Business News
May 16, 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.
TOKYO - Japan's economy grew at a stronger-than-expected 3.3 per cent annual pace in the first quarter, racking up its third consecutive quarter of growth.
Japan's gross domestic product - or the value of a country's goods and services - grew 0.8 per cent in the January-March quarter from 2007's fourth quarter, according to Cabinet Office data released Friday. That would be a 3.3 per cent annual pace.
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.
UNITED NATIONS - The world economy is "teetering on the brink" of a severe downturn and is expected to grow only 1.8 per cent in 2008, the United Nations said in its mid-year economic projections Thursday.
That's down from a global growth rate of 3.8 per cent in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1 per cent in 2009, the UN report said.
NEW YORK - Oil futures ended a whipsaw session slightly lower Thursday as the expiration of options played havoc with prices, driving crude near record high levels at times and down by more than US$3 a barrel at others. Retail gas prices in the United States, meanwhile, advanced past $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, Fla.-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 - 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 - Shares of FirstService Corp. (TSX:FSV) fell more than 10 per cent Thursday after the company reported a quarterly loss of US$12 million.
FirstService shares fell C$2.77 or roughly 12 per cent to C$19.96 in trading on the Toronto Stock Exchange as 681,000 shares traded hands. The company, which keeps its books in U.S. dollars, reported a loss of US$12 million or 40 cents per share for the quarter ended March 31, compared with a profit of $2.4 million or six cents per share a year ago.
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.
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.
MONTREAL - Dorel Inc. (TSX:DII.B) has been ordered by U.S. court to pay US$3.4 million to toy manufacturer Mattel for violating trade patents.
The ruling issued May 5 by the Delaware District Court resulted from a lawsuit initiated in 2001. Montreal-based Dorel has no plans to appeal the ruling, spokesman Rick Leckner said.
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.
