Thursday, July 13, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): As Israel rolled tanks into Lebanon in response to Hezbollah
actions, Iran was sent back from the EU to the UN after nuclear talks
failed, U.S. oil inventories were revealed to be much lower than predicted,
and sabotage was suspected in the disruption of two Italian-owned pipelines
in Nigeria, the North American markets reeled. Triple-digit drops hit both
Bay Street and Wall Street, fueled also by disappointing earnings reports
from several large U.S. and European companies.
* The S&P/TSX Stock Exchange Composite Index dropped 169.13 points, or 1.44%.
* In deal news, Astral Media and Corus Entertainment bought more of
Teletoon, a specialty television network, to bring both their shares up
from 40% to 50%. The companies will pay C$96 million for the stakes.
* The technical sector dipped as German business-software giant SAP AG
warned of lower-than-expected license revenue growth in the second quarter,
posting a figure of euro 621 million when analysts had predicted euro 675
million. Growth was 8% and revenue rose 9% to euro 2.2 billion, missing
Thomson First Call's estimates of euro 2.29 billion.
* Ottawa's top financial-services watchman has decided to resign on
October 13th. Nicholas Le Pan, the head of the Office of the Superintendent
of Financial Institutions since 2000, has lately been sounding an alarm
about the status of defined-benefit pension plans, claiming they need to be
made more affordable for employers or they will continue to move to
fixed-contribution plans.
* Quebec's lumber companies adopted a 35-12 vote against the
U.S.-Canadian softwood agreement, joining many of their Western
counterparts in demanding a renegotiation of the termination and other
clauses. The industry feels that PM Harper's government is not allowing
proper debate, and the agreement itself can be vetoed without a certain
amount of softwood lumber growers' support.
* The Xstrata/Falconbridge/Inco epic trudged along as Anglo-Swiss
Xstrata was given a green light by the EU for its hostile takeover of
Falconbridge. Having cleared that regulatory hurdle, Xstrata must now wait
for Investment Canada's decision in August.
* Canada Southern Petroleum recommended to its shareholders that they
accept the bid of Canadian Oil Sands for C$13.10 per share after Oil Sands
outbid rival Petro-Canada by C$0.10. Southern had issues with the way
Petro-Canada valued its Arctic oil and natural gas reserves. Petro-Canada
vowed to continue the pursuit and ask the Alberta Securities Commission to
void Southern's poison pill.
* In other oil and gas news, Nexen reported doubled profits in the
second quarter of C$406 million. Cash flow from operations rose from C$623
million to C$729 million, and in more good news, the British government
approved Nexen's development plan for the Ettrick oil field in the North
Sea.
* A perfect storm of unrest, sabotage, low American inventories, and
higher demand sent crude oil up to a record of US$76.70, rising US$1.75.
* Bell Globemedia, owner of CTV, continued its planned expansion by
buying the CHUM Ltd. television network for C$1.4 billion. Pioneer CHUM,
founded by Allan Waters in 1954, was up for sale after his death last year.
Bell Globemedia will sell five of its A channel TV stations and pick up 33
radio stations, 12 TV, and 21 cable channels. It will also have to ask for
a hearing to allow it to own more than one media outlet in a few Canadian
markets.
* The Bank of Canada revised its economic outlook figures, nudging them
upwards for the remainder of 2006 but warning of a small slowdown in
2007-08. The economy is projected to grow by 3.2% this year, but the Bank
believes that a rising loonie, slower times in the U.S., and past interest
rates will decrease activity to a rate of 2.9% next year and 2.8% in 2008.
The Bank also reiterated that it believes the national interest rate of
4.25% is enough to constrain inflation for now.
* World tumult continued to send gold up, but not at the high rate it
set earlier this week, closing up US$3.10 to US$654.40.
-- Carolyn.Crapo@contractor.Thomson.com; Thomson Financial Corporate
Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
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SOURCE Thomson Financial Corporate Group
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