TORONTO — The Toronto stock market was listless Friday as a weak U.S. manufacturing report added to the debate over whether the U.S. economic recovery has weakened to a point where the Federal Reserve will launch another round of stimulus measures.The S&P/TSX composite index gained 11.43 points to 12,073.07 while the TSX Venture Exchange gained 0.95 of a point to 1,249.13.The Canadian dollar was up 0.08 of a cent to 100.72 cents US.U.S. markets also fell back with the Dow Jones industrial average down 16.26 points to 13,041.2 after the U.S. Commerce Department said that orders for durable goods rose a seasonally adjusted 4.2 per cent in July. But excluding aircraft and other transportation goods, orders dropped 0.4 per cent. Economists had expected a 2.5 per cent rise.The Nasdaq composite index was 10.24 points lower to 3,043.16, while the S&P 500 index declined 3.27 points to 1,398.81.The durable goods data also showed that non-defence capital goods orders excluding aircraft fell by 3.4 per cent month over month in July while an annualised growth rate based on three-month periods plummeted to minus 9.3 per cent.“This strongly suggests that businesses are slashing their investment spending in response to the fiscal uncertainty and the euro-zone crisis,” said Paul Ashworth, chief U.S. economist for Capital Economics.The Fed has been in focus after minutes released Wednesday of the Federal Reserve’s last policy meeting showed bankers favoured more stimulus.But doubts about Fed intentions grew Thursday after St. Louis Federal Reserve Bank president James Bullard said the minutes from the Aug. 1 meeting were stale because the economy had picked up since then.Adding to uncertainty was Chicago Fed President Charles Evans, who said the Fed should take action to bolster the economy.Traders also opted for caution amid weak economic activity overseas as HSBC said Thursday that its manufacturing purchasing managers’ index for China fell to a nine-month low in July amid weak global demand for the country’s exports. And in Europe, the PMI of overall economic activity in the eurozone was also stuck below 50 last month, which means the economy is contracting.Commodities were mixed and the base metals component was off 0.64 per cent as copper eased one cent to US$3.48 following a 12-cent jump over the last three sessions. Capstone Mining (TSX:CS) gave back six cents to $2.50 while Teck Resources (TSX:TCK.B) lost 34 cents to $28.76.The energy sector eased 0.3 per cent even as the October crude contract on the New York Mercantile Exchange erased early losses to advance 32 cents to US$96.59 a barrel. Precision Drilling (TSX:PD) shed 14 cents to $8.20 while Cenovus Energy (TSX:CVE) lost 30 cents to $32.07.The gold sector fell 0.75 per cent while bullion gave back some of Thursday’s US$32 rise, down $1.20 to US$1,671.60 an ounce. Barrick Gold Corp. (TSX:ABX) faded 35 cents to $37.52.The financial sector led advancers with Royal Bank (TSX:RY) ahead 24 cents to $53.53.European bourses gave up ground with London’s FTSE 100 index down 0.45 per cent, Frankfurt’s DAX down 0.58 per cent and the Paris CAC 40 off 0.68 per cent.Overseas, Japan’s Nikkei 225 declined 1.2 per cent and China’s benchmark Shanghai Composite Index lost one per cent while Hong Kong’s Hang Seng shed 1.3 per cent in the wake of the HSBC PMI report.Elsewhere, South Korea’s Kospi declined 1.2 per cent and Australia’s S&P ASX 200 was off 0.8 per cent.In corporate news, South Korea’s Samsung won a home court ruling in its global smartphone battle against Apple after judges in Seoul said the company didn’t copy the look and feel of the U.S. company’s iPhone, and that Apple infringed on Samsung’s wireless technology.However, in a split decision on patents, the panel also said Samsung violated Apple technology behind the bounce-back feature when scrolling on touch screens and ordered both sides to pay limited damages.The Saputo family’s Jolina Capital is selling about half of its stake in Montreal-based TransForce Inc. (TSX:TFI) for $148.4 million, leaving Jolina with 8.4 per cent of the parcel delivery company’s common stock. Jolina, which has been the largest shareholder in TransForce, is a holding company controlled by Emanuele (Lino) Saputo, founder of the Montreal-based cheese, dairy and bakery company that bears the family name. Transforce shares lost 68 cents to $18.35.Resolute Forest Products Inc. (TSX:RFP) will restart its paper mill in Dolbeau-Mistassini, Que. The company, formerly known as AbitibiBowater, says the decision to resume operations at the mill follows approval of electricity sales from Resolute’s Mistassini cogeneration plant to Hydro-Quebec, the government-owned provincial power grid. Resolute shares were unchanged at $12.06.Eli Lilly’s potential Alzheimer’s disease treatment failed to slow mental decline in two late-stage studies, but combined data from both trials showed promising results in patients with mild-to-moderate cases of the mind-robbing disease. Its shares jumped six per cent to US$44.95.
