The Toronto Stock Exchange will likely limp through the summer, as it usually does, according to a report from UBS Securities Canada Inc.

The report notes that average gain on the TSX from the end of May to the end of October for the last 50 years is more or less zero. “But is this year likely to be different since rates are low and look to be relatively stable?” it asks. “The short answer is probably not.

“Historically, the wild card has been interest rates, and so we looked at low vs. high rates, and rising vs. stable vs. falling rates,” UBS reports. “The overall message was basically the same — small gains — though markets actually did worst when short rates moved by 50 basis points or less (suffering an average decline of 3.9%, although the median was just -0.9%), which is the likely scenario for 2007.”

That said, summers since the mid-1990s have been better, UBS notes, up eight of 11 times, with a median gain of 6.2%. However, it notes that the three down years were all sharp drops (down between 15% and 18%).

“Finally, given the seasonal gain since October was only marginally stronger than normal, and a wall of cash for takeovers remains, we are inclined to suggest investors look for a neutral, or somewhat better, summer overall,” it concludes.