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| Market News: News Archive : Morning News Call Week ending |
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Aug 11, 2009
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TUESDAY, AUGUST 11, 2009 CANADIAN EDITION
TOP STORIES
• Cascades Q2 profit beats market
• Centerra drops on sale talk, but Cameco denies
• Crocotta Energy posts loss in Q2
• Rio says seen no evidence for China detentions
• OPEC sees demand for its oil falling further
BEFORE THE BELL
Toronto's main stock index may open higher on firmer commodity prices. On the macro front, investors will be looking at the housing starts data, which is expected to rise to 145,000 in July from 140,700 in June, according to a Reuters poll. Wall Street is set to open lower as investors turn cautious ahead of key economic data with the Federal Reserve kicking off its two-day monetary policy meeting. European shares turned negative, with banks reversing earlier gains. Asian stocks struggled to eke out gains as policymakers warned of lingering economic uncertainty and data showed China's recovery may be moderating. Oil prices crept up towards US$71 a barrel, spurred by record fuel imports to the world's second biggest energy user China.
COMPANIES REPORTING EARNINGS
• Altus Group Income Fund (AIF_u). Expected to report Q2 loss of 3 cents a share, according to Reuters Estimates
• Atrium Innovations Inc. (ATB). Expected to report Q2 earnings of 35 U.S. cents a share
• Baytex Energy Trust (BTE_u). Expected to report Q2 earnings of 25 cents a share
• Cap Reit (CAR_u). Expected to report Q2 earnings of 34 cents a share
• Easyhome Ltd. (EH). Expected to report Q2 earnings of 30 cents a share
• Leon's Furniture Ltd. (LNF). Expected to report Q2 earnings of 15 cents a share
• Neo Material Technologies Inc. (NEM). Expected to report Q2 earnings of 1 U.S. cent a share
• North American Palladium (PDL). Expected to report Q2 loss of 10 cents a share
• Pan American Silver (PAA). Expected to report Q2 earnings of 19 U.S. cents a share
• Petro Andina Resources Inc. (PAR). Expected to report Q2 earnings of 29 cents a share
• RONA Inc. (RON). Expected to report Q2 earnings of 59 cents a share
• Semafo Inc. (SMF). Expected to report Q2 earnings of 6 U.S. cents a share
• Taseko Mines (TKO). Expected to report Q2 earnings of 4 cents a share
• Trinidad Drilling Ltd. (TDG). Expected to report Q2 loss of 4 cents a share
STOCKS TO WATCH THIS MORNING
• Aeterna Zentaris (AEZ). The biopharmaceutical company reported a smaller second-quarter loss on Tuesday, due in part to lower expenses.
• Allon Therapeutics Inc. (NPC). The biotechnology company on Monday reported second-quarter loss of 2 cents a share.
• Cameco Corp. (CCO). The uranium producer said on Monday it is not working with underwriters to draft a preliminary prospectus to sell its 49 percent stake in Centerra Gold (CG) and denied any undisclosed material developments regarding the sale. Speculation heated up on Sunday, after the Globe and Mail newspaper reported Cameco had hired bankers to go ahead with a public stock sale that could raise more than $600 million.
• Canwest Global Communications Corp. (CGS). The company, which is struggling under a debt load of nearly $4 billion, has initiated talks with Canadian regulators on a possible ownership change, officials said on Monday.
• Carmanah Technologies Corp (CMH). The company on Monday reported second-quarter revenue of $9.3 million.
• Cascades Inc. (CAS). The packaging and paper-products company on Tuesday posted a second-quarter profit, helped by the favorable variable cost environment across all its sectors, and said it expected the demand recovery to continue in the third quarter.
• Crocotta Energy Inc. (CTA). The oil and natural gas company on Tuesday posted a second-quarter loss hurt by the steep slide in oil and gas prices, and lower output.
• Fortress Paper Ltd (FTP). The producer of security and specialty papers on Monday reported a 43 percent drop in second-quarter profit as its specialty paper segment was hit by the global economic slowdown.
• Glacier Media Inc. (GVC). The information communications company on Monday reported second-quarter earnings of 9 cents a share.
• GLG Life Tech Corp. (GLG). The company on Tuesday reported a profit for the second quarter, as revenue of the company jumped ten-fold on increased demand for its natural sweetener stevia products and commissioning of two facilities in China.
