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Market News: News Archive : Morning News Call Week ending

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Nov 13, 2009

FRIDAY, NOVEMBER 13, 2009, CANADIAN EDITION

TOP STORIES
• Enerplus Q3 profit plunges 90 pct
• Suncor budgets $5.5 bln for 2010
• Groupe Aeroplan Q3 profit lags market view
• Uranium One narrows loss, tweaks 2010 outlook
• GM still wants state aid for Opel restructuring

BEFORE THE BELL
Toronto’s main stock index could open higher on Friday as commodity prices gain support from weaker U.S. dollar. On the macro front, trade data for September is expected to show a narrower deficit at $1.75 billion, compared with a record deficit of $1.99 billion in the previous month. Wall Street is also poised for a higher open, following a sell-off in the previous session. European shares were flat while Asian markets were down. Oil rose above US$77 a barrel but bulging fuel inventories in the U.S. kept price gains in check. Gold rose to trade at around US$1105.70.

COMPANIES REPORTING RESULTS
• Equinox Minerals Ltd. (EQN). Expected to report Q3 earnings of 4 U.S. cents a share, according to Thomson Reuters I/B/E/S
• Harvest Energy Trust (HTE_u). Expected to report Q3 loss of 17 cents a share
• Vector Aerospace Corp. (RNO). Expected to report Q3 earnings of 22 cents a share
• Western Coal Corp. (WTN). Expected to report breakeven in Q2

STOCKS TO WATCH THIS MORNING
• Advantage Oil and Gas Ltd. (AAV). The company on Thursday reported a third-quarter FFO of 26 cents per share.
• Amorfix Life Sciences Ltd. (AMF). The company on Friday reported second-quarter loss of 3 cents a share.
• Athabasca Potash Inc. (API). The potash exploration company on Thursday reported third-quarter loss of 25 cents per share.
• Bankers Petroleum Ltd. (BNK). The oil and gas explorer on Friday reported third-quarter EPS of $0.008, on revenue of $23.4 million, which rose 17 percent and said production averaged 6,258 bopd in the quarter.
• Birchcliff Energy Ltd. (BIR). The oil and gas explorer on Thursday reported third-quarter loss of 7 cents per share.
• Boardwalk Real Estate Investment Trust (BEI_u). The company on Friday said its third-quarter funds from operations fell 5 percent, hurt by charges incurred while looking to increase liquidity.
• Canadian Helicopters Income Fund (CHL_u). The company on Thursday reported a third-quarter EPS of $1.26.
• Candente Resource Corp. (DNT). The company reported on Thursday third-quarter loss of 1 U.S. cents per share.
• Canyon Services Group Inc. (FRC). The oilfield service company reported on Thursday third-quarter loss of 21 cents per share. The company also appointed Dennis Weinberger as the CEO, effective from November 13.
• Cargojet Income Fund (CJT_u). The company said on Thursday it raised its monthly distribution to 42 cents per unit, from 27 cents per unit.
• Chartwell Seniors Housing Real Estate Investment Trust (CSH_u). The company on Thursday reported a third-quarter adjusted FFO of 18 cents per unit.
• Cinch Energy Corp. (CNH). The company said on Thursday it appointed Sid Dykstra as CEO, effective immediately, replacing the retiring John Elick.
• CryptoLogic Ltd. (CRY). The internet casino and branded gaming software company on Friday reported a third-quarter loss 25 U.S. cents per share, on revenue of US$9.6 million.
• Enerplus Resources Fund (ERF_u). The energy investment trust on Friday reported a 92 percent drop in third-quarter profit on lower natural gas prices.
• Fairfax Financial Holdings Ltd. (FFH). The financial services holding company ordered US$750 million of California's Build America Bonds when they were put up for sale, a spokesman for the state treasurer said on Thursday.
• GlobeStar Mining Corp. (GMI). The company on Thursday reported third-quarter gross revenue of $20.7 million.
• Great Canadian Gaming Corp. (GC). The operator of casinos and thoroughbred racetracks posted a 67 percent rise in third-quarter profit as cost-cutting measures more than offset a decline in revenue.
• Groupe Aeroplan Inc. (AER). The company on Friday reported a lower third-quarter profit that also missed market expectations on a drop in gross billings.
• Hanfeng Evergreen Inc. (HF). The company on Thursday reported first-quarter EPS of 10 cents, on sales of $55.1 million.
• Hartco Inc. (HCI). The company reported on Thursday third-quarter EPS of 11 cents, on revenue of $99 million.
• Hemisphere GPS (HEM). The maker of GPS products on Friday reported a wider-than-expected third-quarter loss due to weak customer purchasing activity in its key agriculture sector.
• Innergex Renewable Energy Inc. (INE). The company on Thursday reported third-quarter loss of 12 cents, on revenue of $4.6 million.
• Insignia Energy Ltd. (ISN). The company on Thursday reported third-quarter FFO of 7 cents per share. The company said its projected 2009 exit rate outlook now stands at 2,200 boe/d and forecast first-half 2010 capital budget of $17 to $20 million.
• Ivernia Inc. (IVW). The base metal firm reported on Thursday third-quarter loss of 3 U.S. cents, on revenue of US$207,000
• Jazz Air Income Fund (JAZ_u). The company on Thursday reported third-quarter adjusted EPS of 27 cents per unit, on revenue of $379.7 million.
• Leon's Furniture Ltd. (LNF). The home furnishings retailer on Thursday reported third-quarter EPS of 22 cents, on total sales of $236.7 million and declared quarterly dividend of 7 cents a share. The company also said growing sales and profits would be pressured for the rest of the year.
• Linamar Corp. (LNR). The auto-parts maker said on Thursday after stripping out unusual items, it managed to return to profit in third-quarter as auto production and sales levels started to pick up.
• Maxim Power Corp. (MXG). The power producer on Thursday reported third-quarter EPS of 2 cents, on revenue of $27.6 million and forecast full year EPS of 11 cents.
• MEGA Brands Inc. (MB). The toymaker on Friday reported third-quarter EPS of US$1.22, on net sales of US$118 million.
• Neo Material Technologies Inc. (NEM). The maker of magnetic material and magnets on Thursday posted a 16 percent rise in third-quarter profit that beat market estimates, helped by lower expenses.
• New Flyer Industries Inc. (NFI_u). The bus maker on Thursday reported third-quarter revenue of US$303.6 million, which rose 19 percent.
• Northern Property Real Estate Investment Trust (NPR_u). The company on Thursday reported third-quarter funds form operations of 57 per unit.
• Orleans Energy Ltd. (OEX). The oil and gas explorer on Thursday reported third-quarter EPS of 15 cents, on petroleum and natural gas revenue of $9.5 million.
• Peak Energy Services Ltd. (PES_u). The company on Thursday reported third-quarter loss of 10 cents per unit on revenue of $21.1 million, which fell 47 percent.
• Peer 1 Network Enterprises Inc. (PIX). The provider of online IT infrastructure on Thursday reported first-quarter EPS of 1 U.S. cent, on revenue of US$23.4 million.
• Petroflow Energy Ltd. (PEF). The company on Thursday said it was not in compliance with its debt covenants and needed to raise $18 million by Dec. 17 to reduce debt as part of an amended agreement with its lenders. For the third quarter, the company reported a net loss of $8.7 million, or 30 cents a share, compared with net income of $12.0 million, or 41 cents a share, a year ago.
• Retrocom Mid Market Real Estate Investment Trust (RMM_u). The company on Thursday reported third-quarter FFO of 11 cents a share.
• Royal Laser Corp. (RLC). The company on Thursday broke-even in second-quarter, on revenue of $67.6 million.
• Savanna Energy Services Corp. (SVY). The service provider for oil and gas industry on Thursday reported third-quarter loss 6 cents a share.
• Stella-Jones Inc. (SJ). The wood utility poles maker on Friday reported third-quarter EPS of 65 cents, on sales of $104.7 million, which fell 6 percent.
• Storm Exploration Inc. (SEO). The junior oil and gas explorer on Thursday reported third-quarter FFO of 18 cents a share.
• Suncor Energy Inc. (SU). The oil company said on Friday it is budgeting $5.5 billion for capital spending in 2010 and will restart construction on its Firebag Stage 3 oil sands project. The company said it would use $1.5 billion for growth project funding at its oil sands operations and $4 billion in sustaining existing operations.
• Taseko Mines Ltd. (TKO). The mineral explorer on Thursday reported third-quarter operating profit of $9.4 million and said it sold 12.7 million pounds copper and 149,000 pounds molybdenum in the quarter.
• Tekmira Pharmaceuticals Corp. (TKM). The company on Thursday reported third-quarter loss of 5 cents a share.
• TransAtlantic Petroleum Ltd. (TNP). The company on Friday reported third-quarter loss of 5 cents a share, on revenue of $9.3 million and forecast 2010 capital expenditure of $115 to $135 million.
• TVI Pacific Inc. (TVI). The miner on Thursday reported third-quarter EPS of 21 cents, on net revenue of $25.7 million.
• Uranium One (UUU). The miner said on Friday its third-quarter loss narrowed from a year earlier when it included a massive writedown.
• Western Financial Group Inc. (WES). The insurance and financial service provider on Thursday reported third-quarter EPS of 6 cents a share.
• Westport Innovations Inc. (WPT). The company, which provides natural gas engines serving the medium and heavy-duty vehicle markets on Thursday reported second-quarter loss of 28 cents.
• Wex Pharmaceuticals Inc. (WXI). The company on Thursday reported second- quarter loss of 3 cents a share, from continuing operations. The company expects to enrol 60 patients required for planned interim analysis by first-quarter of 2010.
• Zedi Inc. (ZED). The company on Thursday reported third-quarter revenue of $11.2 million.
• Zongshen PEM Power Systems Inc. (ZPP). The company on Friday reported third-quarter revenues of $5.8 million.