The Toronto stock market was positive Wednesday amid disappointing news from the oil sector and rising commodity prices.The S&P/TSX composite index gained 21.29 points to 12,810.31 while the TSX Venture Exchange was up 11.26 points to 1,210.2.The Canadian dollar was down 0.05 of a cent to 99.68 cents US.U.S. indexes were slightly higher as January retail sales met expectations with the Dow Jones industrials ahead 3.99 points to 14,022.69.The Nasdaq was 7.77 points higher to 3,194.26 and the S&P 500 index gained 3.23 points to 1,522.66.U.S. retail sales ticked up 0.1 per cent last month after a 0.5 per cent rise in December. January’s increase was in line with expectations and was the smallest in three months after higher taxes cut into Americans’ wages.“However, given continued job gains through the start of this year, we are assuming that this slowing in sales will prove temporary and that greater strength will emerge going forward,” said RBC Assistant Chief Economist Paul Ferley.Talisman Energy Inc. (TSX:TLM) recorded US$367 million or 37 cents per share in quarterly net income, beating forecasts of 16 cents a share. But the gain was mainly due to disposal of some assets and the company continued to feel the effects of low natural gas prices. Talisman posted revenue of $1.6 billion, which was $300 million less than what was expected and its shares dipped two cents to $12.54.Thomson Reuters (TSX:TRI) posted US$497 million of adjusted earnings, or 60 cents per share in the latest quarter, compared with US$445 million or 54 cents per share in the fourth quarter of 2011. Net income attributable to common shareholders was US$372 million, compared with a year-earlier loss of US$2.6 billion.Thomson’s overall revenue, including discontinued operations, fell to $3.4 million from $3.6 billion, a five per cent decline. However, revenue from continuing operations was up two per cent from US$3.3 billion. Its shares were down 61 cents to C$30.11.Shares in CAE Inc. (TSX:CAE) were down 16 cents to $10.63 as the flight simulator builder said restructuring, integration and acquisition costs contributed to a reduced profit its fiscal third quarter.Montreal-based CAE says net income attributable to equity holders was $37.8 million or 15 cents per share, down from $45.6 million or 18 cents per share a year ago. Revenue for the quarter was up 15 per cent to $522.1 million.Traders are also taking in earnings during the day from Sun Life Financial (TSX:SLF) along with gold producers Kinross Gold (TSX:K) and Agnico-Eagle Mines (TSX:AEM).In the U.S., farm and construction equipment maker Deere & Co. says its first-quarter net income leaped 22 per cent to $649.7 million or $1.65 per share. Revenue rose almost 10 per cent to $7.42 billion. Analysts surveyed by FactSet had been expecting earnings of $1.39 per share on revenue of $6.73 billion and its shares lost $1.69 to $92.28.Commodity prices were mainly higher as March copper was up a penny to US$3.75 a pound and the base metals sector was up 90.6 per cent. Teck Resources (TSX:TCK.B) gained 45 cents to C$34.42.The March crude contract on the New York Mercantile Exchange rose 29 cents to US$97.80 a barrel amid falling U.S. inventories.A report late Tuesday from the American Petroleum Institute showed a drop of 2.3 million barrels in U.S. crude stockpiles last week. If confirmed by data from the Energy Department’s Energy Information Administration to be released later Wednesday, it would be the first fall in crude supplies in over a month.A survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., was expecting crude stocks to have risen by 2.5 million barrels.The energy sector climbed 0.2 per cent while Husky Energy (TSX:HSE) improved by 38 cents to C$31.28.The financials sector rose 0.25 per cent while Manulife Financial (TSX:MFC) advanced 14 cents to $15.54.The gold sector fell 0.3 per cent as April bullion on the Nymex declined $1.30 to US$1,648.3 an ounce. Eldorado Gold (TSX:ELD) shed eight cents to $10.95.African Barrick Gold PLC (LSE:ABG) swung to a big loss in the fourth quarter as a major increase in its cost of sales more than offset slightly higher revenues. The company, majority owned by Toronto-based Barrick Gold Corp. (TSX:ABX), posted a net loss of just under US$46 million or 8.5 cents per share, down from a year-earlier profit of $55.1 million. Revenue rose to US$287.9 million from US$285.2 million. Barrick Gold faded 14 cents to C$32.41.Overseas, Japan’s benchmark Nikkei index tumbled one per cent as the yen strengthened against the dollar following a pledge by finance ministers from the world’s major advanced economies to refrain from intentionally weakening their currencies.Finance ministers from the Group of Seven nations said in a statement following a meeting in Brussels that they remained committed to exchange rates driven by the market, not government or central bank policies.Traders interpreted the statement as a message directed at Japan, where the yen has plummeted against the dollar since Prime Minister Shinzo Abe took office and pushed the central bank for ultra-loose monetary policy.Australian stocks closed at their highest level since September 2008. The S&P/ASX 200 gained 0.9 per cent after the release of strong earnings from Commonwealth Bank of Australia and construction company Leighton Holdings.South Korea’s Kospi advanced 1.6 per cent. Markets in mainland China, Hong Kong, Taiwan and Vietnam were closed for Lunar New Year holidays.European bourses were positive with London’s FTSE 100 index edging up 0.16 per cent. Frankfurt’s DAX gained 0.64 per cent while the Paris CAC 40 was up 0.2 per cent.