• Goldcorp (G). The company said on Monday it has acquired shares and warrants that will bring its stake in oft-rumored takeover target Osisko Mining (OSK) to about 13 percent.
• Great Canadian Gaming Corp. (GC). The operator of casinos and thoroughbred racetracks posted a 51 percent rise in second-quarter profit on Monday, as its expense-reduction initiatives more than offset a decline in revenue.
• Harvest Energy Trust (HTE_u). The integrated energy trust on Monday reported net loss of $1.59 per trust unit.
• Jaguar Mining Inc. (JAG). The miner said on Monday it swung to a second-quarter profit, helped by a sharp jump in gold sales and foreign exchange-related gains.
• Migao Corp. (MGO). The specialty potash fertilizer producer on Tuesday reported first-quarter EPS of 21 cents, on sales of $58.9 million, which rose 19 percent.
• Paladin Labs Inc. (PLB). The pharmaceutical company on Tuesday reported second-quarter EPS of 11 cents, before items, on revenue of $26.2 million.
• TriStar Oil & Gas Ltd. (TOG). The company on Monday reported a second-quarter loss of 14 cents a share, before items, on production revenue of $99.8 million.
• Verenex Energy Inc. (VNX). The oil and gas exploration and production company on Monday posted a narrower second-quarter loss, and said it continued to seek consent from Libyan authorities for the sale of the company.
ECONOMIC CALENDAR
08:15 Housing starts-units for July: Expected 145,000 Prior 140,700
CORPORATE EVENTS
09:00 First Quantum Minerals Ltd. (FM). Q2 earnings conference call
09:00 Lions Gate Entertainment (LGF). Q2 earnings conference call
10:00 Aeterna Zentaris Inc. (AEZ). Q2 earnings conference call
10:00 Allied Pptys Real Estate Invt (AP_u). Q2 earnings conference call
10:00 Cascades (CAS). Q2 earnings conference call
11:00 Arctic Glacier Income Fund (AG_u). Q2 earnings conference call
11:00 RONA Inc. (RON). Q2 earnings conference call
11:00 Trinidad Drilling Ltd. (TDG). Q2 earnings conference call
16:00 Savanna Energy Svcs Corp. (SVY). Q2 earnings conference call
ANALYST RECOMMENDATIONS
• Canadian REIT (REF_u) price target raised to $22.50 from $21; rating hold at Genuity
• Crombie REIT (CRR_u) price target raised to $9 from $8; rating market perform at Raymond James
• Ensign Energy Services Inc. (ESI) price target raised to $18 from $17.25; rating market perform at Raymond James
• Ivanhoe Energy Inc. (IE) rating raised to outperform from market perform at Raymond James
• Killam Properties Inc. (KMP) price target raised to $7.25 from $6.50; rating outperform at Raymond James
• Parkbridge Lifestyle (PRK) price target raised to $5.10 from $4.75; rating buy at Genuity
• Sino Forest (TRE) price target raised to $18.50 from $13.50; rating overweight at Morgan Stanley
EXDIVIDEND
• Addax Petroleum Corp. (AXC). Amount $0.10
• Mcgraw Hill Ryerson Ltd. (MHR). Amount $0.255
• Sprott Inc. (SII). Amount $0.025
Note: All values in Canadian currency, unless otherwise state
"This publication is not, nor is it to be construed as, a solicitation or recommendation to investors to purchase, sell or hold any of the securities referred to in this publication. Global Securities Corporation is a member of the Canadian Investor Protection Fund"
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INSIGHT
U.S. banks play catch-up on hiring effort
U.S. banks, which have cut thousands of jobs during the two-year-old financial crisis, are suddenly racing to fill empty seats to make the most of soaring stock markets and narrowing credit spreads.
Banks, including those seen as least hurt by the crisis such as Goldman Sachs Group and JPMorgan Chase & Co, were cautious when it came to hiring early in the year as they adjusted to the recession and a regulatory crackdown, including compensation restrictions that came with taking government funds in the fall.
"Back in March and April, no one really knew if the investment banking business was going to exist again," said David McCormack, managing director at search firm Sheffield Haworth in New York. "The world has changed dramatically in the last four to five months and now banks are hiring."
Since most banks repaid government funds in June, there has been a rush to fill gaps in businesses that have performed well over the first half of the year. Equities, fixed income and commodities are areas that have been in particular demand, McCormack said.
