|
|
| Market News: News Archive : Morning News Call Week ending |
|
|
Oct 15, 2009
|
|
|
THURSDAY, OCTOBER 15, 2009, CANADIAN EDITION
TOP STORIES
• Goldman Sachs reports robust 3rd-quarter earnings
• Baxter earnings rise, but sales flat
• Lonza, Patheon extend takeover talks deadline
• Nokia reports surprise Q3 loss on networks hit
• GM, Magna set to sign Opel deal, job talks continue
• RIM launching new version of touchscreen BlackBerry
BEFORE THE BELL
Toronto’s main stock index could open flat on Thursday on lower commodity prices. On the macro front, data set for release is the August manufacturing sales, which is expected to fall 0.5 percent, compared to a rise of 5.5 percent in the previous month, according to a Reuters poll. Wall Street is poised for a lower open after Goldman Sachs' quarterly earnings disappointed some investors. Markets will also be closely watching for U.S. consumer price data, which is expected to rise 0.2 percent, with excluding volatile food and energy prices seen up 0.1 percent. European shares were down, led by financials, after hitting a fresh one-year high. Asian markets rose after Wednesday's upbeat U.S. retail sales and earnings reports. Oil pared early gains to trade at around US$75.04 a barrel.
COMPANIES REPORTING RESULTS
•Etruscan Resources Inc. (EET). Expected to report Q3 loss of 2 cents a share, according to Thomson Reuters I/B/E/S
STOCKS TO WATCH THIS MORNING
• Ainsworth Lumber Co. Ltd. (ANS). The company said on Wednesday Chris Davies has been appointed as the CFO, succeeding Robert Allen, who has left the company.
• Aura Minerals Inc. (ORA). The company said on Wednesday third-quarter gold production was 6,925 ounces from San Andres gold mine in Honduras.
• Canadian Imperial Bank of Commerce (CM). The joint venture of CIBC and Bank of New York Mellon named on Wednesday Thomas Monahan as president and CEO of CIBC Mellon Global Securities Services Co and CIBC Mellon Trust Co.
• Crescent Point Energy Corp. (CPG). The company said on Wednesday it plans to sell shares worth $500 million to a group of underwriters and proceeds will be used to cut debt or acquire rivals.
• Guestlogix Inc. (GXI). The company on Thursday said it broke-even in its third-quarter, and revenue was $4.8 million.
• Jaguar Mining Inc. (JAG). The company said its third-quarter gold output increased 19 percent, helped by improved production at its Turmalina and Paciencia mines in Brazil.
• Magna international (MGa). U.S. carmaker General Motors was close to signing a deal to sell a 55 percent stake in its European arm Opel to the autoparts maker on Thursday as talks continued with unions over job cuts. Sources in Germany, home to around half of Opel's 50,000 staff, said the deal could be signed on Thursday or Friday.
• Minera Andes Inc. (MAI). The explorer said on Wednesday production at one of its mine in Argentina has been suspended due to labor related issues.
• Paladin Labs Inc. (PLB). The speciality pharmaceuticalcompany and Pfizer Canada on Thursday amended their agreement over Estring and said it will take over commercial responsibilities for selling, marketing and distribution of Estring in Canada upon the close of Pfizer's acquisition of Wyeth.
• Patheon (PTI). The drugmaker and Swiss drugs industry supplier Lonza have again extended an exclusivity and due diligence period for the Swiss group's takeover bid, the companies said on Thursday.
• Platmin Ltd. (PPN). The miner said on Thursday net income was about US$6.6 million for quarter but incurred a loss of about US$7 million for six months ended August.
• Research In Motion (RIM). The BlackBerry maker said on Thursday it is launching a new version of its touchscreen Storm smartphone, marking its latest move in the fight with Apple's iPhone.
• Vasogen Inc. (VAS). The biotech company said on Thursday it narrowed its third-quarter loss as the company wound down operations.
