The Globe and Mail reports in its Thursday, June 29, edition that Scotiabank says Canadian telecom stocks should no longer have an underweight position in portfolios thanks to their more attractive valuations. The Globe's Darcy Keith writes in the Eye On Equities column that telecom stocks have significantly underperformed the broader market since the beginning of the year. While Scotiabank says a major buying opportunity has yet to arrive, the sector is not expensive either, and an analysis of past interest rate cycles points to a favourable valuation backdrop. Scotiabank says telecom stocks now deserve a market weight position. Scotiabank analyst Maher Yaghi says in a note: "We have argued for the past six months for an underweight position in the sector due to increasing bond rates, competitive intensity, and regulatory risk. Not being permabears, we think it is always good to check whether current prices are taking future expectations into consideration. ... Our analysis indicates that we have essentially moved from an overvalued to a fair value situation." Mr. Yaghi says investors should do well with Telus, which he rates "sector outperform." He targets the shares at $29.50.