Mining stocks led the way to a negative start to second quarter trading on the Toronto stock market Monday as data showed the American manufacturing sector expanded at a much slower than expected pace last month.The S&P/TSX composite index dropped 46.13 points to 12,703.77 as stocks also failed to find lift from other data showing an improving Chinese manufacturing sector. The Canadian dollar was down 0.08 of a cent at 98.35 cents US.U.S. indexes were also in the red after the Institute for Supply Management’s manufacturing index for March came in at 51.3. Economists had expected the widely watched index to remain unchanged from February at an 18-month high of 54.2.“This could be the first sign that the impact of U.S. government budget cuts could be impacting business/manufacturing activity,” said BMO Capital Markets senior economist Jennifer Lee. “New orders and production (think of those two components as future activity and current activity, respectively) took a sizable drop to three- and six-month lows.”But the news wasn’t all bad as the manufacturing survey also showed that “employment popped up to a nine-month high, fully erasing February’s decline.”The Dow Jones industrial average declined 36.56 points to 14,451.98, the Nasdaq composite index dropped 25.58 points to 3,241.94 and the S&P 500 index points declined 8.79 points to 1,560.4 after the index hit a record high on Friday.Other data showed that U.S. construction spending rose 1.2 per cent in February compared with January, a month that had seen construction activity drop 2.1 per cent. Spending rose to a seasonally adjusted annual rate of US$885.1 billion, 7.9 per cent higher than a year ago.Meanwhile, the China Federation of Logistics and Purchasing said Monday that the country’s manufacturing picked up in March in a potentially positive sign for the world’s second-largest economy.Its Purchasing Managers’ Index rose to 50.9 in March from 50.1 in February, which was the lowest reading in five months. Numbers above 50 denote expansion on a 100-point scale.Chinese manufacturing is closely watched as an indicator of global consumer sales and demand for commodities such as copper and oil. High demand in the past has fuelled higher share prices for energy and mining stocks on the resource-intensive TSX.However, despite the improvement in factory output, analysts said investors remained worried about a possible property bubble, inflation and what policies the new Chinese government might have in store.“Better than expected (Chinese) data six months ago would have been music to the market’s ears,” said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis. “I think right now investors are weighing any better than expected data against the potential for that to heat up property values and thus put (monetary) policy against growth in the near term.”The base metals component fell 1.75 per cent as May copper slipped four cents to US$3.36 a pound. Taseko Mines (TSX:TKO) moved down eight cents to C$2.75 while Teck Resources (TSX:TCK.B) lost 31 cents to $28.29Railway stocks fell alongside miners with Canadian Pacific Railway (TSX:CP) down $2.69 to $129.85.The gold sector lost about one per cent even as June bullion gained $1.80 to US$1,597.50 an ounce. Barrick Gold Corp. (TSX:ABX) faded 30 cents to C$29.54.Tech stocks were also weak with CGI Group (TSX:GIB.A) down 45 cents to 27.16 while smartphone maker BlackBerry (TSX:BB) gained 19 cents to $15.28.The energy sector shed early gains to move down 0.16 per cent as the May crude contract on the New York Mercantile Exchange fell $1.13 to US$96.10 a barrel. But Cenovus Energy (TSX:CVE) was up 30 cents at C$31.76.The TSX started the second-quarter trading period up a slight 2.5 per cent year to date, down from highs of mid-March when the market was ahead about 3.5 per cent, reflecting a stubbornly slow global economic recovery.In contrast, a stream of positive economic indicators, including a resurgent housing sector and continued stimulus measures from the U.S. Federal Reserve, helped power the Dow Jones industrials to a string of record-high closes, leaving the blue chip index up almost 11.25 per cent year to date.Meanwhile, Russia’s first deputy prime minister, Igor Shuvalov, says his government won’t protect Russian depositors who are losing money in Cyprus but may offer assistance to some Russian state companies.Big depositors at Cyprus’ largest bank, including some Russians, may be forced to accept losses of up to 60 per cent, far more than initially estimated under the European rescue package to save the country from bankruptcy. European markets were closed Monday.The Nikkei 225 index in Tokyo declined 2.1 per cent while South Korea’s Kospi fell 0.4 per cent.Markets in mainland China were mixed as the Shanghai Composite Index fell 0.1 per cent while the Shenzhen Composite Index rose 0.6 per cent. Markets in Australia and Hong Kong were closed for an extended Easter weekend holiday.