• Yukon Nevada Gold Corp. (YNG). The company said on Wednesday it has entered into an agreement with an environmental group in the form of consent decree to restart production at Jerritt Canyon Milling facility located about 50 miles from Elko, Nevada. The company said it is targeting 150,000 ounces of gold in first year of production.
ECONOMIC CALENDER
08:30 Manufacturing sales for Aug: Prior 5.5% Expected -0.5%
CORPORATE EVENTS
17:00 OSI Geospatial (OSI). Q3 earnings conference call
ANALYST RECOMMENDATIONS
• Baffinland Iron Mines (BIM) rating cut to market perform from outperform at Raymond James
• Breaker Energy (WAV) rating cut to market perform from outperform at Raymond James
• Capstone Mining (CS) price target cut to $3.70 from $3.80; rating buy at Canaccord Adams
• Crescent Point Energy (CPG) price target cut to $40.25 from $41.25; rating buy at Genuity
• Nal Oil & Gas Trust (NAE_u) price target raised to $13.50 from $13.00; rating outperform at Raymond James
EXDIVIDEND
• Forzani Group Ltd. (FGL). Amount $0.075
• Potash Corp. of Saskatchewan Inc. (POT). Amount US$0.10
Note: All values in Canadian currency, unless otherwise stated
"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"
|
|
|
|
|
|
INSIGHT
COLUMN - This is Jamie's land, this is your land
It's a tale of two economies -- one for the titans of U.S. banking and one for the rest of us.
Yes, JPMorgan Chase's third-quarter results were impressive and a testament to strength of its still solid investment bank. Much of the credit, however, falls to JPMorgan's bond trading desk, which accounted for nearly 20 percent of the bank's US$28 billion in net revenues.
And expect much the same on Thursday, if not even more impressive results, from that other Wall Street colossus -- Goldman Sachs.
But draw back the curtain and you'll see that without its resurgent investment bank, Jamie Dimon's banking empire looks rather ordinary.
JPMorgan's credit card division lost US$700 million, even as the bank overall posted a net profit of US$3.59 billion. Retail financial services eked out a mere US$7 million in net income.
There's no evidence that JPMorgan, despite its surprising earning prowess, is stepping up its commercial lending-especially to mid-sized businesses. The commercial bank's portfolio of loans has held fairly steady over the past year.
That's no doubt an indication of lax demand from companies still trying to navigate the Great Recession. But it is also an indication of the still-tight credit markets for many companies.
Of course, if companies can't borrow money, it's difficult for them to grow and create jobs. You know, the kind of jobs that help middle-class families put food on the table -- not the kind of Wall Street jobs that generate fat year-end bonuses from pushing blips of light around a trading terminal.
The real economy, meanwhile, continues to weigh on the bank. In the quarter, JPMorgan set aside US$2 billion to cover losses on troubled consumer loans, raising the total money the bank put aside for all bad loans to US$31.5 billion. That's a lot of loans the banks expects to go sour.
Still, JPMorgan can afford to be aggressive when it comes to setting up reserves for bad loans because of its scale and dominance. Many other banks simply can't replicate that feat and also churn out a handsome profit. So expect banks smaller than JPMorgan to report far more mediocre third-quarter
numbers. That's what living in a land of two economies has come to mean.
--- By Matthew Goldstein, a Reuters columnist. The views expressed are his own.
