Posts tagged 'canada'

A game of krónur

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Mar 05 2012 09:03 | Comment |

Some intriguing thoughts from Sebastien Galy, Societe Generale FX strategist, on Icelandic politicians’ interest in the Canadian dollar:

An independent currency for a country with the population of the size of a decently sized Canadian city was always going to be a problem. Having that country run a financial bubble while offering very high yield was a recipe for a very rapid rise of a financial empire followed by a catastrophic collapse with the currency ceasing to have a market at one point. The past few years have been of picking up the broken pieces and a move to a new currency would help to bring credibility while forcing adjustments in internal prices. Read more

Bubble warning over Toronto’s condos

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Feb 13 2012 10:40 | Comment |

Almost three times as many skyscrapers and high-rises are being built in Toronto than in New York, reviving fears that Canadian property prices are unsustainable, reports Bloomberg. Investors have rushed into Canadian housing in response to record low interest rates. Toronto’s condominium market has grown rapidly, with over a hundred housing units either under construction or in the planning stages. The “condo surge” of supply alone could drive down prices in the next few months even if interest rates remain low well into 2013, Bank of America analysts have warned. Read more

US MMFs versus the Eurozone, Part 2

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Jan 26 2012 17:02 | Comment |

In the first installment of US money market funds versus the eurozone, the funds were seen fleeing the continent as quickly as possible, leaving all sorts of funding chaos in their wake.

In part two, the flight of the US money market funds seems to have intensified, but the outflows have been more clearly redirected… namely into Australian, Canadian and Japanese banks instead. Read more

Japan and Canada warn on Volcker rule impact

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jan 12 2012 05:18 | Comment |

Foreign governments and asset managers are mounting a last-ditch push against the US Volcker rule, worried that the proposed ban on proprietary trading could exacerbate a liquidity crunch, the FT says. Japanese and Canadian regulators have warned the US government that the rule, which is due to be finalised within weeks and put into force in July, could harm world markets by preventing or deterring US banks such as Goldman Sachs from trading. The Volcker rule is designed to prohibit most “prop trading” by banks, where institutions take positions for their own accounts, but Wall Street has argued that the restrictions will also hamper “market making”, where a bank stands between a buyer and seller of securities. Jun Mizuguchi, assistant commissioner for international affairs at Japan’s Financial Services Agency, said: “We are afraid that US financial institutions may refrain from trading” Japanese government bonds. In a letter to US regulators, the Canadian Office of the Superintendent of Financial Institutions said the rule could “undermine the liquidity of government debt markets outside of the US”. Read more

Citi’s high carbs diet

| Nov 21 2011 16:33 | Comment |

It seems like more or less anything can be deemed an asset class these days.

Here’s the latest one from Citigroup analysts: ‘Carbs’. No that’s not McDonalds and Coca Cola, but Canada, Australia, Russia, Brazil and South Africa, i.e. the world’s top commodity players. Read more

Sinopec makes C$2.2bn bid for Canada’s Daylight

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Oct 10 2011 10:22 | Comment |

Sinopec has offered C$2.2bn (US$2.1bn) to buy Canadian oil and gas firm Daylight Energy, the latest in a series of acquisitions by Chinese oil companies hungry for assets in North America, the FT reports. China is the world’s second-biggest crude oil consumer after the US, and China’s state-owned oil and gas companies are among the world’s most active in global oil deals. Sinopec is offering C$10.08 per share for Daylight, a junior oil and gas exploration company with large acreage in Western Canada that is only partially developed. The offer price is more than twice Friday’s closing level for shares in the Toronto-listed company, and represents a 44 per cent premium to the 60-day trade weighted average share price. Daylight’s board said they supported the deal, which must still be approved by shareholders and regulators. Read more

Salida Capital says collapse rumours ‘unfounded’

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Oct 04 2011 10:36 | Comment |