ECONOMIC CALENDAR
08:30 Merch trade-deficit for Sept: Prior -$1.99 bln Expected -$1.75 bln
08:30 Merch trade exports for sept: Prior $29.22 bln Expected $29.50 bln
08:30 Merch trade imports for Sept: Prior $31.20 bln Expected $31.30 bln

CORPORATE EVENTS
08:30 CryptoLogic Limited (CRY). Q3 earnings conference call
09:30 Bankers Petroleum Ltd. (BNK). Q3 earnings conference call
10:00 Chartwell Seniors Housing REIT (CSH_u). Q3 earnings conference call
10:00 Groupe Aeroplan Inc. (AER). Q3 earnings conference call
10:00 Neo Material Technologies Inc. (NEM). Q3 earnings conference call
10:00 Stella Jones Inc. (SJ). Q3 earnings conference call
11:00 Boardwalk Real Estate Investment Trust (BEI_u). Q3 earnings conference call
11:00 Enerplus Resources Fund (ERF). Q3 earnings conference call
11:00 Hanfeng Evergreen Inc. (HF). Q1 earnings conference call
11:00 Hemisphere GPS Inc. (HEM). Q3 earnings conference call
11:00 Savanna Energy Services Corp. (SVY). Q3 earnings conference call
11:00 Taseko Mines (TGB). Q3 earnings conference call
11:30 Peak Energy Trust (PES_u). Q3 earnings conference call
13:00 Northern Property Real Estate Investment Trust (NPR_u). Q3 earnings conference call
13:00 Western Canadian Coal Corp. (WTN). Q2 earnings conference call
15:00 Vector Aerospace Corp. (RNO). Q3 earnings conference call

ANALYST RECOMMENDATIONS
• Anvil Mining (AVM) rating cut to outperform from strong buy at Raymond James
• Armtec Infrastructure Income Fund (ARF_u) rating cut to market perform from outperform at Raymond James
• Cominar Real Estate Investment Trust (CUF_u) rating cut to market perform from outperform at Raymond James
• Eastern Platinum (ELR) price target raised to $1.10 from $0.90; rating outperform at Raymond James
• Encana Corp. (ECA) rating raised to outperform from market perform at Raymond James
• Etruscan Resources (EET) rating raised to outperform from market perform at Raymond James
• Gammon Gold (GAM) price target raised to $13.20 from $11.60 at Canaccord Adams
• Petrobank Energy (PBG) price target raised to $50 from $49; rating market perform at Raymond James
• Sino Forest (TRE) price target raised to $21 from $18.50; rating overweight at Morgan Stanley

EXDIVIDEND
• Algoma Central Corp. (ALC). Amount $0.45
• Manulife Financial Corp. (MFC). Amount US$0.1223

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

Reuters Health Summit
Medical device prices in crosshairs of reform

Cash-strapped hospitals are stepping up pressure on the prices of medical devices -- from knee replacements to diagnostic tests and surgical systems -- as momentum builds toward U.S. healthcare reform.
Medical devices represent one of the biggest expenses for hospitals, which are struggling to care for rising numbers of uninsured patients as the weak economy forces more and more Americans out of work.
Congress is taking aim at the medical technology industry with a proposed tax on device makers that would generate as much as US$40 billion over 10 years to help pay for healthcare reform.
At the same time, the hospital industry has accepted a deal with some U.S. senators to absorb US$155 billion in Medicare payment cuts over a decade.
The chairman of the Advanced Medical Technology Association expects the Medicare reductions to hurt the medical device industry, which his group represents.
"Frankly, I think (hospitals) are going to turn to their suppliers, people like us, to help them with this," Michael Mussallem said at the Reuters Health Summit in New York.
Mussallem, who is also chief executive officer of heart valve maker Edwards Lifesciences, said that as hospitals face increasing pressure to cut costs, one way is to push prices lower.
"I would expect, if anything, for that to be more intense in the future," Mussallem said.

FINANCIAL TIES, 'KNOTTY' PROBLEMS
For Tenet Healthcare Corp, reining in the high cost of medical devices is one of its biggest challenges, said Trevor Fetter, CEO of the No. 3 U.S. hospital chain.
"Margins on devices are extremely high," especially on cardiac and orthopedic devices, Fetter said. But while hospitals bear the cost of those products, he said, their
ability to negotiate better pricing is limited because doctors influence the selection of the devices.
"That is a really knotty problem," he said, due to the often murky financial relationships between many physician specialists and device makers, another issue the U.S. Congress has been trying to address.
Doctors sometimes receive consulting fees or royalties from manufacturers for collaborating in the development of medical technology and thus often have strong preferences for certain products.
Proposals to require physicians to disclose their financial ties with medical device makers have been percolating in the U.S. Congress long before the Obama Administration committed to reforming the healthcare system.
"If we all knew what the payments and sale practices were," Fetter said, "that would probably bring the cost down pretty quickly."
To make matters worse, he said, the government pays hospitals a fixed price when a physician performs a medical procedure, regardless of the cost of the devices or instruments used.
Big device makers such as Boston Scientific Corp and Johnson & Johnson in recent weeks have said they've seen pricing pressure intensify as key markets weakened in the global economic downturn.
Beckman Coulter Chief Executive Officer Scott Garrett told the Reuters Health Summit that he saw no let-up in this trend, even in the absence of healthcare reform.
"Pricing in my career has only gone one way, and that's down," he said. "We're always expecting pricing pressure."

--- Susan Kelly and Debra Sherman, Reuters
For more on the Reuters Health Summit, click here

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.