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.
|
|
|
|
Oct 14, 2009
|
|
|
WEDNESDAY, OCTOBER 14, 2009, CANADIAN EDITION
TOP STORIES
• JPMorgan 3rd-quarter profit jumps
• Host Hotels beats estimates on cost cuts
• Abbott posts Q3 EPS 92 U.S. cents, before items
• ASML Q3 bookings bonanza fuels tech recovery hopes
• LG Display to set up JV for US$4 bln China LCD plant
BEFORE THE BELL
Toronto’s main stock index could open higher on Wednesday as commodity prices rose on weak greenbag. Wall Street is also poised for a higher start after JPMorgan posted a surge in profit following stronger numbers from Intel a day earlier. On the macro front, markets would keep an eye on U.S. retail sales data and the FOMC minutes from its meeting of Sept. 22-23. European shares rose to a one-year high, led by miners and after earnings from ASML further reassured investors. Asian markets, barring Nikkei average, rose to their highest level since early August, buoyed by commodity and technology stocks. Oil surged for a fifth day to hover around US$75 a barrel, boosted by optimism for a higher energy demand. Gold shed early gains after rising above US$1,070.
STOCKS TO WATCH THIS MORNING
• Adriana Resources Inc. (ADI). The company said on Tuesday it submitted a new permit application for the development of a deep sea terminal port in Brazil with a capacity of 45 million tonnes per year.
• Barrick Gold Corp. (ABX). The world’s biggest gold producer said on Tuesday it expects 2009 gold production of 7.2 million to 7.6 million ounces and total cash costs of US$450 to US$475 per ounce. Barrick also added gold production in 2010 is expected to grow to 7.7 to 8.1 million ounces at lower total cash costs than 2009.
• Capstone Mining Corp. (CS). The company said on Wednesday third-quarter production would be a below average while production for fourth-quarter is seen above average.
• Catalyst Paper (CTL). The pulp and paper maker said late on Tuesday its CFO David Smales will leave the company effective Nov. 4 to join a Toronto-based construction and infrastructure development firm.
• Detour Gold (DGC). The gold explorer said on Tuesday it has signed an interim agreement with an aboriginal group as part of negotiations regarding the company's gold project in northeastern Ontario.
• EXFO Electro-Optical Engineering Inc. (EXF). The company posted on Tuesday a fourth-quarter loss, hurt by restructuring charges and lower sales volume caused by the recession, and forecast a first-quarter loss.
• IMRIS Inc. (IM). The supplier of surgical imaging solutions said on Tuesday it entered into a bought deal financing agreement through which about 3.2 million common shares will be issued at $5.60 each, and the proceeds will be used for working capital and general corporate purposes.
• Vermilion Energy Trust (VET_u). The company said on Tuesday it is offering 7.3 million trust units at $30.90 each and said the net proceeds will initially be used to reduce outstanding indebtedness.
ANALYST RECOMMENDATIONS
• Eastern Platinum (ELR) rating cut to outperform from strong buy at Raymond James
• Strathmore Minerals (STM) rating cut to market perform from outperform at Raymond James
• Victoria Gold (VIT) rating cut to outperform from strong buy at Raymond James
EXDIVIDEND
• Bombardier Inc. (BBDb). Amount $0.0254
• Glentel Inc. (GLN). Amount $0.09
Note: All values in Canadian currency, unless otherwise stated
"This publication is not, nor is it to be construed as, a solicitation or recommendation to investors to purchase, sell or hold any of the securities referred to in this publication. Global Securities Corporation is a member of the Canadian Investor Protection Fund"
|
|
|
|
|
|
INSIGHT
Market doesn't buy tough Bank of Canada talk on C$
Tough words about Canada's soaring currency have yet to convince markets that the Bank of Canada will intervene to slow the rise, raising the odds that the currency will climb above the U.S. dollar for the first time since July last year.
The central bank says a strong dollar could slow Canada's climb out of recession, and insists it has plenty of ammunition to slow the rise. The Canadian dollar, which hit a 14-month high of 97.42 U.S. cents on Tuesday, is up more than 27 percent since March.
But analysts say intervention -- selling the Canadian dollar on foreign exchange markets to drive its price lower -- might not work, and few expect it.
"What are the chances that it's going to be effective? How much of this is Canadian dollar strength and how much of it is broad U.S. dollar weakness? The odds against successful intervention seem high right now," said Marc Chandler, a strategist at Brown Brothers Harriman in New York.