JPMorgan and Goldman Sachs reported second-quarter results boosted by trading gains, while Bank of America Corp's investment bank reported a second-quarter profit that helped offset losses on credit cards and other consumer businesses.
NOW HIRING
Bank of America, the largest U.S. bank, has yet to return US$45 billion in government money and has trimmed headcount and had a wave of top management departures since it bought Merrill Lynch & Co on Jan. 1.
But it, too, has lately snapped up senior officials to join its investment bank.
Sanaz Zaimi from Goldman Sachs, will join Bank of America's London office early next year in a senior investment banking role. She secured a multimillion-dollar, guaranteed pay deal, according to press reports.
Last month, Bank of America hired A.J. Murphy, from JPMorgan, as head of Americas leveraged loan capital markets.
In June, the Charlotte, North Carolina-based bank hired Alan Murray, from Citigroup, as a managing director in energy corporate and investment banking.
Citigroup, which also owes the government US$45 billion, has hired as many as 10 managing directors for its U.S. investment bank this year.
Morgan Stanley hired Alex Ehrlich, from UBS, as global head of prime brokerage in May, and last month, the New York bank hired Jack DiMaio, previously a fixed income head at Credit Suisse Group, as global head of interest rate, credit and currency trading.
The larger U.S. firms, which received billions through the U.S. government's Troubled Asset Relief Program, are now trying to catch up with hiring earlier this year by smaller banks that did not take government funds and by foreign banks that also had no compensation restrictions.
The smaller firms, such as Jefferies Group, and the foreign companies, including the brokerage Nomura Holdings, poached aggressively from major Wall Street banks to build up equity sales and trading and other businesses in the first quarter.
Jefferies Group hired a handful of staff from Merrill Lynch at the start of the year. Among other hires, Nomura added a group of equity salesmen and traders from Bank of America.
STILL CAUTIOUS
New York's financial industry has lost nearly 30,000 jobs as a result of the downturn but "evidence is mounting that (the) region will be spared the worst," the office of the New York City Comptroller said last month.
Still, writedowns and credit losses have left most financial firms cautious when it comes to hiring, and indeed when it comes to expenses in general. Headcount is unlikely to return even to 2007 levels this year, headhunters say.
There is also a bias toward hiring people from other banks that survived the crisis rather than hiring those who lost jobs in the last two years, even if that means matching stock payouts or offering guaranteed bonuses, headhunters say.
"This is not a wave of hiring, this is very selective," said one official at a firm that has hired a handful of senior staff for its investment bank this year.
Experienced senior managers are in particular demand, according to Michael Karp, chief executive of the Options Group recruitment firm. "Banks are looking to make senior management teams stronger," Karp said.
While the banks may still be picky, the shift to adding staff rather than making further cuts is a sign that they believe financial markets are turning around, headhunters say.
"The feeling is that the momentum is hopefully going to remain into next year," said Karp.
--- Elinor Comlay Reuters News
About Thomson Reuters: The unique insights of Thomson Reuters drive productivity and performance by helping our clients generate investment and business ideas, gain fresh perspectives on the markets, and, ultimately, make more money.
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Aug 10, 2009
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MONDAY, AUGUST 10, 2009 CANADIAN EDITION
TOP STORIES
• Cameco plans to sell Centerra stake - report
• Canwest talks with Ottawa on ownership rules - report
• Sino-Forest profit rises on China fiber demand
• Uranium One loss widens on Dominion write-off
• Enerplus posts Q2 loss, sees lower production in H2
• Anvil to get US$200 mln financing for Congo mine
BEFORE THE BELL
Toronto’s main stock index could open mixed open on Monday as investors look to book profits from Friday’s gains amid steady commodity prices. Wall Street is set to open lower as investors pause after a sharp four-week run-up. European shares were lower, weighed by banking and commodity stocks. Asian stocks made modest gains, with the Nikkei average hitting its highest close in 10 months, after a report that Mitsubishi Chemical was in talks to acquire resin maker Mitsubishi Rayon. Oil prices dipped below US$71 a barrel, losing momentum after last week's rally as traders focused on swollen inventories and prospects for a stronger dollar.
COMPANIES REPORTING EARNINGS
• Allied Properties Real Estate Investment Trust (AP_u). Expected to report Q2 earnings of 44 cents a share, according to Reuters Estimates.