A surprisingly strong reading on U.S. consumer confidence helped underpin a solid gain on the Toronto stock market Tuesday.The S&P/TSX composite index ran up 86.01 points to 12,782.38 as traders also reacted to an earnings report from Scotiabank that missed expectations.The U.S. Conference Board’s consumer confidence index in the United States blew past expectations, coming in at a five-year high of 76.2, against the 72.3 reading that economists expected. The April reading was 68.1.Scotiabank’s (TSX:BNS) adjusted earnings came in a $1.24 per share, two cents short of analyst estimates, but its overall net income rose to $1.6 billion from $1.46 billion a year earlier. The profit amounted to $1.23 per share, and compared with $1.15 per share a year earlier. Scotiabank shares were off early lows, down 40 cents to $59.21.“The results were a little bit disappointing but nothing material, nothing that’s out of the ordinary for normal course quarterly behaviour,” said Kash Pashootan, vice-president and portfolio manager at First Avenue Advisory, a Raymond James company.He said the market is moving more towards a wait-and-see attitude regarding the banks, reflecting concerns about lower domestic loan growth as the Canadian real estate sector softens.“For example, you look at TD Bank results and you saw that in Canada, year over year for this year, loan growth in Canada grew by five per cent,” he said. “So it’s still growing but that momentum at which it’s growing has slowed, compared to the U.S. where it’s growing at 15 per cent.”The Canadian dollar was off 0.41 of a cent to 96.33 cents US as the greenback picked up strength following the release of the consumer confidence report and other data showing rising house prices.Traders also looked to the Bank of Canada’s next interest rate announcement, scheduled for Wednesday morning. The central bank is widely expected to keep its key rate unchanged for some time to come.U.S. indexes were sharply higher as the Dow Jones industrials jumped 187.24 points to 15,490.34, the Nasdaq composite index gained 46.37 points to 3,505.51 while the S&P 500 index was ahead 19.48 points to 1,669.08.CIBC World Markets senior economist Andrew Grantham said the U.S. consumer confidence index for May was supported by lower gasoline prices, soft inflation as well as rising home prices — which offset tax increases in January.“A firmer labour market may have also played a role, with almost 11 per cent saying jobs were plentiful (up from 9.7 per cent) and the labour differential improving,” Grantham said.Confidence also improved in Canada as the Ottawa-based Conference Board of Canada said its index rose 5.1 points to 80.7.The U.S. data will be scrutinized for how it might influence the Fed. There have been jitters on stock markets due to speculation that the U.S. central bank might scale back its aggressive bond-buying program, which is meant to stimulate the economy, due to a recent improvement in some economic indicators.Traders also took in further good news from the U.S. housing sector. The S&P/Case-Shiller home price index for March rose by 1.12 per cent, higher than the 0.9 per cent pace that had been expected. The gain translates to a 10.87 per cent year over year gain — the first double-digit increase in over six years.On the TSX, the industrials sector led advancers, up 1.55 per cent with Canadian Pacific Railway (TSX:CP) ahead $4.48 to $141.33.The financial sector was up 0.6 per cent as Royal Bank (TSX:RY) gained 70 cents to $63.96.Oil and copper prices advanced after being buffeted last week after a survey by HSBC Corp. showed a decline in China’s manufacturing for May. An official report on factory production in the world’s second-largest economy will be released later in the week.The July crude contract on the New York Mercantile Exchange was up $1.09 to US$95.24 a barrel and the energy sector was up one per cent. Canadian Natural Resources (TSX:CNQ) advanced 41 cents to $31.53.The base metals sector gained 0.8 per cent with July copper three cents higher to US$3.32 a pound. HudBay Minerals (TSX:HBM) was up 26 cents to $8.60.The gold sector erased early losses to move up 0.7 per cent while bullion prices slipped with the June contract in New York down $5.50 to US$1,381.10 an ounce. Iamgold (TSX:IMG) climbed seven cents to C$5.33.There was also acquisition activity as Domtar Corp. (TSX:UFS) said it has signed a deal to buy Associated Hygienic Products, a maker of store brand infant diapers in the United States, from DSG International for $272 million. Domtar shares improved by $1.76 to $72.41.In other earnings news, high-end jewelry company Tiffany says its first-quarter net income rose three per cent to US$83.6 million, or 65 cents per share as sales improved across all regions. Ex-items, earnings were 70 cents per share, well above the 53 cents that analyst expected. Revenue for the New York company known for its blue boxes rose 10 per cent to $895.5 million, topping Wall Street’s $855.7 million estimate and its stock was up four per cent to US$79.29.European bourses racked up strong gains as London’s FTSE 100 index ran ahead 1.66 per cent, Frankfurt’s DAX gained 1.15 per cent and the Paris CAC 40 was up 1.58 per cent.
