Nice…Church & Dwight joining S&P 500 Index

Shares of Church & Dwight (CHD) jumped 1.4% yesterday on news that it was going to be joining the prestigious S&P 500 Index after Intel’s acquisition of chip maker Altera Corp. closes, which is expected to be after the close of trading on December 28th. The celebratory mood continued today with CHD jumping a further 1.7%!

This inclusion should see higher demand for the Company’s shares in the near term as managers of index products, and both retail and other institutional investors react to the announcement.

The Management and staff of CHD must be commended on such a great achievement…I believe this is just one of many more good things to come from the Company.

The Week That Was

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Investors digested the Fed’s decision to raise rates by dipping back into the market and allowing several indices to recover some ground lost last week. Four of the seven indices shown above are posting negative returns on a YTD basis, with Japan’s Nikkei 225 occupying 2015’s top spot thus far with a strong gain of about 8.4%. The rout in commodities has not been kind to Canada’s S&P/TSX composite, handing it  the dubious distinction of being this year’s worst performer to date (-10.92%).

Wasn’t Expecting This: CIBC offloads American Century stake

Canada’s CIBC today announced it was selling its stake in wealth manager American Century Investments to Japan’s Nomura Holdings for about USD$1B after acquiring the 41% stake for about USD$848M from financial behemoth JPMorgan Chase in 2011. The bank indicated the reason for the sale was the unlikelihood of it acquiring majority control of the wealth manager…I guess Nomura is content with a minority stake or believes the status quo could possibly change. CIBC is expecting a gain of about USD$170M net of taxes from the sale.

Thankfully, the sale does not appear to signal a shift in strategy away from expanding the Bank’s private banking and wealth management presence, but does mean there will be some drag on earnings going forward until cash from this disposal is deployed (redeployment may take a while since demand for wealth management businesses had led to increased prices).