• Carmanah Technologies Corp. (CMH). Expected to report Q2 loss of 2 cents a share
• First Quantum Minerals Ltd. (FM). Expected to report Q2 earnings of US$1.17 cents a share
• Great Canadian Gaming Corp. (GC). Expected to report Q2 earnings of 4 cents a share
• Polaris Minerals Corp. (PLS). Expected to report Q2 loss of 3 U.S. cents a share
• Savanna Energy Services Corp. (SVY). Expected to report Q2 loss of 12 cents a share
STOCKS TO WATCH THIS MORNING
• Anvil Mining Ltd. (AVM). The company said it agreed with independent commodities trading company Trafigura Beheer B.V. for a combined debt and equity financing of US$200 million to fund construction at a copper mine in the Democratic Republic of Congo.
• Cameco Corp. (CCO). The uranium miner is planning to sell its interest in Centerra Gold Inc (CG) with a public stock sale that could raise more than $600 million, Toronto's Globe and Mail reported on its website late on Sunday.
• Canwest Global Communications Corp. (CGS). The media company, which is struggling under a debt load of nearly $4 billion, has initiated talks on a potential ownership change with Canadian regulators, Toronto's Globe and Mail reported on its website late on Sunday.
• Day4 Energy Inc. (DFE). The company on Monday reported second-quarter loss of 38 cents, on revenue of $5.7 million.
• Enerplus Resources Fund (ERF_u). The open-end investment trust on Monday swung to a second-quarter loss on weak commodity prices, and said it expects lower production levels during the second half of the year although second-quarter production met its expectations.
• Ensign Energy Services Inc. (ESI). The oil field services provider said on Monday its second-quarter profit fell about 59 percent hurt by reduced drilling activity levels and weak global economic conditions.
• Gran Tierra Energy Inc. (GTE). The independent energy company on Monday reported second-quarter loss of 12 U.S. cents a share, on revenue of US$58.5 million.
• Katanga Mining Ltd (KAT). The copper and cobalt miner reported a second-quarter loss on Friday, hurt by restructuring expenses.
• Keystone North America Inc. (KNA). The funeral services provider on Friday reported first-quarter earnings of 29 U.S. cents a share, on revenue of US$30 million.
• Magna (MGa). CEOs of General Motors and the autoparts maker made some progress in Friday talks on the sale of GM's Opel unit, but key barriers remain, Opel's top labour leader and board member said on Saturday.
• Miner Uranium One (UUU). The company on Monday posted a wider second-quarter loss from continuing operations, mainly related to write-offs at its Dominion mine in South Africa and writedowns on assets held for sale.
• Nortel Networks Corp (NRTLQ). The bankrupt telephone equipment maker will receive preliminary bids in mid-August for its controlling stake in a joint venture with LG Electronics, South Korean media reported on Monday, citing banking sources.
• Northgate Minerals Corp. (NGX). The company on Monday reported second-quarter EPS of 2 U.S. cents, on operating cash flow of US$50 million.
• Power Corp of Canada (POW). The holding company said on Friday its profit dropped 67 percent in the second-quarter as a key operating subsidiary posted weaker results.
• Sino Forest Corp (TRE). The forest plantations operator on Monday posted a second-quarter profit that beat analysts' expectations, as the company saw 21 percent revenue growth, driven by an increased fibre demand from China.
• Uranium One (UUU). The miner posted a wider second-quarter net loss on Monday, missing analysts' expectations, mainly due to write-offs related to its Dominion mine in South Africa.