Salida Capital, a Toronto-based hedge fund, has said speculation of its collapse are “unfounded”, Bloomberg reports. According to the news agency, the fund has now increased its hedging in energy and other holdings as oil prices fall. In a report to clients the fund said “we’ve now raised our level of hedging in both the energy sector and the broad market”. Salida told investors in May that commodity prices were in a correction and were poised to rebound, adds Bloomberg. At the time, Chief Executive Officer Courtenay Wolfe said her firm managed about $900m in assets, focusing on natural resources, with about 50 per cent of the investments in Canada. The company’s Salida Strategic Growth Fund has dropped 20 percent this year, including a 17 percent drop in the past month, according to data compiled by Bloomberg. Read more

Osborne urges global strategy on deficits

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Aug 15 2011 04:58 | Comment |

George Osborne is recruiting international support for his unyielding stance on deficit cutting. In an article published in the FT on Monday, Mr Osborne calls for “hard decisions on spending, entitlements and taxation in countries with large budget deficits”. The article is co-authored with the finance ministers of Australia, Canada, Singapore and South Africa.  The FT says the article comes at the same time as two reports, published on Monday, suggest that the UK economy will remain stagnant in the near future. In a survey by the Chartered Institute of Personnel and Development and KPMG, the professional services firm, the balance of employees planning to increase staffing levels has shifted from positive to negative. The Monthly Business Trends Indices published by BDO, an accounting firm, was also gloomy. The report, which is prepared by the Centre for Economics and Business Research and aggregates other business surveys, documents continuing pessimism in both manufacturing and services.

  Read more

LSE-TMX collapse favours Maple Group

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Jun 30 2011 09:54 | Comment |

Maple Group, the consortium of Canadian banks and funds bidding to take control of TMX, have seen the London Stock Exchange bow out as a rival but must still convince competition regulators, reports the Globe and Mail. Maple’s plans for TMX involve combining it with an alternative trading exchange, leaving 80 per cent of the Canadian stock market in the combined entity’s hands. The banks could close down the alternative market in order to comply with regulators, but also face a large minority of hostile shareholders, the FT says. Read more

Maple Group pumps up TMX counterbid

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Jun 07 2011 09:21 | Comment |

The Canadian consortium looking to upset the London Stock Exchange’s merger with TMX has moved to add up to four new members as the clock ticks on a takeover, the WSJ reports. Desjardins, GMP Capital, and Dundee Capital are among the financial services firms in talks on joining the Canadian banks and pension funds that form Maple Group. New members would improve Maple’s chances in the eyes of TMX shareholders — a fragmented group who remain uncertain whom to back in the contest, ahead of a vote on the LSE merger this month, Reuters says. Read more

Canada ‘open’ to selling Fiat stake

| May 31 2011 04:54 | Comment |

Canada is open to selling its 1.7% stake in Chrysler directly to Italy’s Fiat, but will wait to see what price the US government gets for its shares in the automaker before deciding, Canadian finance minister Jim Flaherty said on Monday, reports Reuters. Fiat took operational control of Chrysler as part of the Detroit-based automaker’s US and Canadian-backed bankruptcy restructuring in 2009. It is in the process of exercising an option to buy the U.S. Treasury’s 6% stake and the two sides are negotiating a purchasing price. Fiat has no option to buy the Canadian shares, and Flaherty said Ottawa would consider the outcome of the US deal before deciding if it will sell its stake directly to Fiat or wait for Chrysler’s IPO, the date of which has yet to be decided. Read more

Battle lines drawn over fresh TMX bidder

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| May 16 2011 10:41 | Comment |

