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Interest rate volatility and challenges in the television sector are expected to put pressure on Canada’s telecom stocks in 2017, according to an annual outlook report from Desjardins Capital Markets analysts.

Since telecom stocks have a strong inverse relationship with interest rates, president-elect Donald Trump’s nod to inflationary policies could hurt telecoms that have enjoyed a low interest rate environment for years, Desjardins analyst Maher Yaghi and associate Jerome Dubreuil forecast for next year.

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The U.S. Federal Reserve is forecasting three rate hikes next year, but global central banks are generally expected to keep rates low, indicating that telecoms will still attract dividend-seeking investors, they wrote. The analysts expect revenue and EBITDA growth of 2.6 per cent and 3.4 per cent respectively.

“We believe the industry’s steady and predictable growth continues to be highly prized by investors looking to hedge the more volatile parts of their portfolio,” the report stated.