MONTREAL — Quebec pension fund manager, the Caisse de depot, says it is buying a 26.7% stake in Australia’s Port of Brisbane, reportedly for nearly $1-billion.The institutional investor is purchasing the interest held by Global Infrastructure Partners, a New York-based private equity firm that specializes in infrastructure investments, following a bidding process launched earlier this year.The Caisse says a confidentiality agreement prevents it from disclosing the purchase price. But Bloomberg, citing sources, reported the transaction is valued at AU$1-billion ($960-million.)Macky Tall, the manager’s senior vice-president of infrastructure, called the acquisition a “first-class asset,” adding that the investment will “step up” its presence in the resilient market and diversify its portfolio.Australia’s third-largest port was privatized in 2010. It handles more than 37 tonnes of international cargo annually valued at around $50-billion. It is also the closest major container port to Australia’s largest trading market in the Asia-Pacific rim.The transaction is expected to close by Dec. 18.The port is owned by Q Port Holdings consortium, whose other members include IFM Investors, QIC Global Infrastructure, and Tawreed Investments Ltd, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.The Caisse is Canada’s second-largest pension fund manager, handling funds primarily for public and private pension and insurance plans. As at June 30, 2013, it held $185.9-billion in net assets.The Canadian Press
OTTAWA — The federal tax agency says the social insurance numbers of roughly 900 people were stolen from its systems, which were left vulnerable by the so-called Heartbleed bug.[np_storybar title=”Lessons from Heartbleed: 5 ways to protect your money” link=”https://business.financialpost.com/2014/04/12/lessons-from-heartbleed-5-ways-to-protect-your-money/”%5DThe software security flaw exposed last week has frightened us all into taking a second look at our data online. Here’s how to be vigilant on a regular basis. [/np_storybar]The Canada Revenue Agency blocked public access to its online services for several days last week until it addressed the security risk, but said Monday there was nonetheless a data breach over a six-hour period.It said it is analyzing other fragments of data that have been removed from its systems, while putting measures in place to protect those affected by the breach.“I share the concern and dismay of those individuals whose privacy has been impacted by this malicious act,” CRA commissioner Andrew Treusch said in a statement.“CRA online services are safe and secure. The CRA responded aggressively to successfully protect our systems. We have augmented our monitoring and surveillance measures, so that the security of the CRA site continues to meet the highest standards.”Everyone affected will receive a registered letter. Treusch said the agency will not be notifying individuals over the phone or by email as it wants to ensure communications “are secure and cannot be exploited by fraudsters through phishing schemes.”Special 1-800 # has been activated for those who receive registered letter from CRA. http://t.co/Lsz3u6OdHS 4/5 — Andrew Treusch (@AndrewTreusch) April 14, 2014The Heartbleed bug is caused by a flaw in OpenSSL software, which is commonly used on the Internet to provide security and privacy.The bug is affecting many global IT systems in both private and public sector organizations and has the potential to expose private data.Service was restored Sunday to all publicly accessible Government of Canada websites as well the tax-filing systems E-file and Netfile.The CRA has apologized to Canadians for the delay and inconvenience, but added it was necessary to ensure the agency’s online services were safe and secure.It said it will not apply interest or penalties to individual taxpayers filing their 2013 tax returns after April 30 for a period equal to the length of last week’s service interruption.That means 2013 tax returns filed by May 5 will not incur interest or penalties.
TORONTO – The Toronto stock market closed sharply higher Monday as investors snapped up oversold stocks for a third day in hopes a bottom is close in the sell-off that has plagued markets this month.The S&P/TSX composite index gained 110.09 points to 14,337.77 — its third straight triple-digit advance.“It was incredibly encouraging to see we got that late-week rebound (last week), which suggests that the market isn’t so fragile,” said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis, adding markets haven’t seen an end of volatility in the near term. The Canadian dollar slipped 0.06 of a cent to 88.62 cents US.U.S. markets were higher with the Dow industrials up 19.26 points to 16,399.67, held back by a 7% slide in IBM stock. The Dow heavyweight announced that its adjusted earnings were $3.68 per share while revenue totalled $22.4 billion. Analysts expected $4.32 per share on revenue of $23.39 billion. IBM also said that it will pay $1.5 billion to Globalfoundries in order to shed its costly chip division. It took a $4.7-billion charge for the third quarter as it also delivered a disappointing outlook.The Nasdaq climbed 57.63 points to 4,316.07 and the S&P 500 index rose 17.25 points to 1,904.01.The TSX found support from Valeant Pharmaceuticals International Inc. (TSX:VRX), which reported adjusted earnings of $718.8 million or $2.11 per share, 11 cents ahead of forecasts. Valeant