Battle lines are being drawn in Canada between supporters and opponents of a C$3.6bn ($3.7bn) bid by nine domestic banks and pension funds for TMX Group, operator of the Toronto and Montreal stock exchanges, the FT reports. The bid consortium, Maple Group Acquisition, announced on Sunday that it would offer cash and shares valued at C$48 per TMX share, about 20 per cent above the value of an all-share deal between TMX and the London Stock Exchange agreed in February. Reaction to the Maple bid has been divided. Supporters see it as a vehicle for the creation of a Canadian “national champion” and an affirmation of the strength and stability of Canada’s financial system. Critics contend that a takeover of TMX will severely restrict competition in securities trading and exacerbate conflicts of interest. Read more

Minmetals in $6.5bn bid for Equinox

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| Apr 04 2011 09:31 | Comment |

China’s Minmetals Resources has launched a C$6.3bn (US$6.5bn) unsolicited bid for Equinox Minerals, the Australian-Canadian copper miner which itself is in the throes of seeking to acquire Vancouver-based Lundin Mining, the FT reports. The bid is the largest-ever unsolicited takeover attempt by a Chinese mining company, at a time when China’s miners are increasingly seeking to go abroad. Beyond Brics says Minmetals is going long on copper, giving the entire copper sector a boost. Fox Business adds that the bid will be could prove an important test case for the approach of Australia’s foreign investment regulator. Read more

Why no Canadian, Australian housing busts?

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| Mar 21 2011 15:31 | Comment |

Here’s a chart to ponder from the peer review of residential mortgage practices, just published by the internationally-coordinated Financial Stability Board:

 Read more

Canadian banks wary of LSE-TMX deal

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Mar 10 2011 09:15 | Comment |

Canada’s banks are split on whether to support the proposed tie-up of the London and Toronto stock exchanges, the FT reports. Four of the country’s six biggest banks – Toronto-Dominion, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and National Bank – are working on a public statement expressing doubts about the deal, although Royal Bank of Canada and Bank of Montreal will support it. Several banks are shareholders in an alternative trading system that competes with the Toronto exchange, and may propose for it to be merged with TMX instead. In any case, the banks’ opposition shows that LSE-TMX is generating far more resistance than first thought. Read more

PetroChina goes where BHP failed to tread

| Feb 10 2011 09:50 | Comment |

PetroChina on Wednesday gobbled up another chunk of the world’s resources, agreeing to pay C$5.4bn ($5.4bn) for a 50 per cent stake in a large natural gas field in Canada owned by Encana, the Calgary-based oil and gas producer.

Or rather, China’s largest oil and gas producer said on its website it had agreed to the deal and had “for years” been seeking opportunities to work with Canadian oil and gas companies in areas including LNG and oil sands in Canada, as well as projects in China. Read more

LSE/TMX – a defensive merger?

| Feb 09 2011 09:44 | Comment |

The London Stock Exchange does not have a great track record of consummating deals (remember the proposed Deutsche Borse transaction of the 2001?) or grabbing big strategic opportunities.

So will its’s proposed merger with TMX Group, Canada’s largest exchange company, go the way of Northern Foods/Greencore or British Airways/Iberia? Read more

Canada eager to increase timber exports to China

| Feb 01 2011 21:34 | Comment |

For British Columbia’s sawmills, China has become more than just a booming market. By persuading customers across the Pacific to build houses, schools and even apartment buildings out of wood instead of cement, the Canadians are realising a long-held dream: to shake off their dependence on the fickle and protectionist US. China’s importance was underlined last month when the Obama administration sought arbitration over a US claim that the BC government unfairly subsidised sales of diseased logs from provincially owned forests, reports the FT. The complaint came on the heels of a separate ruling that Canada must impose almost C$60m ($59.8m) in new taxes on lumber exports to the US to offset other illegal subsidies. Read more

Onex seeks sale of Husky

| Dec 17 2010 09:31 | Comment |

Onex is in talks to sell its Husky Injection Molding Systems unit to rival buyout firms, Bloomberg reports, in a deal which could be worth up to $2bn according to sources. Canada’s largest private-equity firm has hired Goldman Sachs  and JPMorgan Chase to handle the auction the news agency reported. Ontario-based Husky manufactures machines turning resin into plastic products. Toronto-based Onex bought Husky for about $953m in 2007. Read more