"In the short run I don't see much that Canada can do." The Canadian dollar, dubbed the loonie for the bird pictured on the one dollar coin, reached a modern-day high around US$1.10 in 2007.
That left exporters fretting about Canada's ability to compete and helped create Canada's first trade deficits in years. One industry group says a 1 percent rise in the Canadian dollar cuts manufacturing sales by about $2 billion.
Yet analysts say higher prices for the commodities that Canada exports are largely behind the rise in the currency. That makes it tougher for the central bank to say the rise is driven by speculation -- a key criteria for intervention.
"I don't think that it can be dismissed, but I don't think it's highly likely. I think the Bank of Canada is very reticent to do it especially, given the overall dollar backdrop," said David Watt, senior currency strategist RBC Capital Markets.
"We do have the global economy starting to improve, commodity prices are doing well. And I think that the Bank of Canada would struggle to get their communications strategy out in this situation."
NOT OUT OF BULLETS
Government and Bank of Canada officials have spent months trying to "jawbone" the Canadian dollar lower, warning repeatedly that it threatens the recovery and could cause inflation to undershoot the central bank's two percent target.
Asked about intervention, Governor Mark Carney, a self-assured former Goldman Sachs banker, said last month the central bank "will do what is required" to hit that target.
He also stressed the bank is "not out of bullets" just because it has cut rates to a record low and promised to keep them there until at least the middle of next year, provided inflation remains under control.
The bank next sets rates Oct 20, followed two days later by a raft of new economic forecasts. So near-term intervention would clash with a news blackout ahead of rate decisions.
Currency intervention by a major Western central bank during the current crisis would not be unprecedented. The Swiss National Bank stunned markets in March when it intervened to weaken the Swiss franc, citing deflation risks
But the Bank of Canada has not intervened to support the Canadian dollar since 1998, when it changed its policy to act only in "the most exceptional of circumstances".
These include disruptive, extreme short-term movements that could threaten the economy's long-term outlook.
"Their mandate is disorderly moves. Maybe they might consider intervention just to smooth things out, but the move
has been anything but disorderly and you just can't stand in the way of this freight train at the moment," said Steve Butler, director of foreign exchange trading at Scotia Capital.
Still, not all market players doubt the Bank of Canada's willingness to act. Based on its own criteria, the numbers would support the bank should it wish to act, said Neil Mellor, a currency strategist with Bank of New York Mellon in London.
"You have to put (the odds of intervention at) a little higher perhaps than 50 percent. I think you have to, given what has been said. Otherwise it's empty rhetoric and the market knows that and it will carry on buying the (Canadian dollar)," he said.
--- Jeffrey Hodgson, Reuters
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.
|
|
|
|
Oct 13, 2009
|
|
|
TUESDAY, OCTOBER 13, 2009 CANADIAN EDITION
TOP STORIES
• NAL Oil to buy Breaker Energy for $310 mln in stock
• J&J sales disappoint, but cost cuts help profit
• AIG to sell Taiwan insurance unit for US$2.15 billion
• Domino's profit beats estimates
• BofA to turn over documents on Merrill buy
BEFORE THE BELL
Toronto’s main stock index could open higher on Tuesday after a long weekend as record gold prices and stronger oil futures boost the resource-heavy market. On the macro front, investors will keep an eye on new housing price index, which is expected to rise by 0.2 percent, according to a Reuters poll. Wall Street is also poised for a higher start after better-than-expected results ahead of earnings report from tech bellwether Intel. European shares were down led by financials, while Asian stocks rose to a 14-month high as some traders took bets that U.S. corporate earnings will be good enough to keep a rally going. Oil rose to trade at around US$74.21 a barrel, its fourth straight session gain. Silver prices rallied to their highest since July 2008 and gold prices rose to a record above US$1,065 an ounce, boosted by persistent weakness in the dollar.