Nov 13, 2009

INSIGHT

Nov 12, 2009

THURSDAY, NOVEMBER 12, 2009, CANADIAN EDITION

TOP STORIES
• EnCana Q3 profit plunges
• BCE profit jumps amid success of new handsets
• Niko Resources posts Q2 profit
• Sino-Forest posts higher Q3 profit
• FNX Mining posts wider Q3 loss

BEFORE THE BELL
Toronto’s main stock index may open lower on Thursday as commodity prices fall. On the macro front, new housing price index is expected to rise 0.2 percent, according to a Reuters poll. Wall Street is also set for a lower open even after retail giant Wal-Mart reported better-than-expected results. European shares were flat, as gains from telecom companies were off-set by banks and miners. Euro zone data showed industrial output rose to a fifth straight month of gains, suggesting economic recovery is on track. Oil fell more than a US$1 to trade at around US$78.43 a barrel, on expectations of hike in U.S. crude stocks. Gold was down after hitting US$1,122.85 an ounce in Asian trade.

COMPANIES REPORTING RESULTS
• AG Growth International Inc. (AFN). Expected to report Q3 earnings of 96 cents a share, according to Thomson Reuters I/B/E/S
• Canadian Tire Corp. (CTCa). Expected to report Q3 earnings of $1.08 cents a share
• Carmanah Technologies Corp. (CMH). Expected to report Q3 $0.00 cents a share
• Chartwell Seniors Housing REIT (CSH_u). Expected to report Q3 earnings of 7 cents a share
• Cominar Real Estate Investment Trust (CUF_u). Expected to report Q3 earnings of 20 cents a share
• Galleon Energy Inc. (GO). Expected to report Q3 loss of 11 cents a share
• Gammon Gold Inc. (GRS). Expected to report Q3 earnings of 6 U.S. cents a share
• GLV Inc. (GLVa). Expected to report Q2 earnings of 5 cents a share
• Great Canadian Gaming Corp. (GC). Expected to report Q3 earnings of 9 cents a share
• Leon's Furniture Ltd. (LNF). Expected to report Q3 earnings of 24 cents a share
• Linamar Corp. (LNR). Expected to report Q3 earnings of 4 cents a share
• MAXIM Power Corp. (MXG). Expected to report Q3 loss of 2 cents a share
• Neo Material Technologies Inc. (NEM). Expected to report Q3 earnings of 6 U.S. cents a share
• Northern Property REIT (NPR_u). Expected to report Q3 earnings of 26 cents a share
• NuVista Energy Ltd. (NVA). Expected to report Q3 loss of 2 cents a share
• Savanna Energy Services Corp. (SVY). Expected to report Q3 loss of 3 cents a share
• Vecima Networks Inc. (VCM). Expected to report Q1 earnings of 8 cents a share
• Xtreme Coil Drilling Corp. (XDC). Expected to report Q3 earnings of 5 cents a share

STOCKS TO WATCH THIS MORNING
• Anvil Mining Ltd. (AVM). The copper and silver producer on Thursday posted a small third-quarter loss that was narrower than expected, helped by higher copper production at one of its plants.
• ARISE Technologies Corp. (APV). The company on Wednesday reported third-quarter sales of $6.6 million.
• Aura Minerals Inc. (ORA). The exploration and development company on Wednesday reported third-quarter loss of 5 cents a share.
• BCE Inc. (BCE). The phone company on Thursday posted a jump in its third-quarter profit that topped analyst expectations as subscribers flocked to new mobile phones and services despite a weak economy.
• Bronco Energy Ltd. (BCF). The oil and gas firm on Wednesday reported third-quarter loss of 12 cents per share. The company also said Bitumen production to-date has fallen short of expectations.
• Brookfield group (BAMa). Debt-laden Australian asset manager Babcock & Brown Infrastructure urged investors to approve a US$1.6 billion rescue plan backed by the company, saying no rival plan from Royal Bank of Scotland was on the table.
• Capstone Mining Corp. (CS). The Copper producer reported third-quarter adjusted EPS of 9 U.S. cents.
• Connacher Oil and Gas Ltd. (CLL). The company on Wednesday reported third-quarter EPS of 11 cents, on revenues of $151.4 million.
• Crystallex International Corp. (KRY). The company reported on Wednesday third-quarter loss of 7 U.S. cents per share, from continuing operations.
• CVTech Group Inc. (CVT). The electrical services provider on Thursday reported third-quarter EPS of 3 cents, on revenue of $44.6 million.
• Denison Mines Corp. (DML). The Canadian uranium producer reported a third-quarter loss on Wednesday, hurt by a non-cash impairment charge of US$100 million related to its mineral property investment in Zambia.
• EnCana (ECA). The natural gas producer on Thursday reported a 99 percent drop in third-quarter profit as oil and gas prices sank.
• FNX Mining Co. (FNX). The nickel and copper miner on Thursday reported a wider third-quarter loss, hurt by an extended maintenance shutdown and ongoing labour interruption at its third-party processing facilities in Sudbury.
• Iteration Energy Ltd. (ITX). The oil and gas exploration company on Thursday posted a third-quarter loss that was in line with market estimates, and raised its funds from operations forecast for the year, citing higher commodity prices.
• Kinross Gold Corp. (K). The company on Wednesday announced credit guarantee facility of US$125 million, which will expire in November 2012. The company also said this guarantee facility is in addition to recently amended US$450 million revolving credit facility.
• LAB Research Inc. (LRI). The company, which does pharmaceutical research on a contract basis on Thursday posted a wider third-quarter loss, hurt by lower revenue at its Danish operations and higher administrative expenses.
• Migao Corp. (MGO). The China based company on Thursday reported second-quarter EPS of 21 cents, on sales of $67.7 million.
• Niko Resources Ltd. (NKO). The oil explorer on Thursday posted a second-quarter profit, as the company benefitted from the continued ramp up of production from its oil property in India.
• Novadaq Technologies Inc. (NDQ). The company on Thursday reported third-quarter loss of 16 U.S. cents per share, on revenue of US$1.72 million.
• Onex Corp. (OCX). The private-equity firm said on Wednesday it took a loss in the third-quarter, due largely to goodwill impairment charges stemming from its stake in aircraft manufacturer Hawker Beechcraft.
• Orbit Garant Drilling Inc. (OGD). The company on Thursday reported first-quarter EPS of 8 cents, on revenue of $24.4 million, which rose 6 percent.
• Paramount Resources Ltd. (POU). The independent energy company on Wednesday reported third-quarter loss of 38 cents a share.
• Peyto Energy Trust (PEY_u). The oil and gas explorer on Wednesday posted a 58 percent drop in third-quarter profit, hurt by lower oil and gas production.
• Pinetree Capital Ltd. (PNP). The diversified investment and merchant banking firm on Wednesday reported a third-quarter profit, helped by gains from investments.
• Sino-Forest Corp. (TRE). The forest operator on Thursday reported third-quarter profit that topped analysts' estimates as the company, which owns a majority of its properties in China, sold higher volumes of plantation fibre and continued to benefit from the nation's economic growth.
• Spectral Diagnostics Inc. (SDI). The company on Thursday reported third-quarter loss of 1 cent a share, on revenue of $815,000.
• Toromont Industries Ltd. (TIH). The company on Thursday said it intends to acquire Enerflex Systems Income Fund (EFX_u). The company said it offered $13.50 in cash per unit.
• Winstar Resources Ltd. (WIX). The oil and natural gas producer on Wednesday reported third-quarter EPS of 2 cents.
• YM BioSciences Inc. (YM). The company on Wednesday reported first-quarter loss of 6 cents, on revenue of $700,000.