Experts report on Canada oil sands

| Dec 16 2010 08:15 | Comment |

Activists have overstated the environmental damage caused by Alberta’s oil sands projects while producers and regulators have failed to address risks posed by the industry, a report by Canada’s top scientists has concluded. “Is the oil sands industry the most environmentally destructive project on earth, as has been suggested by some media and declared critics of the industry?” the panel, set up by the Royal Society of Canada, has asked, reports the FT. “Based on our review of the publicly accessible evidence, a claim of such global magnitude is not accurate.” The oil sands, covering an area the size of Florida and second only to Saudi Arabia in estimated reserves, have drawn tens of billions of dollars in investment from many of the world’s biggest energy groups. Read more

Royal Bank of Canada loses top rating

| Dec 14 2010 05:00 | Comment |

Royal Bank of Canada lost its Moody’s triple-A credit rating on Monday, leaving its smaller rival Toronto-Dominion as the only Canadian bank — and one of less than half a dozen worldwide — to retain top  ranking, reports the FT. In cutting the rating to Aa1, Moody’s cited concerns about RBC’s growing international capital markets business which, it said, “poses significant risk challenges”. Nevertheless, said Moody’s senior vice-president Peter Nerby, the bank still “enjoys one of the highest ratings globally among banks with substantial capital markets operations”. The Telegraph adds that Moody’s warnings echo growing concerns among investors about risks taken by investment banking divisions to attain the higher returns that make them attractive to banks. Read more

BHP scraps bid, plans $4bn buyback

| Nov 15 2010 01:39 | Comment |

BHP Billiton on Monday formally scrapped its $39bn hostile bid for Canada’s PotashCorp — its third straight defeat in a key acquisition attempt – and bowed to investor calls with plans for a $4.2bn share buyback, reports Reuters. The buyback was seen as a signal from BHP that opportunities for other big takeovers are limited. Canada blocked the miner’s bid for the world’s largest fertiliser maker on Nov 3 and gave BHP a month to prove the takeover would benefit Canada. But BHP said Ottawa wanted too many concessions beyond the $1bn-plus worth of undertakings already offered. The Australian notes that analysts are focusing on other potential M&A activity from BHP, while the FT examines BHP’s decision to kill its bid. Read more

Canada to tighten investment rules

| Nov 08 2010 05:44 | Comment |

Canada plans to toughen its foreign-investment law in a bid to force greater transparency and accountability from investors amid political controversy after Ottawa last week rejected BHP Billiton’s bid for PotashCorp, reports the FT. Tony Clement, industry minister, told the FT the review was not specifically linked to the BHP deal, which his government said did not offer a “net benefit” to Canada, as required under the Investment Canada Act. In particular, he said the government would seek to require foreign investors to publicise their undertakings on jobs, local processing, technology transfers, and other commitments typically made to meet the “net benefit” test. Read more

PhosAgro eyes Potash after BHP rebuff

| Nov 05 2010 05:09 | Comment |

BHP Billiton’s $39bn hostile bid for Canadian group PotashCorp appears dead even though it has 30 days to improve its terms, politicians and analysts said, reports the FT. Tony Clement, Canada’s industry minister, on Wednesday said he was not satisfied BHP’s deal would be of “net benefit to Canada”, as required under foreign investment rules. He is due to explain his reasons after a 30-day period in which BHP can improve its terms. Reuters reports that Canada’s farm minister said one reason was that BHP’s deal would have given Australia’s farm sector too much advantage. The WSJ adds that even as BHP weighed its next move, Russian fertiliser group PhosAgro confirmed it is considering buying a stake in PotashCorp. FT Alphaville meanwhile looks at the real losers from the BHP knockback. Read more

The real loser in the Potash compost heap

| Nov 04 2010 11:20 | Comment |

The “obvious loser” from the Canadian government’s rejection on Wednesday of BHP Billiton’s $39bn hostile bid for PotashCorp is BHP chief Marius Kloppers, according to the Wall Street Journal’s Heard on the Street column.