also raised its fourth-quarter adjusted profit estimate and its 2015 revenue growth forecast and its shares rose $5.30 to C$140.74.The gold sector was the leading group as the December gold contract gained $5.70 to US$1,244.70 an ounce. The December copper contract was two cents lower at US$2.99 a pound.Rogers Communications (TSX:RCI.B) helped lift the telecom sector and its shares gained $1.39 to $43.67 as it announced that it was teaming with Netflix to deliver the original survivalist thriller series “Between.” It is Netflix’s first partnership with a Canadian broadcaster.The TSX is down about 9% from its September highs, the Dow is down 5% and the S&P 500 is off 6.5% amid worries the eurozone could slip back into recession and a global economic downgrade by the International Monetary Fund.Central banks have also figured largely in the market sentiment. The sell-off began amid concerns that have grown over the ending this month of the U.S. Federal Reserve’s key stimulus program. The Fed’s purchase of hundreds of billions of dollars of bonds has kept long-term rates low and encouraged the rally on stock markets over the last few years.The energy group was flat, with the November crude oil contract down four cents to US$82.71 a barrel. The energy sector is down 15% in the last month as demand concerns and rising supplies have sent oil down 14% over that time.The industrials sector was also flat as Canadian Pacific Railway Ltd. (TSX:CP) confirmed it held exploratory talks about a possible combination with U.S. railway CSX Corp. but those discussions ended without a deal and no further talks are planned. CP shares dropped $3.34 to C$221.65 a day before it and rival Canadian National Railway (TSX:CNR) release earnings.TOP STORIESWhy some global commodities players are shipping less Canadian crude by rail nowBlackBerry shares climb after unconfirmed report of possible Lenovo takeover bidCanada’s budget-balance target justifies top credit rating and stable outlook, says Moody’sThe world is about to find out China’s threshold for painWarren Buffett just lost $1-billion as IBM plunges most in 4 yearsWHAT’S ON DECK TUESDAYECONOMIC NEWSUNITED STATES10 a.m. Existing home sales (Sept): Economists expect 1% riseCORPORATE NEWSCANADACanadian National Railway Q3 earnings: Analysts expect $1.04 a share Canadian Pacific Railway Ltd Q3 earnings: Analysts expect $2.30 Celestica Inc Q3 earnings: Analysts expect 24¢ UNITED STATESHarley-Davidson Inc Q3 earnings: Analysts expect 59¢ The Coca-Cola Co Q3 earnings: Analysts expect 52¢ Lockheed Martin Corp Q3 earnings: Analysts expect US$2.72 Omnicom Group Inc Q3 earnings: Analysts expect 89¢ Verizon Communications Inc Q3 earnings: Analysts expect 90¢ Yahoo! Inc Q3 earnings: Analysts expect 29¢
OTTAWA — Retirement savers and pension funds should be prepared for lower investment returns than they had before the financial crisis, a report by the C.D. Howe Institute suggests.Report authors Steve Ambler and Craig Alexander project a one per cent rate of real return for risk-free investments will form an anchor for the returns on other investments including bonds and stocks.And while Alexander said that would imply a three per cent return on three-month treasury bills if the Bank of Canada maintains its two per cent inflation target — which would be well ahead of where rates are today — it would be below where it was before the financial crisis and even lower than in the 1990s.Three-month treasury bills currently earn around 0.42 per cent, however the yield on the same investment was more than four per cent as recently as 2007.Three reasons Franklin Templeton isn’t bullish on U.S. stocks — and where you should look insteadThree behaviours investors should avoid, especially in turbulent times“Today, pension managers would be thrilled with such a return on highly liquid, sovereign-grade assets, and it may seem odd discussing such a high rate at the moment,” said Alexander, a former chief economist at TD Bank.“Nevertheless, long-term investors, like pension funds, have a multi-decade investment horizon, and the analysis tells us they need to be braced for lower returns than in the past.”The report noted that an investor hoping to earn a seven per cent annual return won’t be able to do that without taking at least some risk. And with a lower risk-free rate than in the past, that means taking more risk to earn the same return.The report said the lower risk-free rate will be due, in part, to the impact of the aging population that will weigh on the rate of growth in real income per capita.With growth in real income per capita expected to average at an annual pace between 0.75 and 1.35 per cent over the next couple of decades, that means the real return on risk-free investments can only be counted on to be close to one per cent, the report said.Alexander acknowledged that the real risk-free rate today is below the pace of real per capita income growth, but said if economic theory is validated that will change.“The level of rates today are remarkably low, they are unsustainably low and ultimately there’s going to have to be a rebalancing, but when that rebalancing happens the level of rates is not going to go up to anything like we had before,” he said.“What it is telling you is that returns on a balanced diversified portfolio could be something in the range of four to six per cent and that’s probably lower than many pension funds are hoping for.”