ECONOMIC CALENDER
08:30 New housing PI for Sept. Prior 0.1% Expected 0.2%

CORPORATE EVENTS
08:00 BCE Inc. (BCE). Q3 earnings conference call
08:30 Anvil Mining Ltd. (AVM). Q3 earnings conference call
08:30 Sino Forest Corp. (TRE). Q3 earnings conference call
10:00 Boralex Inc (BLX). Q3 earnings conference call
10:00 Denison Mines Corp. (DML). Q3 earnings conference call
10:00 Gammon Gold Inc. (GAM). Q3 earnings conference call
10:00 Lake Shore Gold Corp. (LSG). Q3 earnings conference call
10:00 Northcore Technologies Inc. (NTI). Q3 earnings conference call
11:00 Connacher Oil and Gas Ltd. (CLL). Q3 earnings conference call
11:00 Petrobank Energy and Resources Ltd. (PBG). Q3 earnings conference call
11:00 Peyto Energy Trust (PEY_u). Q3 earnings conference call
11:00 Vecima Networks Inc. (VCM). Q1 earnings conference call
13:00 EnCana Corp. (ECA). Q3 earnings conference call
13:30 Endeavour Silver Corp. (EDR). Q3 earnings conference call
14:00 Eastern Platinum Ltd. (ELR). Q3 earnings conference call
14:00 GLV Inc. (GLVa). Q2 earnings conference call
16:30 OccuLogix Inc. (TLB). Q3 earnings conference call
17:00 Carmanah Technologies Corp. (CMH). Q3 earnings conference call
17:00 Great Canadian Gaming Corp. (GC). Q3 earnings conference call
17:00 Linamar Corp. (LNR). Q3 earnings conference call
17:00 Westport Innovations Inc. (WPT). Q2 earnings conference call

ANALYST RECOMMENDATIONS
• Black Diamond Income Fund (BDI_u). rating cut to outperform from strong buy at Raymond James
• Primaris REIT (PMZ_u) rating raised to outperform from market perform; target price raised to $16.75 from $14 at Raymond James

EXDIVIDEND
• Corus Entertainment Inc. (CJRb). Amount US$0.048
• Enghouse Systems Ltd. (ESL). Amount $0.03
• Genworth MI Canada Inc. (MIC). Amount $0.22
• Home Capital Group Inc. (HCG). Amount $0.16
• S Split Corp. (SBN). Amount $0.0502
• ShawCor Ltd. (SCLa). Amount $0.07
• TVA Group Inc. (TVAb). Amount $0.05

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

Can recovery and credit crunch coexist?

New studies from the Federal Reserve and European Central Bank show that, whatever else, a recovery in the economy is not being supported by a resumption in bank lending, raising concerns about how exactly growth will become self-sustaining when official stimulus ebbs.
The ECB last week released its loan survey showing banks tightened credit yet again for businesses and consumers, though at a less severe rate than in the previous quarter. Much was made of the fact that banks said they expected to ease terms to businesses, but not individuals, slightly in the last three months of the year.
Days later the Fed was out with its own survey, and again the news is getting worse more slowly, which must mean it is time to pop open the tap water. Banks are tightening terms and conditions to large firms, though fewer are doing so than before. Of course we should be thankful for small mercies, but the fact remains that this is a relative rather than an absolute survey, which means that even if fewer are being tougher the vast majority are being just as tight with money as they were three months ago when things were very tight indeed.
But wait, I can almost hear you ask, banks are making money again. If not making loans, what are they doing with it? Funny you should ask, they are lending it to the government. According to Fed data October marked the first time in years that banks held the same amount in Treasuries and Fannie Mae and Freddie Mac bonds as they did in commercial and industrial loans. Business loans have plunged 18 percent in a year, while Treasury and agency bonds are up 8 percent.
Banks are choosing to lend to the government and to government-backstopped mortgage firms because they see it as the best way to survive: hunker down, take fewer risks and content yourself with the thin gruel and thin margins of taking deposits and lending to the entity insuring those deposits. It's a good way to get solvent but it will take a terribly long time.
Falling demand for credit is a factor too. Firms are concentrating on expanding margins by cutting back on costs, rather than positioning themselves for an upswing in demand. That means they want fewer loans to support capital expenditure. It also sadly means that they are not yet hiring.

OF JOB GROWTH AND SMALL FIRMS
The question becomes will the loans be there when companies do decide that it is time to tool up and hire again. There can be no certainty. Banks are still in pretty poor shape, more will fail and few look likely to expand.
If you believed in markets you would believe that this is simply setting the stage for new entrants to come in and make loans that the banks won't. I'd like to believe this, but here we run into one of the terrible side effects of too-big and too-connected to fail. Who on earth wants to set themselves up in competition with government-backed firms? Some will do extremely well in making loans opportunistically to commercial real estate and industry over the next two years, but fewer than would be the case if there was a truly level playing field.
Two groups are doing reasonably well, but only because they don't have to rely on bank credit: large credit-worthy borrowers and house buyers. Fannie and Freddie are still cranking out mortgages, and loans backed by the Federal Housing Authority have boomed. Rates are low, and though fees are high and terms tighter it has to be said that the decision to officially support the housing market by tax breaks and subsidized lending is making a difference. It may not be good policy, but it is effective poor policy.
Small firms seem to be getting particularly tough treatment; the Fed survey shows that terms, conditions, pricing and availability were all deteriorating more rapidly for the small than the large and medium-sized companies. Annaly Capital points out that while middle market firms paid only a slight premium in the loans market in 2007 and 2008, the difference between benchmark loans and middle market is now almost 6 full percentage points, meaning they pay nearly double.
A prepackaged bankruptcy for CIT Group and a chastened GE Capital will not improve things.
Two possibilities suggest themselves for how things play out. Banks may get their balance sheets in order and begin to lend again in force next year, meeting a need for investment as economic growth takes root, if indeed it does.
If demand rises and banks can't meet it, look for more official arm-twisting, more ritual abasement by bankers called before Congress and, ultimately, more official interference in the process, probably in the form of insurance or even mandates.

--- James Saft, a Reuters columnist. The opinions expressed are his own
At the time of publication James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund.

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.

Nov 11, 2009

WEDNESDAY, NOVEMBER 11, 2009, CANADIAN EDITION

TOP STORIES
• Pan American Q3 profit up, meets consensus
• IESI-BFC says to merge with Waste Services
• Intact Financial swings to Q3 loss
• AIG's Benmosche threatened to leave - report
• United Tech ready to buy GE unit - report

BEFORE THE BELL
Toronto’s main stock index could open higher on Wednesday on stronger commodity prices. Bond markets and government offices are closed for Remembrance Day in Canada and Veterans Day in U.S. Wall Street is also poised for a higher open following a series of statements from Fed officials' on economic outlook, indicating easy monetary policy will remain intact well into next year. European shares were higher, led by financials after better-than-expected results from French bank Credit Agricole. Asian stocks rose for a consecutive fourth-day, after data showed Chinese factory output growth surged to a 19-month high in October. Gold rose to hit a new record high of US$1,117.95 an ounce. Oil rose slightly to trade firmly above US$79.

COMPANIES REPORTING RESULTS
• Atrium Innovations Inc. (ATB). Expected to report Q3 earnings of 40 U.S. cents a share, according to ThomsonReuters I/B/E/S
• CAE Inc. (CAE). Expected to report Q2 earnings of 15 cents a share
• Lake Shore Gold Corp. (LSG). Expected to report Q3 earnings of 1 cent a share
• Onex Corp. (OCX). Expected to report Q3 loss of 3 cents a share
• Peyto Energy Trust (PEy_u). Expected to report Q3 earnings of 15 cents a share
• Shoppers Drug Mart Corp. (SC). Expected to report Q3 earnings of 80 cents a share
• Uni-Select (UNS). Expected to report Q3 earnings of 65 cents a share

