Business News
May 15, 2008TORONTO - The Canadian Auto Workers has reached tentative contract deals with General Motors of Canada (NYSE:G) and Chrysler that could mean three years of labour peace as the Big Three U.S-based automakers struggle with slumping sales and lean economies.
Like a deal with Ford (NYSE:F) already in the bag, the Chrysler and GM contract agreements in principle freeze workers wages for three years but come with improvements in other areas.
OTTAWA - Trade Minister David Emerson is telling Europeans they are missing out on a great opportunity in the future development of the North by not moving aggressively to strengthen economic ties with Canada.
Emerson told a conference on transatlantic trade Thursday that Europe and Canada have not paid close enough attention to trade and investment links, and interest is especially lacking in Europe.
TORONTO - The Toronto stock market was back in record territory Thursday afternoon with most segments positive even as investors took in data which showed that a weakening U.S. economy is hurting manufacturers.
But the TSX was off the highs of the day as energy stocks backtracked following a sharp reversal in oil prices.
NEW YORK - Oil futures gave up early gains and fell sharply Thursday, a move analysts attributed to the expiration of options and to a sharp drop in natural gas prices. Retail gas prices in the U.S., meanwhile, advanced past US$3.77 a gallon.
Options let investors bet oil prices will rise or fall in the future. Oil prices can fluctuate widely on days when options expire, analysts said. The effect may be exacerbated at the moment, when prices at historic levels have drawn more investors to speculate in options, said James Cordier, president of Tampa, Florida-based trading firms Liberty Trading Group and OptionSellers.com.
LEVIS, Que. - Desjardins Group has nearly doubled its ABCP charge after taking a $220-million first-quarter writedown of the commercial paper, raising its total to $493 million.
The writedown announced Thursday equals $150 million after income taxes and follows pre-tax charges of $116 million taken in the fourth quarter and $157 in the third quarter.
TORONTO - Canada's housing market boom is over but it won't be followed by the kind of bust that has characterized the U.S. subprime meltdown, say two real estate reports released Thursday.
Canada Mortgage and Housing Corp. forecast Thursday that new home construction in Canada will slow to 214,650 units this year, from last year's 228,343, with seven out of 10 provinces registering declines. As well, the national housing agency says sales of existing homes are expected to fall by 8.5 per cent.
WASHINGTON - A reading of U.S. homebuilders' sentiment scraped bottom in May, coming in just one point above its lowest level ever as anxiety continued to grip the industry.
The National Association of Home Builders said Thursday its housing market index came in at 19 this month, after holding steady at 20 from February through April.
WASHINGTON - Commercial banks and other financial institutions need to beef up their ability to detect and protect themselves against risks like the credit and mortgage debacles, U.S. Federal Reserve chairman Ben Bernanke said Thursday.
The trio of crises - housing, credit and financial - have exposed weaknesses in financial firms' so-called risk-management practices. That is their ability to sufficiently detect and hedge against risks. Banks and other financial players have racked up multibillion-dollar losses when investments in complex mortgage-backed securities soured with the collapse of the housing market. Credit problems in housing quickly spread to other areas, intensifying the turmoil.
BRUSSELS, Belgium - The head of the International Monetary Fund said Thursday that the worst of the global financial turbulence appears to be over but predicted the effects would be felt for some time.
IMF Managing Director Dominique Strauss-Kahn warned that tight global credit conditions may go one even though there are "good reasons to believe the worst news (is) behind us."
LEVIS, Que. - Enbridge Inc. (TSX:ENB) and Gaz Metro (TSX:GZM.UN) announced Thursday the signing of a letter of intent for Russian gas giant Gazprom to supply liquefied natural gas to the Rabaska terminal in eastern Quebec.
The U.S. subsidiary of Russian energy giant Gazprom hopes to become an equity partner in the proposed $840 million Rabaska project with the two Canadian companies and Gaz de France.
BISMARCK, N.D. - A judge has refused to stop construction of a crude-oil pipeline that would be built by TransCanada Corp. (TSX:TRP) through eastern North Dakota, saying state regulators took adequate safety precautions in deciding its route.
North Dakota's Public Service Commission did a thorough factual and legal review of its order allowing construction of the Keystone pipeline, district court judge Gail Hagerty said in her ruling Thursday.
HALIFAX - Two American private equity firms and a management group are taking over a pulp mill that employs almost 300 people in northeastern Nova Scotia - with the senior manager saying there's a plan to gradually reduce the workforce and other costs.
Northern Pulp Nova Scotia Corp. - owned by Atlas Holdings LLC of Greenwich, Conn., and Blue Wolf Capital Management LLC of New York - will assume all of the Pictou mill's assets and liabilities, including pension and environmental obligations, from Neenah Paper Ltd.
NEW YORK - Media and entertainment company CBS Corp. is buying CNet Networks Inc., an online news and information provider, for US$1.8-billion in cash in its latest bid to expand its reach on the Internet, the companies announced Thursday.
The price of $11.50 per share represents a massive premium of 45 per cent over CNet's closing stock price on Wednesday, and appears to get CNet out of a nasty battle with one of its largest shareholders, which had been agitating for a shakeup at the company after its stock slumped.
TORONTO - Coalcorp Mining Inc. (TSX:CCJ) is no longer trying to sell itself, choosing instead to focus on developing its La Francia project and increasing production to take advantage of high coal prices.
Coalcorp, headquartered in Toronto and focused on Colombia, said Thursday that after a review of strategic alternatives announced in February, "the company and its advisers believe that the inherent value of its assets is significantly in excess of any and all proposals received."
TORONTO - Investment firm Sprott Inc. (TSX:SII) has closed its $200-million initial public offering of 20 million shares and begun trading on the Toronto Stock Exchange.
The share issue - a secondary offering by current shareholders of the employee-owned firm including founder Eric Sprott - priced each share at $10.
OTTAWA - A new study says Saskatchewan and Newfoundland and Labrador have stepped into a new era of prosperity.
Statistics Canada says the commodity boom offered a unique opportunity for the two provinces to tap into their natural resources as never before.
LONDON - Cadbury PLC, the world's biggest candy maker, gave investors a pleasant surprise Thursday by forecasting target-beating sales in the first half and improving profit margins on the back of price increases and lower costs.
Cadbury shares jumped nearly four per cent after the trading statement from the maker of Dairy Milk chocolate, Trident gum and Halls cough drops, which followed the company's first board meeting since it spun off its U.S. beverage business.
OTTAWA - Manufacturers gave back some of their recent gains in March as factory sales retreated 1.6 per cent to $49 billion, their first decline of 2008.
The scope of March's slowdown was extensive as 18 of the 21 manufacturing industries, representing 76 per cent of total sales, posted declines.