STOCKS TO WATCH THIS MORNING
• Active Control Technology Inc. (ACT). The mining services company reported on Friday a loss of $0.037 a share for the fiscal year ended July 31, 2009. Revenue for the period was $1.3 million compared with $1 million, a year ago.
• Barrick Gold Corp. (ABX). Mining group Xstrata Plc agreed to sell its 70 percent interest in the El Morro copper-gold project in Chile for US$465 million to Barrick Gold, Xstrata said on Monday..
• Brookfield Asset Management Inc. (BAMa). An Australian unit of Brookfield Asset Management plans to raise A$65 million in a bond offer aimed at retail investors in Australia and New Zealand.
• Consolidated Thompson Iron Mines Ltd. (CLM). The company said on Friday it has offered to buy 100 percent of the Wabush Mines joint venture for US$120 million, from U.S. Steel Canada Inc, ArcelorMittal and Cliffs Natural Resources Inc.
• Magna (MGa). General Motors Co may finalise a deal this week to sell a majority stake in its European carmaking arm Opel to a Canadian-Russian consortium, its CEO said on Tuesday, as the firm sheds unwanted brands. The Detroit automaker decided last month to sell a 55 percent stake in Opel to a consortium including Magna and Russia's Sberbank.
• NAL Oil & Gas Trust (NAE_u). The company on Tuesday agreed to buy junior oil explorer Breaker Energy Ltd (WAV) for $310 million in stock to enhance its assets base in central Alberta and northeast British Columbia.
• Norbord Inc. (NBD). The producer of wood-based panels said on Tuesday it is consolidating its common shares in the ratio of one-for-ten shares, which will be effective Oct. 16.
• Rocky Mountain Resources Corp. (RKY). The company said on Friday one of its subsidiaries has agreed to sell 100 percent stake in the Paris Hills Phosphate/Vanadium Property to Stonegate Agricom Ltd. Stonegate will pay $1 million in cash and issue 6 million common shares valued at 50 cents per common share.
• Suncor Energy Inc. (SU). The energy company said in a statement on Monday it was repairing a fire-damaged upgrader in the oil sands north of Fort McMurray, Alberta. The company said there were no injuries caused by the early morning fire on the upgrader. Separately,a spokeswoman said on Monday, the comany does not expect the hydrocracker shutdown at its 80,000 barrel per day refinery in Sarnia, Ontario, to have a major impact on supply, but has no timeline for restart.
• TransAlta Corp. (TA). The Canada's largest publicly traded electricity producer on Friday filed for mixed shelf of up to $1 billion, an SEC filing showed.
COMPANIES REPORTING RESULTS
• Exfo Electro-Optical Engineering (EXF). Expected to report Q4 loss of 5 U.S. cents a share, according to Thomson Reuters I/B/E/S
• NovaGold Resources Inc. (NG). Expected to report Q3 loss of 1 cent a share
• OSI Geospatial (OSI). Expected to break-even (USD) in Q3
ECONOMIC CALENDER
08:30 New Housing PI for Aug: Prior 0.3% Expected 0.2%
CORPORATE EVENTS
17:00 Exfo Electro-Optical Engineering (EXF). Q4 earnings conference call
17:00 OSI Geospatial (OSI). Q4 earnings conference call
ANALYST RECOMMENDATIONS
• Birchcliff Energy (BIR) price target raised to $8.25 from $7.75 at Raymond James
• Crew Energy (CR) price target raised to $9.25 from $8.25 at Raymond James
• Delphi Energy (DEE) price target raised to $1.90 from $1.55; rating buy at Acumen Capital
• Finning International (FTT) rating raised to outperform from market perform at Raymond James
• Ivanhoe Energy (IE) price target raised to $3 from $2 at Raymond James
• Miranda Technologies (MT) rating cut to market perform from outperform at Raymond James
• Nexen Inc. (NXY) price target cut to $24 from $25.50 at Raymond James
• Talisman Energy (TLM) price target cut to $21 from $25 at Raymond James
EXDIVIDEND
• Corus Entertainment Inc. (CJRB). Amount US$0.0441
• Deans Knight Income Corp. (DNC). Amount $0.0583
• Empire Co. (EMPa). Amount $0.185
• Goldcorp (GG). Amount US$0.015
• Marsulex Inc. (MLX). Amount $0.185
• Plazacorp Retail Properties Ltd. (PLZ). Amount $0.0463
• Reitmans Cda Ltd. (RET). Amount $0.18
• Richelieu Hardware Ltd. (RCH). Amount $0.08
• S Split Corp. (SBN). Amount $0.0501
• Shaw Communications (SJR). Amount US$0.0607
• Tax Optimized Return Oriented (TOa). Amount $0.0492
Note: All values in Canadian currency, unless otherwise stated
"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"
|
|
|
|
|
|
INSIGHT
Commercial real estate to drive US bank failures
The next big headache for banks is likely to be commercial real estate and analysts expect big losses and another wave of bank failures to result.
