announced a common share issue at $24.50 which sold out very uickly. This will increase the share count by about 7.2%. I have written before that banks operate with high leverage (low common equity). I think it is prudent of CWB to issue common equity and strengthen its balance sheet at this time when it is facing higher loan losses. It is unfortunate that they did not issue equity when the share price was closer to $40. But it is prudent for any bank to issue equity at the FIRST sign of larger loan losses to insure that such losses will not threaten the company. There is every indication that CWB will continue to be profitable and that its loan losses will be manageable. But the share issue provides added insurance. CWB references growth as a reason for the share issue but they also note that their common equity ratio will be increased.
Canadian Interest rates are once again plumbing new lows. This is negative for rate reset preferred shares but, all else equal, is positive for stock prices.