The struggling Canadian resource industry was dealt another blow with the announcement that Vancouver-based independent brokerage house Salman Partners would be closing its doors in 2016.
Founder Terry Salman, the company’s president and CEO, made the announcement in a short news release issued late Tuesday afternoon.
“It is with regret that Salman Partners Inc. announces that it intends to voluntarily resign from its membership with Investment Industry Regulatory Organization Of Canada (IIROC),” Salman said in the release. “Accordingly, we will cease carrying on operations as a registered investment dealer on February 15, 2016.
“Industry conditions have made it extremely difficult for independent dealers to remain profitable. In this environment, Salman Partners has made the decision to voluntarily resign from IIROC.”
Salman Partners is a research-driven brokerage that trained more than 50 analysts over its 22 years in business. During that time it helped raise more than $20 billion for over 400 issuers. Among its more high-profile analysts is senior mining analyst Raymond Goldie, a regular on BNN’s Market Call.
Reaction was quick on social media from resource industry players and Canadian investors.
“OMG that sucks about Salman. Best research of any firm. Terry (Salman) has been a great corporate citizen,” commented IDM Mining CEO Rob McLeod on CEO Chat.
“Another Canadian Broker down in a horrible small cap market,” trader @GregCameron16 posted on Twitter.
“Significant barometer of the Canadian Resource Market,” echoed @ekim, a small-cap investor.
Salman Partners wasn’t only a resource industry player – research spanned sectors including technology, alternative energy, oil and gas, and forest products – but that was its specialty.
The firm said it was making arrangements for an orderly transition of all client accounts to alternative registered dealers.
The news comes amid a commodities slump that has taken no prisoners, driving prices for everything from copper and coal to zinc and oil & gas to multi-year lows.
The junior resource industry has been hit the hardest. The S&P/TSX Venture Composite Index plunged through the 500 mark to hit an all-time low. The index is down about 30% this year and a staggering 85% from 2007 highs, which peaked over 3,300. The index rose above 2,400 in early 2011 before resuming its slide to current levels.
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