STOCKS TO WATCH THIS MORNING
• AEterna Zentaris Inc. (AEZ). The biopharmaceutical company on Wednesday reported third-quarter loss of 19 U.S. cents a share, on revenue of US$8.6 million.
• Algonquin Power and Utilities Corp. (AQN). The company said on Tuesday it agreed with U.S. Integrys Energy Services Inc to buy certain power generation assets in New Brunswick and Maine.
• Allied Properties Real Estate Investment Trust (AP_u). The company on Tuesday reported third-quarter adjusted FFO of 43 cents per share.
• Atrium Innovations Inc. (ATB). The company on Tuesday reported third-quarter EPS of 40 U.S. cents, on revenue of USD$81.4 million.
• Barrick Gold Corp. (ABX). The world's biggest gold producer sees the potential for record margins in the fourth quarter as gold prices hit new peaks and costs are stable or lower, its CFO, Jamie Sokalsky, said on Wednesday.
• Bell Aliant Regional Communications Income Fund (BA_u). The company on Tuesday reported third-quarter operating revenue of $786 million. The company also expects full year operating revenue of $3.14 billion to $3.24 billion.
• Bennett Environmental Inc. (BEV). The company reported on Tuesday a third-quarter profit, compared to loss a year ago, on improved soil treatment business and better cost management.
• Canadian Royalties (CZZ). Jien Canada said more than 70 percent of shares and 76 percent of debentures of Canadian Royalties have been tendered so far in response to its offer, and extended expiry of its offer until Nov. 24.
• Celeste Copper Corp. (C). The junior natural resource company on Wednesday appointed Craig Cochrane as CFO.
• Cyberplex Inc. (CX). The provider of web advertising solutions reported on Tuesday third-quarter EPS of 1 cent, on revenue of $28.2 million, which rose 156 percent.
• Essential Energy Services Trust (ESN_u). The company reported on Tuesday third-quarter revenue of $23.4 million.
• Etrion Corp. (ETX). The company on Wednesday reported third quarter loss of 32 U.S. cents a share.
• Finning International Inc. (FTT). The world's largest Caterpillar equipment dealer said on Tuesday its third-quarter profit fell 66 percent due to softer than expected sales in Canada and Britain.
• First Quantum Minerals (FM). The copper and gold miner said on Tuesday its third-quarter profit fell 16 percent, hurt by weaker copper prices and a US$40.4 million hedging loss.
• Gazit America Inc. (GAA). The company reported on Tuesday a third-quarter EPS of 12 cents, on rental revenue of $334,000.
• GeneNews Ltd. (GEN). The molecular diagnostic company on Wednesday reported third-quarter loss of 2 cents a share.
• Gold Wheaton Gold Corp. (GLW). The company on Tuesday broke even in its third-quarter, and sold US$6.8 million worth of precious metals.
• IESI BFC Ltd. (BIN). The company and Waste Services will merge to form North America's third largest solid Waste management company with annual revenues of nearly US$1.5 billion. The company expects deal to be accretive to earnings and free cash flow per share in the first year. The company also said Keith Carrigan will become CEO of the combined company following completion of the transaction.
• Intact Financial Corp. (IFC). The home and auto insurer on Wednesday swung to a third-quarter net loss, hurt by weak underwriting results and an accounting loss.
• Kinross Gold (K). The company said on Tuesday it has received authorization from the government of Ecuador to restart development of its Fruta del Norte gold project, which it put on hold last year when the country froze mining activity.
• Martinrea International Inc. (MRE). The auto parts maker reported a smaller third-quarter profit on Tuesday due to lower volumes, but said its most difficult days were behind it and that production levels in the auto sector had begun to pick up.
• MI Developments Inc. (MIMa). The company on Tuesday reported third-quarter FFO of 83 cents, on revenue of $57 million. The company also set a dividend of 15 cents a share.
• Paladin Labs Inc. (PLB). The speciality pharmaceutical company on Wednesday reported third-quarter EPS of 13 cents, on revenue of $28.4 million, which rose 28 percent. The company also said Biologics and Genetic Therapies Directorate of Health Canada had approved Glucagen, which it plans to bring it to Canadian market in first half of 2010.
• Pan American Silver (PAA). The silver miner saw third-quarter profit almost triple as the expansion of two mines boosted silver and gold production.
• Primaris Retail Real Estate Investment Trust (PMZ_u). The company reported on Tuesday third-quarter FFO of 30 cents per unit.
• Softchoice Corp. (SO). The technology services provider posted a third-quarter profit on Tuesday, helped by lower expenses and an unrealized foreign exchange gain due to the appreciation of the Canadian dollar.
• Timminco Ltd. (TIM). The company reported a deeper third-quarter loss on Tuesday on the back of a continued slump in demand from the solar energy industry.
• Transition Therapeutics Inc. (TTH). The biopharmaceutical company reported on Tuesday first-quarter loss of 24 cents per share, on revenue of $304,436.
• Wenzel Downhole Tools Ltd. (WZL). The company on Wednesday reported third-quarter loss of 3 cents a share, on revenue $9 million.
• West Energy Ltd. (WTL). The company on Tuesday reported third-quarter loss of 5 cents per share.

CORPORATE EVENTS
09:00 First Quantum Minerals Ltd. (FM). Q3 earnings conference call
09:00 Primaris Retail Real Estate Investment Trust (PMZ_u). Q3 earnings conference call
10:00 Aeterna Zentaris Inc. (AEZ). Q3 earnings conference call
10:00 CML Healthcare Income Fund (CLC_u). Q3 earnings conference call
10:00 Intact Financial Corp. (IFC). Q3 earnings conference call
10:00 Intertape Polymer Group Inc. (ITP). Q3 earnings conference call
10:30 Atrium Innovations Inc. (ATB). Q3 earnings conference call
11:30 Pan American Silver Corp. (PAA). Q3 earnings conference call
13:00 CAE Inc. (CAE). Q2 earnings conference call
14:00 Uni-Select (UNS). Q3 earnings conference call
15:30 Shoppers Drug Mart Corp. (SC). Q3 earnings conference call
16:30 Onex Corp. (OCX). Q3 earnings conference call

ANALYST RECOMMENDATIONS
• Crew Energy (CR) price target raised to $10.50 from $9.25; rating market perform at Raymond James
• Crocotta Energy (CTA) price target cut to $1.40 from $1.50; rating outperform at Raymond James
• Easyhome Ltd (EH) price target cut to $12 from $16; rating outperform at Raymond James
• Ensign Energy (ESI) rating cut to neutral from outperform at Macquarie
• Fortress Paper (FTP) price target raised to $12.50 from $10; rating outperform at Raymond James
• Trican Well Service (TCW) price target raised to $12 from $11; rating underperform at Raymond James

INSIGHT

Why is Oracle fighting so hard for Sun's MySQL?

Oracle Corp has allowed regulatory approval of its US$7 billion acquisition of Sun Microsystems Inc to drag on for months due to controversy over a database that most users get for free.
Sun's MySQL database, while minuscule in revenue terms, is important to Oracle because it can help the company expand into new markets and improve its competitive edge against arch-rival Microsoft Corp, analysts say.
MySQL's customer base comprises small- and mid-sized companies that use its technology to run websites and store business data. Oracle's database has traditionally been weak in these markets, focused instead on large corporations.
"Oracle's install base represents the Old World -- the existing enterprise application space. There is a whole New World that Oracle hasn't been able to capture," said Marten Mickos, a former chief executive of MySQL.
MySQL is one of several assets that Oracle will gain with its acquisition of Sun, but it is the only one that antitrust regulators have singled out for scrutiny.
While U.S. authorities have approved the deal, European Union antitrust regulators issued a statement of objections on Monday, saying it would hurt competition in the US$19 billion-a-year database market if No. 1 player Oracle gained control of MySQL.
Such concerns have held up the Sun deal for months and resulted in what Oracle CEO Larry Ellison has said are hundreds of millions of dollars in related losses.
Oracle has refused to compromise on MySQL, an asset that analysts say will help the world's No. 2 business software maker expand into new markets. Google, Amazon, Facebook and several travel agents are among the Web giants that use MySQL to run their websites, a market Oracle has had a tough time cracking.