But wait. Kloppers still has a few reasons to smile. And the real losers could well be right at home in Canada. Read more

Canada rejects BHP Potash bid

| Nov 04 2010 03:48 | Comment |

Canada has rejected BHP Billiton’s $39bn bid for PotashCorp, in a potentially fatal blow to the Australian miner’s 10-week pursuit of the Saskatchewan-based fertiliser producer, reports the FT. In announcing Ottawa’s decision, Tony Clement, Canada’s industry minister, said he was “not satisfied” the deal would be of net benefit to Canada (as required by the country’s foreign investment law). But, he noted, the law gives BHP 30 days for additional representations and undertakings. Lex says the deal was – and still is – “certainly worth a crack”, while FT Alphaville asks: “What now Marius Kloppers? Will you sweeten the deal or… do a massive share buyback instead?” The WSJ concludes that PotashCorp’s takeover premium has faded and Canada has sent a “chilling signal” to investors. Read more

Canada says no to BHP Billiton

| Nov 03 2010 22:46 | Comment |

Get your hands off our potash!

Ottawa, November 3, 2010 — Today, the Honourable Tony Clement, Minister of Industry, made the following statement regarding an application submitted by BHP Billiton Development 2 (Canada) Limited (BHP Billiton) on a proposed acquisition of Potash Corporation of Saskatchewan Inc. (PotashCorp): Read more

Crunch time for BHP’s Potash bid

| Nov 03 2010 05:30 | Comment |

BHP Billiton’s $39bn hostile bid for Saskatchewan-based PotashCorp faces a crucial test on Wednesday with the Canadian government’s announcement on whether it will allow the deal to go ahead, reports the FT.  Amid frenzied market speculation, local media said on Tuesday that Canada’s industry department had endorsed the deal. According to several sources, BHP has offered unprecedented undertakings to show that its bid would provide a “net benefit” to Canada, as required under foreign investment rules, including the creation of a panel to monitor compliance. Reuters adds that Ottawa insisted on Tuesday that no decision had been made ahead of Wednesday’s announcement. The news agency later reported on Wednesday that Russian fertilizer company Phosagro is planning to bid for PotashCorp, according to a report in Russian business daily Vedomosti, saying that Phosagro chairman Vladimir Litvinenko has asked Russian prime minister Vladimir Putin to approve a potential deal and request financing from Russian banks. Read more

Potash options traders raise wagers

| Nov 02 2010 04:51 | Comment |

Options traders are boosting their bets that BHP Billiton and potential rivals will bid higher than the $40bn that BHP has already offered for Potash Corp of Saskatchewan, reports Bloomberg. PotashCorp, the largest fertiliser producer, rejected BHP’s $130-a-share takeover proposal and said it had held talks with 15 potential alternative bidders. BHP’s offer is subject to review by the Canadian government, which can block the deal if it finds the transaction does not provide “net benefits” to the country. A decision is due by Wednesday. Read more

BHP eyes revising Potash bid

| Nov 01 2010 04:10 | Comment |

Domestic political pressure mounted on the Canadian government to block BHP Billiton’s $39bn hostile bid for PotashCorp, as three other provinces joined Saskatchewan to oppose any such deal, reports the FT. A private poll found that most of the party’s 13 MPs from Saskatchewan could lose their seats if the deal went ahead, said sources close to the Conservative party, which leads a minority government with 144 MPs out of a total 308. One lobbyist said it was hard to predict Ottawa’s final decision, although it recently appeared to favour BHP’s bid. Meanwhile, reports Reuters, citing the Sunday Times, BHP is considering raising its $39bn Potash bid by 10%. Read more

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