Business News
May 15, 2008TORONTO - The Big Three North American automakers have all signed on to three-year agreements with Canadian workers designed to help rescue the country's crumbling auto sector.
But one analyst says the plan ignores a key risk to the industry: growing wage disparity with U.S. workers.
OTTAWA - Surprisingly weak manufacturing output in March has left the Canadian economy teetering on the brink of the first quarterly economic contraction since 2003, economists said Thursday.
For years the soft underbelly of the Canadian economy, manufacturing sales fell 1.6 per cent in March from a month earlier, far below the market expectations of a modest 0.4 per cent slide. The retreat totally gives back February's 1.6-per-cent gain.
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 surged to a record-high close Thursday in a broadbased advance led by solid gains in financial and metals stocks even as investors took in data which showed that a weakening U.S. economy was hurting manufacturers.
The gain was all the more impressive since the energy sector played only a minor part as crude prices staged a big retreat late in the session. Lower oil prices helped boost New York markets as investors grappled with worries about factories and employment.
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.
MONTREAL - Asset-backed commercial paper weighed down the quarterly results of another Canadian financial institution as Desjardins Group took a $220 million first-quarter writedown, nearly doubling its total charges related to ABCP 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 cooling real-estate sector is slowly moving toward a more balanced market, but there won't be any bust like that seen in the U.S. following the subprime mortgage crisis, Scotiabank economist Adrienne Warren said Thursday following the release of several housing reports.
"We have been anticipating lower sales this year and more modest price increases," said Warren, senior economist at Scotia Economics, after the bank forecast overall sales 15 per cent below last year's record levels, with home prices increasing on average about five 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.
SASKATOON - Cameco Corp. (TSX:CCO) says it's ready to seek out potential acquisitions now that falling uranium spot prices have made the possibility of a purchase "more reasonable."
The world's biggest uranium miner, based in Saskatoon, said it was "unfairly criticized" for not joining the merger and acquisition frenzy sweeping the industry last year.
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.
TORONTO - Canadian investors slashed the amounted they put into mutual funds in April compared with a year ago as net contributions totalled $560.8 million, down from $2.51 billion a year ago, with the lion's share going into safe, low-yielding money market funds.
According to data compiled by the Investment Funds Institute of Canada, net money market fund sales totalled $511.9 million for April, followed by global balanced funds which saw net sales of $475.3 million.
VANCOUVER - Nevsun Resources Ltd., (TSX:NSU) says the Bisha copper, zinc, gold and silver project in Eritrea will have a pre-production capital cost of US$246 million, up $50 million from a 2006 estimate.
The Vancouver-based company said Bisha is expected to produce 747 million pounds of copper, 1.09 billion pounds of zinc, 1.06 million ounces of gold and 9.4 million ounces of silver over a 10-year mine life.
TORONTO - Menu Foods Income Fund (TSX:MEW.UN) says its pet food business is on the way to recovering from the impact of a series of major recalls, although on a smaller scale.
The pet food maker said it lost it lost $2.2 million or 10.8 cents per unit for the three months ended March 31 compared with a loss of $17.5 million or 91.8 cents per unit a year ago. Quarterly revenue was $55.6 million, down from $64.5 million.
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. - Russian energy giant Gazprom plans to enhance its North American presence by partnering with Canadian pipeline companies Enbridge Inc. (TSX:ENB) and Gaz Metro (TSX:GZM.UN) to supply the proposed Rabaska LNG terminal near Quebec City.
Gazprom's U.S. subsidiary signed a letter of intent Thursday to become an equity partner in the proposed $840 million Rabaska liquefied natural gas 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.