A ONE-STOP SHOP
MySQL, an open-source software product that is available via Internet download, is the only such database from a major company that is available at no cost. Sun makes money by charging customers for versions with extra bells and whistles. It also offers services such as updates and bug fixes.
Since most customers do not pay for the product, market research firm Gartner Inc ranks MySQL as the 15th-largest database maker by sales. MySQL generated revenue of US$9 million last year and had a market share that was below 1 percent.
Oracle, by comparison, held about 49 percent of the database market by sales, bringing in revenue of US$9.2 billion. IBM came in second with 22 percent of the market, and Microsoft ranked third at 17 percent.
Acquiring MySQL will enable Oracle to offer a one-stop shop for data customers. MySQL would compete with Microsoft Corp's SQL Server on the low end, while Oracle's existing flagship database would go up against products from Microsoft and IBM in the the mid-to-high range of the market.
"If Oracle doesn't control MySQL, it's a potential threat to them. They need MySQL to secure the perimeter of the low-end of the market," said ITIC analyst Laura DiDio.
Analysts are betting that Oracle will likely heavily promote MySQL against Microsoft's SQL Server, even if small businesses don't pay for the product, in a bid to discourage them from buying Microsoft's products.
Oracle's strategy would allow Oracle to get its foot in the door at small companies, setting the stage for them to buy big-ticket products as the customer gets bigger, they said.
Investors expect Oracle to hold firm in its demands that the EU approve the deal, a position backed by the U.S. Department of Justice, at least until the EU makes a final decision following a formal hearing on Nov. 25.
"It seems that they will be fairly uncompromising because the U.S. DOJ agrees with them and Oracle has never been shy about fighting for something it wants," said Steve Sosnick, equity risk manager at Timber Hill.
If EU regulators block the deal, Oracle may still benefit as it would set the stage for the company to negotiate a lower purchase price for all of the rest of Sun's assets, said Jefferies & Co analyst Ross MacMillan. Other key Sun products include server computers, storage equipment, the Java computer language and Solaris operating system.
Investors are unsure as to how things will shake out. Market reaction was muted on Tuesday after the EU issued a formal statement of preliminary objections to the deal. Sun shares fell 1.1 percent to US$8.15 and options trading was mixed with strong interest in both puts and calls.
"The options market is trying to figure out when the deal will get finished and under what conditions," said Timber Hill's Sosnick.

--- Jim Finkle, 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.

Nov 10, 2009

TUESDAY, NOVEMBER 10, 2009, CANADIAN EDITION

TOP STORIES
• European Goldfields narrows Q3 loss as prices rise
• ATS Automation posts lower Q2 results
• EU opens probe into Thomson Reuters coding tool
• Pristine Power posts bigger Q3 loss
• Crocotta Energy posts Q3 loss

BEFORE THE BELL
Toronto’s main stock index could open lower on Tuesday weighed by easing commodity prices as U.S. dollar stabilized after hitting a 15-month low. Wall Street is also set for a lower start as investors pause after the market hit a 13-month high in the previous session. Markets will be closely watching for the probable release of a long-awaited draft bill on U.S. financial regulation reform, which is expected to propose consolidating bank supervision into one agency. European stocks were slightly lower, as telecom shares dipped after disappointing Vodafone results and miners fell along with metal prices, while Asian shares ended higher. Oil prices rose slightly to trade around US$79.46 a barrel.

COMPANIES REPORTING RESULTS
• Allied Properties Real Estate Investment (AP_u). Expected to report Q3 earnings of 14 cents a share, according to ThomsonReuters I/B/E/S
• Baytex EnergyTrust (BTE_u). Expected to report Q3 earnings of 37 cents a share
• Bell Aliant Regional Communitns Income Fund (BA_u). Expected to report Q3 earnings of 55 cents a share
• Crew Energy Inc. (CR). Expected to report Q3 loss of 10 cents a share
• Endeavour Silver Corp. (EDR). Expected to report Q3 loss of 3 U.S. cents a share
• Finning International Inc. (FTT). Expected to report Q3 earnings of 24 cents a share
• First Quantum Minerals Ltd. (FM). Expected to report Q3 earnings of $1.86 U.S. cents a share
• Martinrea International Inc. (MRE). Expected to report Q3 earnings of 6 cents a share
• Pan American Silver (PAA). Expected to report Q3 earnings of 20 U.S. cents a share
• Paramount Energy Trust (PMT_u). Expected to report Q3 loss of 33 cents a share
• Primaris Retail REIT (PMZ_u). Expected to report Q3 earnings of 3 cents a share
• RONA Inc. (RON). Expected to report Q3 earnings of 40 cents a share
• Transition Therapeutics Inc. (TTH). Expected to report Q1 loss of 28 cents a share
• West Energy Ltd. (WTL). Expected to report Q3 loss of 4 cents a share

STOCKS TO WATCH THIS MORNING
• 5N Plus Inc. (VNP). The producer of high-purity metals and compound for electronic applications on Monday appointed David Langlois as CFO, effective November 23.
• Angle Energy Inc. (NGL). The oil and gas explorer on Monday reported third-quarter loss of 4 cents per share.
• ATS Automation Tooling Systems Inc. (ATA). The manufacturing and industrial equipment maker on Tuesday posted lower second-quarter results, hurt by lower order bookings at its automation systems group and a drop in average selling prices at its Photowatt France unit.
• Cineplex Galaxy Income Fund (CGX_u). The company reported third-quarter revenue of $257.5 million and distributable cash of 67 cents per unit.
• Com Dev International (CDV). The satellite technology company on Tuesday said said it signed a seven year agreement with non-government entity to provide selected space-based Automatic Identification System.
• Crocotta Energy Inc. (CTA). The oil and natural gas company on Tuesday posted a third-quarter loss as lower commodity prices weighed on results.
• Easyhome Ltd. (EH). The merchandise company on Monday reported third-quarter EPS of 8 cents, before items.
• European Goldfields Ltd. (EGU). The company, which mines metals in Greece, posted a narrower third-quarter loss on Tuesday due to a rise in metals prices.
• Flint Energy Services Ltd. (FES). The oilfield services company on Monday reported a better-than-expected third-quarter profit as it was able to put a lid on expenses.
• Fortress Paper Ltd. (FTP). The producer of security and specialty papers on Monday posted a 52 percent rise in third-quarter profit that beat expectations, helped by higher margin security paper sales at its Landqart mill and continued strong performance at its Dresden mill.
• Franco Nevada (FNV). The resource royalty company said on Monday its third-quarter profit rose by 24 percent as a US$4.5 million derivatives gain more than offset the impact of lower royalty revenues.
• Guardian Capital Group Ltd. (GCG). The company on Monday reported third-quarter EPS of 10 cents.
• Intermap Technologies Corp. (IMP). The company on Monday reported third-quarter loss of 8 U.S. cents per share, on revenue of US$10.4 million.
• Jaguar Mining Inc. (JAG). The miner reported third-quarter EPS of 9 U.S. cents, on revenue of US$35.2 million.
• Olympus Pacific Minerals Inc. (OYM). The company on Tuesday said it merged with Zedex to expand gold production and exploration assets in South East Asia. The company said Zedex shareholders will receive 1 new Olympus share for every 2.4 Zedex shares.
• Opta Minerals Inc. (OPM). The provider of industrial mineral products on Monday reported third-quarter loss of 36 U.S. cents per share.
• Paramount Energy Trust (PMT_u). The energy firm on Monday reported third-quarter net loss of 36 cents a unit.
• Premium Brands Holdings Corp. (PBH). The food products maker on Tuesday reported third-quarter earnings of 39 cents a share, on revenue of $123.4 million and said it does not expect to incur any substantial current income tax expense in the near future.
• Pristine Power Inc. (PPX). The company, which owns and operates independent power plants, on Tuesday, posted a wider third-quarter loss, hurt by a 26 percent spike in expenses.
• Response Biomedical Corp. (RBM). The company on Tuesday reported third-quarter loss of 1 cent a share, on revenue of $2.05 million.
• Seacliff Construction Corp. (SDC). The company on Monday posted a 22 percent fall in third-quarter profit as total work on hand declined, partly due to schedule delays on government-funded stimulus work.
• Silver Wheaton Corp. (SLW). The company on Monday reported third-quarter EPS of 11 U.S. cents.
• Silvercorp Metals Inc. (SVM). The company on Monday reported second-quarter EPS of 6 U.S. cents, on revenue of US$25.1 million.
• Solium Capital Inc. (SUM). The company on Monday reported third-quarter revenue of $5 million.
• TransCanada Corp. (TRP). Aker Solutions ASA said on Tuesday it will proceed with construction of a 900 megawatt gas-fired power plant for TransCanada. The contract value to Aker Solutions is about $400 million and the company expects to invest about $1.2 billion in natural.
• Trican Well Service Ltd. (TCW). The company on Monday reported third-quarter loss of 6 cents a share.