CORPORATE EVENTS
08:30 Gennum (GND). Update conference call
08:30 Sino Forest Corp. (TRE). Q2 earnings conference call
09:00 Homburg Invest Inc. (HIIa). Q2 earnings conference call
10:00 Gran Tierra Energy Inc. (GTE). Q2 earnings conference call
10:00 Northgate Minerals Corp. (NXG). Q2 earnings conference call
10:00 Uranium One Inc. (UUU). Q2 earnings conference call
11:00 Enerplus Resources Fund (ERF). Q2 earnings conference call
11:00 Polaris Minerals Corp. (PLS). Q2 earnings conference call
11:00 Quest Cap Corp New (QC). Q2 earnings conference call
15:00 Morguard Corp. (MRC). Q2 earnings conference call
15:00 Morguard Real Estate Investment Trust (MRT_u). Q2 earnings conference call
16:00 Ensign Energy Services Inc. (ESI). Q2 earnings conference call
17:00 Carmanah Technologies Corp. (CMH). Q2 earnings conference call
17:00 Great Canadian Gaming Corp. (GC). Q2 earnings conference call
--- Vermilion Energy Trust (VET_u). Annual and special meeting of shareholders
--- Verenex Energy Inc. (VNX). Annual and special meeting of shareholders
ANALYST RECOMMENDATIONS
• Calfrac Well Services Ltd. (CFW) price target raised to $15 from $13; rating outperform at Raymond James
• Fairborne Energy (FEL) price target cut to $6 from $6.50; rating outperform at Raymond James
• Lake Shore (LSG) price target raised to $3.40 from $3.20; rating hold at Canaccord Adams
• Telus Corp. (T) price target raised to $37 from $35; rating outperform at National Bank
Note: All values in Canadian currency, unless otherwise state
"This publication is not, nor is it to be construed as, a solicitation or recommendation to investors to purchase, sell or hold any of the securities referred to in this publication. Global Securities Corporation is a member of the Canadian Investor Protection Fund"
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INSIGHT
Obama cautious despite unemployment cheer
The news was positive, but the response cautious.
President Barack Obama, after weeks of defending his economic policies in the face of falling public opinion polls, welcomed a report on Friday that unemployment dipped in July to 9.4 percent from 9.5 percent in June, but declined to declare victory.
The bad news may not be over yet, he said, after Labor Department data showed the U.S. unemployment rate fell for the first time in 15 months.
"Today we're pointed in the right direction," Obama said. "We have a lot further to go. As far as I'm concerned, we will not have a true recovery as long as we're losing jobs."
Analysts said the president was right to be circumspect.
"He doesn't want a 'Mission Accomplished' moment like Bush did on the war," said Michael Ettlinger, vice president for economic policy at the Center for American Progress, referring to an infamous photo of former President George W. Bush in front of a "Mission Accomplished" banner during the Iraq war.
"These numbers are a sign that we might be past the freefall period of this recession but we're still losing lots of jobs," Ettlinger said. "There still could be worse months than this ahead. It's going to be a long haul back."
Obama has defended vigorously the effectiveness of his US$787 billion economic stimulus package in recent weeks, and the unemployment figures -- fresh after a report showing that GDP contracted only a modest 1 percent in the second quarter -- strengthened his argument.
The White House had played down expectations ahead of the jobs report, saying it would likely show a rise in unemployment and hundreds of thousands of further job losses.
After the data's release, Obama's spokesman, Robert Gibbs, stuck to predictions that unemployment would hit 10 percent this year.
RISKS AWAIT
Analysts said Obama was wise to keep his reaction in check so opposition Republicans could not pounce if the next round of economic indicators is less rosy.
"The economy has stabilized, the markets have risen and we now have improved unemployment figures, but his best bet is to let voters connect the dots themselves," said Julian Zelizer, a Princeton University history professor.
"If he and the administration boast too much, claiming credit for the good times, the danger is that bad numbers can appear in the coming months and he will hand Republicans the very argument they are looking for."
Republicans charge that the president's stimulus package was too expensive and did not do enough to spur economic growth, but the president made clear he saw vindication -- even if more work remained to be done.
"While we've rescued our economy from catastrophe, we've also begun to build a new foundation for growth," Obama told reporters. "That's why we passed an unprecedented Recovery Act less than a month after I took office."
Simon Johnson of MIT's Sloan School of Management said another potential downside to signs of economic recovery could be waning appetite for Obama's plans to overhaul the banking practices that helped start the economic crisis.
"There's a gray lining to the cloud," Johnson said, referring to the jobless figures. "It doesn't help him push for regulatory reform for the financial system."
He said opponents of regulatory reform would argue that an improving economy meant capital requirements for banks did not need to be raised and oversight rules did not need to expand.
"It strengthens the hands of the banks that remain standing like JP Morgan and Goldman Sachs," he said. "There's basically zero chance that anyone will come after them."
--- Jeff Mason, Reuters News
About Thomson Reuters: The unique insights of Thomson Reuters drive productivity and performance by helping our clients generate investment and business ideas, gain fresh perspectives on the markets, and, ultimately, make more money.
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(Please note Canadian quotes are delayed 15 min)
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