CALGARY — Husky Energy (TSX:HSE) says it has been granted permission to repair and replace a section of pipeline that leaked 225,000 litres of crude in Saskatchewan just over a year ago.Chief executive Robert Peabody said that it will be applying lessons learned from the spill on the rebuild.“My mother used to tell me this, learn from your mistakes and don’t do it again,” Peabody told a conference call Friday to discuss Husky’s latest financial results.With the pipeline out of commission, Husky has been relying on tanker trucks to transport crude the final leg to Lloydminster, Sask., until it is repaired and permission is granted by the government to resume operations.The company said it plans to include more monitoring equipment that will measure ground movement, as well as add thicker and higher grades of steel pipe to the section of pipe that burst near the North Saskatchewan River.The spill sent about 40 per cent of the leaked crude into the waterway, forcing communities downstream to shut off a main source of water for almost two months.“There’s a lot of changes that’s going to take place there, changes to the design, changes to monitoring equipment,” Peabody said.Husky has been criticized for its slow response to the spill.The company said two leak detection systems indicated pressure anomalies at 8 p.m. on July 20, 2016, but it didn’t start shutting down the line until 6 a.m. the following morning.A government investigation found that pipeline’s alarms were warning of potential problems and continued until the line was shut down for scheduled maintenance at 7:15 a.m. on July 21.Peabody said the many variables including temperature, pressure and flow in pipelines make it hard for standard leak detection systems to know for sure when a leak has happened, as was the case in the North Saskatchewan spill.“It’s not that the systems failed, it’s just that there wasn’t an unambiguous message coming from the system,” he said.The planned extra equipment for the section, including fibre optic cables to detect pipeline and ground movement, will help make it clear when a spill has happened.Husky’s investigation determined the pipeline buckled because of ground movement. The company has said it accepts full responsibility and is using what it learned to improve operations.The Saskatchewan Justice Department said recently it was still reviewing Husky’s response to the spill to decide whether charges should be laid.The government is itself under scrutiny on its spill prevention measures, with the James Smith First Nation launching a lawsuit alleging the province ignored recommendations from its own auditor general on pipeline safety and so is at least partly to blame for the spill.Talk of the spill came after a lacklustre quarter for the company, which reported a $93-million loss for its second quarter and just $10 million of adjusted earnings, well below analyst expectations of $80 million in adjusted earnings according to Thomson Reuters data.The results were, however, a boost from the same quarter last year when the company had a net loss of $196 million and a $91-million adjusted loss.
“The ongoing FSAP update is assessing potential vulnerabilities in the financial sector. The authorities should remain vigilant for systemic risks, and recommendations in the update can be used to strengthen the financial system further.“The Sri Lankan authorities have undertaken substantial macroeconomic policy adjustments to stabilize reserves. It will be important to continue macroeconomic stabilization and structural reforms efforts, in particular maintaining exchange rate flexibility while building international reserves, given the uncertain global outlook. A successor arrangement with the Fund would provide valuable support to the authorities in these endeavors.” Following the Executive Board’s discussion on Sri Lanka, Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated: “The current monetary policy stance is appropriate, and monetary conditions should remain firm in the near term given high headline inflation and possible second-round effects. With a flexible exchange rate regime, monetary policy can increasingly focus on inflation control to achieve broader macroeconomic stability while allowing the exchange rate to act as a buffer for external shocks. Foreign exchange market intervention should thus be limited to smoothing excessive volatility, and steps should be taken to gradually deepen the foreign exchange market.“The slowdown in economic activity and declining imports are adversely affecting fiscal revenues, while interest payments on government debt are higher than budgeted. The authorities are committed to meeting their 2012 deficit target by restraining expenditure, but a redoubling of effort to strengthen revenue administration is needed. Furthermore, continued structural reforms are required to put state-owned energy enterprises on a sound financial footing. The Executive Board of the International Monetary Fund (IMF) on Friday completed the eighth and final review of Sri Lanka’s economic performance under a program supported by a Stand-By Arrangement (SBA).The completion of the review enables the immediate disbursement of an amount equivalent to US$ 415.0 million, bringing total disbursements under the arrangement to an amount equivalent to US$ 2.49 billion. “Following robust growth in the first quarter of 2012, activity has started moderating in response to policy tightening and weakening global demand. Headline inflation has increased, but core inflation remains relatively stable, while tighter monetary and credit policies have begun slowing credit and import growth. The external current account deficit is narrowing, and international reserves have stabilized.
The police busted a prostitution ring operating in the Slave Island area today, the police media unit said.The police said that women were being supplied to the clients using a van. A special police unit seized the van along Hunnupitiya road at Slave Island today.The police also arrested a woman who was believed to have been in charge of the operation. The police said that four women who were engaged in prostitution were also arrested.The Slave Island police are conducting further investigations. (Colombo Gazette)
Sumanthiran said that a time has already been allocated for the TNA to meet her during her visit to Sri Lanka. The Tamil National Alliance (TNA) is to meet the UN High Commissioner for Human Rights Navi Pillay in Colombo on August 30th, the party said.TNA MP M.A. Sumanthiran said that a TNA delegation led by party leader R. Sampanthan will meet Pillay and discuss several issues. He said that the TNA will discuss the military presence in the north as well as the issue of political prisoners when they meet her. The TNA will also discuss human rights concerns and the upcoming polls in the north.Pillay will be in Sri Lanka from August 25 to the 31st and she will conclude her visit with a press briefing in Colombo. (Colombo Gazette)
“A strong relationship between United States and Sri Lanka will help foster greater stability, security, prosperity, and a rules-based order for the Indo-Pacific region and around the world,” said US Ambassador Atul Keshap. “This US Navy ship visit demonstrates the US commitment to partners such as Sri Lanka.” Members of the US Navy’s 7th Fleet Band will arrive with the ship and stage free public performances in Colombo, including a joint performance with the Sri Lanka Navy, Army, and Air Force bands on March 26 at Viharamahadevi Amphitheatre from 6 to 8 pm. On March 27 free solo public performances are scheduled at Majestic City at 12 noon and at the Dutch Hospital complex from 6 to 7 pm. On March 29, they will also perform for students from several area schools at Ananda College.The USS Blue Ridge has been forward deployed to Yokosuka, Japan for 36 years. As the command and control flagship for the U.S. 7th Fleet Commander, Vice Admiral Joseph Aucoin, the USS Blue Ridge is committed to strengthening and fostering relationships within the Indo-Asia Pacific region. The last US Navy ship to visit to Sri Lanka was the USS Ford (FFG 54), which conducted a port call in Galle October 11-14, 2011. (Colombo Gazette) The US 7th Fleet flagship USS Blue Ridge (LCC 19) will arrive in Colombo for a port call March 26, the first visit by a US Navy ship since October 2011.The visit builds upon last month’s Partnership Dialogue in Washington D.C., where both nations pledged to strengthen maritime security cooperation efforts in the Indian Ocean Region in order to counter piracy, provide humanitarian assistance, and ensure free and safe navigation in the region’s vital shipping lanes. The Blue Ridge team consists of more than 900 sailors, who will interact with their Sri Lanka Navy counterparts, experience Sri Lanka’s vibrant culture, and engage with its people. The sailors will also use their shore leave to volunteer at a community center by refurbishing its walls and furniture, building playground equipment, and serving food to the needy.