Banks held about US$1.7 trillion in commercial real estate loans at the end of September, according to Federal Reserve data, o r about 15 percent of their total assets. But to the extent these loans weaken, small banks are likely to be hit the hardest because larger banks are better diversified.
The banks that analysts say could risk big losses include Salt Lake City's Zions Bancorp, Columbus, Georgia- based Synovus Financial Corp and Dallas-based Comerica Inc.
But it is not just earnings that are at stake -- bank failures could surge in the coming quarters.
"The serenity of the quiet closure of two to three banks per week is soon going to come to an end," said George Ball, chairman of Sanders Morris Harris Group, an investment bank and investment adviser, in Houston.
Banking regulator the Federal Deposit Insurance Corporation had 416 banks on its watch list of problem banks at the end of the second quarter and veteran analyst Dick Bove at Rochdale Securities expects another few hundred will fail in the next few quarters.
The FDIC closed Chicago-based Corus Bank on Sept. 11, following losses on commercial real estate and condominium developments in Arizona, California, Florida and Nevada.
At Warren Bank in Michigan -- closed on Oct. 2 by the FDIC -- almost 40 percent of its US$395 million in total loans were in commercial real estate.
"Real estate lending has long been the specialty of Warren Bank," the company still claims on its website.
Analysts are worried banks such as Corus and Warren Bank may be just the first of a coming wave of bank failures due to commercial mortgages.
Banks have been slow to recognize losses from commercial mortgages to forestall posting big losses, preferring to alter loan terms in the hope an improving economy will keep the loans from heading south, a phenomenon widely known as "extend and pretend."
"It takes a long time for an actively rented commercial real estate space to get to a point where a bank can't be flexible in terms of conditions and has to start writing it down," said Tom Mitchell, analyst at Miller Tabak & Co.
Banks may set aside larger amounts of money to cover losses in the fourth quarter, when banks consult with auditors over their results, Mitchell said.
When commercial real estate makes up a large portion of a bank's balance sheet, the bank is at risk of being forced to set aside much more money for losses.
At Zions, commercial real estate accounted for almost 35 percent of its US$41.6 billion in loans at the end of the second quarter, while Synovus had almost 28 percent of its US$28 billion loan portfolio in commercial real estate. Comerica's commercial real estate loans made up about 22 percent of its loan portfolio.
But while regulators stepped in to prop up large banks suffering from residential mortgage losses, they are not expected to help out small regional banks suffering commercial real estate losses since these are not seen as a threat to the wider financial system.
"The system will survive but with more cuts and bruises. We're going to see quite a lot of consolidation," said Marshall Front, chairman of Front Barnett Associates in Chicago.
"It's not pretty and there's not a lot of relief out there for these banks."
--- Elinor Comlay, Reuters
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Please note Canadian quotes are delayed 15 min)
|
|