CORPORATE EVENTS
10:00 Cineplex Galaxy Income Fund. (CGX_u). Q3 earnings conference call
10:00 European Goldfields Ltd. (EGU). Q3 earnings conference call
10:00 Franco Nevada Corp. (FNV). Q3 earnings conference call
10:00 Semafo Inc. (SMF). Q3 earnings conference call
11:00 Flint Energy Services Ltd. (FES). Q3 earnings conference call
11:00 Harvest Energy Trust. (HTE). Q3 earnings conference call
11:00 Pengrowth Energy Trust. (PGH). Q3 earnings conference call
11:00 Polaris Minerals Corp. (PLS). Q3 earnings conference call
11:00 Paramount Energy Trust. (PMT_u). Q3 earnings conference call
11:00 Rona Inc. (RON). Q3 earnings conference call
11:00 Silver Wheaton Corp. (SLW). Q3 earnings conference call
11:00 Trican Well Service Ltd. (TCW). Q3 earnings conference call
12:00 Silvercorp Metals Inc. (SVM). Q2 earnings conference call
15:00 Axia NetMedia Corp. (AXX). Q1 earnings conference call
16:00 Easyhome Ltd. (EH). Q3 earnings conference call
16:00 Minefinders Corp. Ltd. (MFN). Q3 earnings conference call
16:30 Transition Therapeutics Inc. (TTH). Q1 earnings conference call
17:00 Mad Catz Interactive Inc. (MCZ). Q2 earnings conference call
17:30 Finning International Inc. (FTT). Q3 earnings conference call
19:00 Liquor Stores Income Fund. (LIQ_u). Q3 earnings conference call

ANALYST RECOMMENDATIONS
• First Capital (FCR) price target raised to $21.50 from $20; rating outperform at Raymond James. Price target raised to $22 from $21; rating outperform at Macquarie
• Ivanhoe Energy (IE) rating raised to outperform from market perform at Raymond James

EXDIVIDEND
• Accord Financial Corp. (ACD). Amount $0.065
• Indigo Books & Music Inc. (IDG). Amount $0.10
• Oppenheimer Holdings Inc. (OPY). Amount USD$0.11
• PFB Corp. (PFB). Amount $0.06
• Shaw Communications (SJR). Amount USD$0.0607
• Sprott Inc. (SII). Amount $0.025
• TMX Group Inc. (X). Amount $0.38

INSIGHT

Reuters Health Summit
Health companies expect relief in Senate

Health insurers, drugmakers and other companies expect U.S. Senate lawmakers to soften health reform legislation narrowly passed by the House of Representatives that calls for a greater government role in the industry.
Pharmaceutical and insurance sector stocks rose with the overall market on Monday, up about 2 percent following the approval of the House bill late Saturday that includes a public insurance option and a government role in drug prices under the Medicare insurance program.
Company executives and investors took the House vote in stride, with expectations growing that a final measure could be delayed until next year.
"We feel much more encouraged by what's developing in the Senate," Eli Lilly and Co Chief Executive John Lechleiter told the Reuters Health Summit in New York.
With the House bill out of the way, attention has shifted to the Senate and whether Democrats can stay united and make good on President Barack Obama's pledge to overhaul the nation's US$2.5 trillion healthcare system and expand coverage.
If it passes, the plan would bring about the biggest industry changes to the United States since the Medicare insurance program for the elderly and disabled was created more than 40 years ago.
Senate Democratic leaders need every vote -- they control 60 of the legislature's 100 seats -- but face opposition from more moderate members who oppose a government-run insurance program as proposed by the House.
Industry has blasted the House bill and vowed to fight for changes.
Angela Braly, CEO of insurer Wellpoint, said the House had been widely expected to pass a bill with a public plan option -- but she now sees a battle ahead in the Senate.
"I do think there is an expectation that the process in the Senate will be a fulsome one and there will be a great discussion about the true impact of these reforms," she said at the Reuters summit.
Drugmakers are also looking for major changes in the Senate.
"We are still hopeful that before the curtain comes down on health care reform, the Senate will seriously consider the impact any final legislation will have on U.S. jobs and innovation," said Pharmaceutical Research and Manufacturers of America Senior Vice President Ken Johnson.
Still, if House Democrats are successful in pressing their case, insurers could see their margins squeezed.
"If they can put through some kind of public option where they can drive down prices (or) control prices that would obviously cut into the profit margins of certain firms," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co.
Morgan Stanley pharmaceutical analyst Andrew Baum said the Senate is unlikely to pass any bill with an "unbridled public plan" that could deflate prices.
"Any eventual healthcare reform is likely relatively benign to the pharmaceutical part of the healthcare value chain," Baum said in a note to clients.

HEADING INTO 2010
Obama wants health reform to pass this year, and Democrats are counting on a legislative victory to help them stave off Republicans gains in the 2010 mid-term elections. Democrats currently control both houses of Congress.
"We have long anticipated that Obama was willing to sign virtually any version of health reform that he could spin as a victory and that he would have to intervene to get liberal members to compromise on cornerstone issues," Kim Monk, a healthcare analyst at Capital Alpha Partners in Washington, said in a research note.
Monk and a growing number of analysts see cracks that could push any final measure until early next year, possibly as far as February or March.
Even if the Senate passes its bill by the end of this year, lawmakers must negotiate to merge it with the House version before Obama could sign a final measure into law.
"While we still believe there is a good possibility that reform passes in 2009, the Senate is going to have to move quickly," Capitol Street analyst Ipsita Smolinski said, adding there is 20 percent chance reform could slip to next year.
Shares of insurers close up 2 percent Monday on both the Morgan Stanley Healthcare Payor and the S&P Managed Health Care indexes. Pharmaceutical companies rose 1.9 percent on the NYSE Arca Pharmaceutical stock index.
The broader market as measured by the S&P 500 closed up 2.2 percent.

--- Susan Heavey and Ben Hirschler, Reuters
For more on Reuters Health Summit, click here

Nov 9, 2009

MONDAY, NOVEMBER 9, 2009, CANADIAN EDITION

TOP STORIES
• CGI Group Q4 profit beats estimates
• Ensign Energy Q3 profit sinks 77 pct
• First Capital Realty posts adj FFO of 36 cents/shr
• Cadbury awaits Kraft bid deadline
• Dish Networks profit falls, sets special dividend

BEFORE THE BELL
Toronto’s main stock index could open higher on Monday buoyed by higher crude and metal prices. On the macro front, housing starts for October is expected at 158,000 units, according to a Reuters poll. Wall Street is also set for a positive open, after the Group of 20 pledged to keep economic stimulus in place until after a recovery was assured. European and Asian markets rose, lifted by commodity and financial stocks. Oil was up more than US$1 towards US$79 a barrel after Hurricane Ida forced the U.S. oil and gas facilities to shut. Gold hit a record high above US$1,100 an ounce as the dollar index slid 1 percent on expectations U.S. interest rates will remain low.

COMPANIES REPORTING RESULTS
• Axia NetMedia Corp. (AXX). Expected to report Q1 earnings of 2 cents a share, according to ThomsonReuter estimates I/B/E/S
• Easyhome Ltd. (EH). Expected to report Q3 earnings of 25 cents a share
• Flint Energy Services Ltd. (FES). Expected to report Q3 earnings of 19 cents a share
• Franco-Nevada Corp. (FNV). Expected to report Q3 earnings of 8 U.S. cents a share
• Great Basin Gold (GBG). Expected to report Q3 loss of 2.5 cents a share
• Harvest Energy Trust (HTE_u). Expected to report Q3 loss of 17 cents a share
• Intermap Technologies Corp. (IMP). Expected to report Q3 loss of 2 U.S. cents a share
• Minefinders Corp Ltd. (MFL). Expected to report Q3 earnings of 1 U.S. cent a share
• Quadra Mining Ltd. (QUA). Expected to report Q3 earnings of 8 U.S. cents a share
• Semafo Inc. (SMF). Expected to report Q3 earnings of 6 U.S. cents a share
• Silver Wheaton Corp. (SLW). Expected to report Q3 earnings of 12 U.S. cents a share
• Silvercorp Metals Inc. (SVM). Expected to report Q2 earnings of 4 U.S. cents a share
• Trican Well Service Ltd. (TCW). Expected to report Q3 loss of 4 cents a share

STOCKS TO WATCH THIS MORNING
• Angiotech Pharmaceuticals Inc. (ANP). The Vancouver-based company on Monday reported a much smaller third-quarter loss than a year earlier, when the medical device company booked a huge writedown of goodwill.
• CGI Group Inc. (GIBa). The outsourcing company on Monday reported a fourth-quarter profit that beat market estimates helped by new contracts. The company said it earned $82.6 million, or 27 cents a share, compared with $75.3 million, or 24 cents a share, a year earlier.
• Day4 Energy Inc. (DFE). The solar energy company reported on Monday a third-quarter loss of 12 cents a share, on revenue of $13.3 million.
• Ensign Energy Services Inc. (ESI). The oil field services company said on Monday its third-quarter profit fell 77 percent, hurt by reduced drilling activity levels and the weak global economy.
• First Capital Realty Inc. (FCR). The developer of shopping centers on Monday reported third-quarter adjusted funds from operations of 36 cents a share, on property rental revenue of $108.8 million. The company forecast full year adjusted FFO of $1.46 to $1.48 a share.
• Goldsource Mines Inc. (GXS). The company on Monday said Border coal resource is estimated at 63.5 million indicated tonnes plus 89.6 million inferred tonnes and 18.7 million speculative tonnes.
• Groupe Aeroplan Inc. (AER). The company said on Monday it appointed David Johnston as president and CEO of its European unit.
• Talisman Energy Inc. (TLM). The independent oil explorer has found light crude in an exploration bloc in northern Peru, President Alan Garcia said on Saturday, days after he announced a large natural gas find in an Amazon region.
• Thompson Creek Metals Co. Inc. (TCM). The molybdenum producer plans to increase molybdenum production in 2010 in response to signs that improved demand, especially from steel producers, will boost next year's sales, its CEO Kevin Loughrey said on Friday.

ECONOMIC CALENDER
08:15 08:15 Housing starts-units for Oct. Prior 150,100 Expected 158,000

CORPORATE EVENTS
09:00 CGI Group Inc. (GIBa). Q4 earnings conference call
09:00 Great Basin Gold Ltd. (GBG). Q3 earnings conference call
11:00 Whiterock Real Estate Investment Trust (WRK_u). Q3 earnings conference call
11:00 Quest Capital Corp. (QC). Q3 earnings conference call
11:00 Angiotech Pharmaceuticals Inc. (ANP). Q3 earnings conference call
11:00 Parkland Income Fund (PKI_u). Q3 earnings conference call
13:00 First Capital Realty Inc. (FCR). Q3 earnings conference call
16:00 Ensign Energy Services Inc. (ESI). Q3 earnings conference call
14:30 Quadra Mining Ltd (QUA). Q3 earnings conference call
16:30 Intermap Technologies Corp. (IMP). Q3 earnings conference call

ANALYST RECOMMENDATIONS
• Air Canada (ACb) price target raised to $6.25 from $4.50; rating buy at Genuity
• Ivanhoe Mines Ltd. (IVN) price target raised to $5.50 from $5; rating underperform at Raymond James
• Quadra Mining (QUA) price target raised to $20 from $19; rating strong buy at Raymond James
• SNC-Lavalin (SNC) price target raised to $55 from $47; rating raised to outperform from market perform at Raymond James
• Suncor Energy Inc. (SU) price target cut to $45 from $49; rating overweight at Barclays
• Telus Corp. (T) price target cut to $39 from $40; rating buy at Genuity

EXDIVIDEND
• Cogeco Cable Inc. (CCA). Amount $0.14
• Cogeco Inc. (CGO) . Amount $0.10
• Goldcorp (G). Amount USD$0.015
• McGraw-Hill Ryerson Ltd. (MHR). Amount $0.255

INSIGHT

Can Kraft CEO pass on Cadbury chocolate?

Can Kraft Foods Inc Chief Executive Officer Irene Rosenfeld survive without a chocolate fix?
Two months after Kraft publicly declared its proposed bid for Cadbury Plc -- now worth about US$16.36 billion -- Rosenfeld faces a Monday deadline to decide whether to proceed with a formal offer or walk away for at least six months.
Deal watchers expect Rosenfeld to keep her hand in the game. But they question how much she can risk in her pursuit of the British chocolatier, either by making her bid too sweet or by losing a chance to dominate a faster-growing market.
"Irene Rosenfeld's credibility as Kraft's CEO is at risk if the deal doesn't go through, given that it has been played out so publicly," said analyst Warren Ackerman at brokerage Evolution Securities.
Rosenfeld, ranked as the second-most powerful American businesswoman by Fortune magazine, has increased investment in Kraft's marketing and product development during her three years as CEO. She has tried to overhaul a corporate culture that often had businesses operating in silos rather than as one team.
But Cadbury would be by far her biggest deal to swallow, after buying Danone SA's biscuits and cereal business for US$7.82 billion in 2007.
"Obviously, Kraft needs Cadbury a lot more than Cadbury needs Kraft," said Lee Linthicum, global packaged food research manager at Euromonitor International.
Just this week, Kraft disappointed investors with quarterly revenue that fell short of expectations and took down its annual sales growth forecast -- living up to the moniker of "low-growth conglomerate" slung at the company by Cadbury Chairman Roger Carr.
Rosenfeld is expected to formalize her initial cash-and- stock offer for Cadbury, originally worth 745 pence per share and now valued at about 722 pence per share, on Monday. People close to the deal see her sweetening that slightly down the road to engage a so far unyielding Cadbury board.
But in the absence of any rival bidders, more industry watchers question whether the deal is up to Rosenfeld to lose.
"Maybe there is an issue here, where that is how Irene is remembered, as the woman who let Cadbury get away," Linthicum said.

CADBURY'S LAST CEO STANDING?
Rosenfeld's counterpart at Cadbury, CEO Todd Stitzer, also has his own legacy at stake in defending the British icon from a takeover by what one Cadbury descendant has called "an American plastic cheese company."
"Todd would not like to be seen as the last chief executive of an independent Cadbury. He is very much a Cadbury man; if you cut him, he would bleed purple," said one source close to the CEO, referring to Cadbury's corporate color used in its packaging.
Cadbury's attraction for Kraft lies in the confection market that a combined company would lead -- and which is growing faster than core Kraft businesses like its Velveeta processed cheese, Kool-Aid drink mix and Maxwell House coffee.
Cadbury, maker of Dairy Milk chocolate, Trident gum and Halls cough drops, also gives Kraft an entry into more fast-growing emerging markets, like India.
Despite the upside, Rosenfeld must also satisfy legendary investor Warren Buffett.
The Oracle of Omaha, whose Berkshire Hathaway Inc is Kraft's largest investor, said in September that Kraft had "a lot to do" to justify the price it offered for Cadbury.
Kraft's stock is up only about 1 percent since Buffett made those comments, so Rosenfeld is still using a weak currency as part of a bid.
That has led some analysts to prefer a retreat by Rosenfeld, should the price get too high, and a renewed focus on growing Kraft's business alone.
"We'd prefer that over buying it at any cost, then destroying shareholder value by overpaying," Edward Jones analyst Matt Arnold said.

--- Brad Dorfman and David Jones, Reuters

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