Dissanayake also said that more changes are expected to be made in the future in the SLFP in order to prepare the party to face the next election.The SLFP General Secretary also said that all SLFP members will be invited for the SLFP anniversary event in Kurunegala next month. Sri Lanka Freedom Party (SLFP) General Secretary Duminda Dissanayake today insisted that there was no attempt being made to take revenge on SLFP members of the joint opposition.Speaking to journalists today, Dissanayake said that some of the changes made this week in the SLFP was part of a restructuring process of the SLFP. He insisted that the removal of some SLFP organisers was not to take revenge on them for being part of the joint opposition but to strengthen the party. He also noted that removing an SLFP member from a post does not mean they have been removed from the party. He said that former President Mahinda Rajapaksa is among those invited to attend the anniversary event. (Colombo Gazette)
“The mission made significant progress toward reaching a staff level agreement with the government on completion of the first review. Discussions will continue in October in Washington D.C. during the Annual Meetings of the IMF and World Bank. “The mission welcomes the Central Bank of Sri Lanka’s (CBSL) move to preemptively raise policy rates to maintain inflation within its target band. The CBSL should remain vigilant in monitoring inflation pressures and stand ready to tighten further should inflation or credit growth continue to rise. In light of easing external pressures, the mission encourages the CBSL to continue its effort to rebuild international reserves and maintain exchange rate flexibility to further develop the foreign exchange market. In this regard, the mission and the authorities discussed plans for a transition to flexible inflation targeting as the monetary policy framework, possibly supported by IMF technical assistance.“The mission also encourages the government to make concerted efforts in implementing structural reforms in public financial management and state owned enterprises, building on the substantial technical assistance received over the years. Renewed effort toward greater integration into regional and global supply chains, higher levels of foreign direct investment (FDI), and enhancing prospects for private sector investment are important for achieving medium-term macroeconomic objectives. Bolstering competitiveness to boost trade and private sector development will also support growth potential.”The mission met with President Sirisena, Prime Minister Wickremesinghe, Finance Minister Karunanayake, Governor of the Central Bank of Sri Lanka, Parliamentarians, other public officials, and representatives of the business community, civil society and international partners. (Colombo Gazette) “Overall, macroeconomic performance in first half of 2016 reflected a mix of improving balance of payments, reduced growth mainly related to recent floods, and slightly higher inflation. The mission welcomes the effective tightening of fiscal and monetary policies that contributed to improving market confidence and easing pressures on external balances. “The mission commends the authorities for implementing their IMF-supported economic program under difficult circumstances, with all quantitative targets through end-June being met. However, some forward looking aspects of the program review, mainly related to the implementation of the tax reform package, need to be addressed without further delay.“Accordingly, it is important that the government expedites the legislative process of implementing the value added tax (VAT) amendments that are needed to support revenue targets for 2016 and 2017. The 2017 budget should also be underpinned by a well-crafted and high-quality tax policy strategy to raise Sri Lanka’s low tax revenue-to-GDP ratio. Commencing the legislative process for the new Inland Revenue Act would be an important step in rebalancing the tax system toward a more predictable, efficient and equitable structure and in generating the needed resources in support of the country’s ambitious social and development objectives. A staff team from the International Monetary Fund (IMF) led by Jaewoo Lee visited Colombo during September 13-23, 2016 to hold discussions on the first review of the Sri Lankan authorities’ economic program that is being supported by a three-year Extended Fund Facility (EFF).The program aims to support the authorities’ ambitious reform agenda to put public finances on a sustainable footing and create space for its social and development program. At the end of the visit Lee made the following statement: