Rechercher dans la communauté

The Globe and Mail

(Courtesy of The New York Times) Holy crap! The new AT&T going to have 129.23 million customers. It would be like Bell buying out Telus.

China’s Stock Market Passes US as Leading Indicator Published: Wednesday, 4 Aug 2010 | 12:43 PM ET By: John Melloy Executive Producer, Fast Money China may be the second biggest economy in the world behind the US, but it is No. 1 in terms of influence over global stock markets, analysts said. “The Chinese equity market has shown signs of ‘leading’ global equity markets at turning points over the past three years,” wrote Geoffrey Dennis, Citigroup’s emerging markets strategist. “As a result, the 13 percent rally in the Shanghai Composite since early-July has been a major support for improved overall global sentiment over the past month.” It’s only natural China’s stock market would take a leading role following structural changes such as a jump in listings and the allowance of short sales. After all, the economic influence speaks for itself. Among other things, China is the biggest consumer of energy products, accounts for 70 percent of iron ore demand, and in 2009, became the No. 1 auto market, according to analysts’ reports. The Shanghai Composite Index has led the US market back from its 2010 low. It’s no coincidence that the leading US stocks during this comeback have come from the stocks in the industrial and raw material industries such as Caterpillar [CAT 71.56 -0.40 (-0.56%) ] and Freeport-McMoRan [FCX 74.61 0.54 (+0.73%) ]. Ford [F 13.04 0.06 (+0.46%) ] shares are up 30 percent in one month. “China’s rapid growth in auto sales is merely a reflection of the rise of middle class consumption patterns,” wrote Marshall Adkins, Raymond James energy analyst. “Add in increasing Chinese trucking, petrochemical and aviation consumption, and total Chinese oil demand growth in 2011 should be well north of 500,000 barrels per day and could drive over half of the global oil demand growth next year.” It’s no coincidence then that oil topped $80 this week before retreating today. The iShares FTSE/Xinhua China 25 Index [FXI 41.95 -0.08 (-0.19%) ], an ETF traded here on the NYSE, is supposed to be a direct play on the Chinese market, but it has underperformed China’s local market over the past month. The ETF contains only the large Chinese stocks that are listed as ADRs on US exchanges. What this data shows is that you may be better off buying a US index fund, industrial stocks or a broader emerging market ETF if you believe China is going higher. Citigroup sees the Chinese stock market rising five to 15 percent higher by the end of the year as fears of an economic slowdown are priced in. "Based on a 'no double-dip' scenario, solid growth in emerging markets, low interest rates 'for longer' and attractive valuations, we remain bullish on emerging market for the long-term, including Chinese equities," wrote Citi's Dennis. The closing bell of the New York Stock Exchange used to ripple through the rest of the world, dictating trading in Australia, Asia and Europe that followed it. No longer. The US traders’ day may be decided before he or she even wakes up. http://www.cnbc.com/id/38558580

(Courtesy of The Montreal Gazette) I removed most parts of the article that aren't really speaking about the Decarie Square project. Plus he voices his opinion on office towers here in Montreal.

The owner of Yogen Fruz, Cultures and several other food court stalwarts is adding stand-alone coffee and doughnut shops to its suite of brands. MTY Food Group Inc. said it has entered into a binding agreement to purchase all of privately held Country Style Food Services Holdings Inc. for an undisclosed price. The buy allows MTY to seize "the opportunity to strengthen its position and foothold in the Ontario quick service franchise industry and launches itself as a major player in the coffee and sandwich segment" the company said in a statement. Montreal-based MTY was already on the acquisition trail before it announced the Country Style purchase, but this latest acquisition takes it into new territory. Country Style is one of the biggest coffee and doughnut retailers in Ontario and is a household name in that province, but lags behind market leader Tim Hortons Inc. in number of stores and perceived quality among consumers. It does have significant reach however with 488 outlets, and is just the latest expansion for MTY. MTY acquired Taco Time Canada Inc. from its U.S.-based parent last November for $7.85-million. The deal gave it 117 of the quick service Mexican food restaurants, mostly in Western Canada. A couple months earlier it added 27 Tutti Frutti restaurants, solidifying its base in Quebec. Earlier this year MTY reported a 16% increase in fourth quarter net income to $2.84-million. For its fiscal year ending Nov. 30 of last year, the company earned $9.91-million, an 8% increase over a year earlier. MTY says Country Style's sales were approximately $94-million for the last 12 months, more than a third of the system-wide sales reported by MTY last year. The combined company would still be a shrimp compared with Tim Hortons, which reported sales last year of more than $2-billion and has a market capitalization of $5.9-billion. The chain is so omnipresent throughout much of the country that it has tried to expand in the U.S. with mixed results. While consumer spending has been crimped, fast food companies have been decent stock investments since the fall market crash. Shares of Tim Hortons are breakeven over the last seven months compared to a 26% drop for the S&P/TSX composite index. MTY has also proven itself a solid investment in uncertain times. Over the last seven months, the venture exchange-listed stock has dropped only 3%. http://www.financialpost.com/story.html?id=1492403

TD and Royal downgraded to sell Posted: January 16, 2009, 8:47 AM by Jonathan Ratner Both Royal Bank and Toronto-Dominion Bank were downgraded to a “sell” at Dundee Securities on expectations for weaker credit quality, bringing them in line with the firm’s bearish view on the sector as a whole and its recommendations for all of the Big 5 banks. Despite significant deterioration in its U.S. loan portfolio’s credit quality, Royal’s earnings have held up reasonably well on the back of its domestic retail banking programs, analyst John Aiken told clients. However, since Canada is unlikely to escape the “economic carnage” occurring in the U.S., he said it is only a matter of time before domestic credit quality begins to weaken materially, as credit card exposures have already started to show. “Consequently, although Royal will likely fair relatively well and should retain a premium to the group, absolute risk still exists,” Mr. Aiken said, cutting his price target on the stock from $38 per share to $35. It closed at $34.04 on Thursday. His forecast for TD moves from $51 to $44 as a result of expectations for a challenged outlook in the coming quarters as a result of additional deterioration in credit quality. It ended the day at $44.05. While Mr. Aiken said TD’s operations remain strong and its long-term prospects are solid based on its U.S. growth platform, he thinks 2009 will be the second straight year of declining earnings. “TD will not be immune and we believe that there is a risk that current expectations for credit losses have a significantly greater chance of being too low rather than too conservative,” the analyst said. Mr. Aiken did upgrade Laurentian Bank from a “sell” to “neutral,” but lowered his price target from $36 to $33. The stock closed at $31.41 on Thursday. “We believe that Laurentian’s valuation is much more reasonable at these levels,” he said, adding that while the bank does not have any direct exposure to the U.S., it will still feel pain on the domestic front. In general, Mr. Aiken feels the impact of underlying economic weakness and credit woes in the U.S., which has produced an earnings drag, increased write-downs and higher loan loss provisions, has also filtered into the Canadian market and will likely linger into the first half of 2009. “Consequently, we believe that headwinds to the banks’ earnings and concerns of capital adequacy will remain in the forefront as the banks begin the journey into 2009, and with it, the remaining perils from the past year, plus those yet unknown,” he said. As a result, the analyst said now is not the time to change his cautionary stance on the sector. Instead, he said it is time to remain “selective and mindful.” Mr. Aiken suggested that strong domestic operations should bode well for the retail market leaders TD, Royal and to a lesser extent CIBC. He also expects higher provisioning will come from the U.S. exposures of TD, Royal and Bank of Montreal, as well as the ripple effects to Bank of Nova Scotia’s Latin America assets. “Overall, valuation outlook will be largely predicated on the depth and breadth of the U.S. economic slowdown,” the analyst said. “Further credit deterioration will result in higher provisions, while added margin compressions will also depress earnings, offering little justification for any meaningful near term increase in valuations.”

Quebec companies getting pummeled By Paul Delean December 12, 2008 Quebec’s economy supposedly is weathering current financial turbulence better than other parts of the country, but you’d never know it from the stock listings. Several publicly traded Quebec-based companies that used to have significant share valuations have plummeted below, or near, the dreaded dollar mark, in some cases becoming penny stocks. The 2008 Dollarama portfolio includes familiar names like AbitibiBowater, Quebecor World, Mega Brands, Garda World, Shermag, Hart Stores and Bikini Village. What happens from here is anybody’s guess. Once stocks start descending to these levels, getting back to past peaks really isn’t the issue anymore. Survival is. Institutional investors are leery. Several actually have a rule against buying shares priced below $5. “What matters are a corporation’s fundamentals, not the stock price. But often, they’re really bad when a company’s stock goes way down in price, and leave you wondering if it’s worth anything at all,” said Benj Gallander, co-author of information newsletter Contra The Heard, who’s been investing in out-of-favour stocks for 15 years with partner Ben Stadelmann. While takeovers are always a possibility, Gallander said companies that really get beaten up usually are not prime targets. “Companies are more likely to buy companies that are going really well, at ridiculous prices, than the ones that are struggling,” he said. What’s making this downturn especially challenging is the tightness of credit, Gallander said. Cash-strapped companies in need of fresh funds are having a harder time with lenders, and investors have cooled to new stock issues. “It used to be a lot easier (for companies) to go to the well and get cash. These days, the competition for funds is so fierce, and not as many people are willing to invest. Investors are more selective. They want to see clean balance sheets, and preferably dividends and distributions, not a lot of debt and a history of losses. Ongoing losses are very dangerous if you don’t have the cash to support it.” Montreal portfolio manager Sebastian van Berkom of van Berkom & Associates, a small-cap specialist, said there are decent stocks in the dollar range, but there are also an awful lot of highly speculative ones. “If someone had the intestinal fortitude to put together the best of these Dollarama stocks into a diversified portfolio of maybe 50-70 names, you’d probably end up doing pretty well. Ten per cent would go bust, 10 per cent would be 10 baggers (grow by tenfold), and the other 80 per cent would do better than the overall market,” he said. But since even the largest and strongest global companies have been battered by this year’s downdraft in equity markets, investors are understandably gravitating to those names, some now at prices unseen in decades. “In this kind of environment, why speculate at the low end when you can buy quality companies at the lowest price they’ve traded at in years? You don’t need to speculate, so why take the risk? That’s why some of the fallen angels have come down so much,” van Berkom said. Some of the deeply discounted companies undoubtedly won’t survive their current woes, Gallander said. The biotech sector, constantly in need of cash tranfusions, is especially vulnerable. “They may have great products in the pipeline,” he said, “but who’ll finance them?” While there is potential upside in some of the names, he considers it a bit early to start bargain-hunting. “I’d be wary of redeploying cash at this point. Even if you pay more (for stocks) in a year, there could be less downside risk if the economy’s in better shape. Personally, I don’t see things coming back for years. There’ll be lots of bargains for a long time.” Here’ are some of the downtrodden, and the challenges they face. AbitibiBowater Inc.: A $35 stock in 2007, AbitibiBowater is now trading around 50 cents. The heavily-indebted newsprint manufacturer recently reported a third-quarter loss of $302 million ($5.23 a share) on flat revenue. Demand is plunging around the world as the newspaper industry contracts in the face of competition from the internet In the U.S. alone, it’s fallen 20 per cent this year. Gallander is one of its unhappy shareholders; his purchase price, prior to the merger with Bowater, was $56.24. “We looked at getting out a few times, didn’t, and got absolutely killed,” he said. “At the current price, there’s huge potential upside, or the possibility in six months that it could be worthless.” Garda World: Investors did not take kindly to the global security firm’s surprise second-quarter loss of $1 million (3 cents a share) and revenue decline of 5.5 per cent. After years of rapid growth by acquisition, Garda – which reports third-quarter results Monday – is talking about selling off part of its business to repay its sizable debt. At about $1.20 a share (down from $26.40 in 2006), “it’s extremely speculative,” van Berkom said. “Rather than offering to buy parts of the business now, competitors may wait to see if it survives and then buy.” Mega Brands: The Montreal-based toy company had a prosperous business until it took over Rose Art Industries of Livingston, N.J., in a $350-million deal in 2005. Since then, it’s taken a huge hit from lawsuits and recalls of the Magnetix toy line it acquired in the Rose Art deal and the stock has plunged from $29.74 a share in 2006 to about 50 cents this week. The company lost $122 million in the third quarter (after writing down $150 million for “goodwill impairment”), just had its credit rating downgraded by Moody’s (which described 2009 prospects as “grim”) and now has to cope with a sharp decline in consumer spending for its peak selling season. Revenue has nonetheless held up relatively well so far, Gallander said, so this one could still be a turnaround candidate. Hart Stores: The smallish department store chain keeps adding to its 89-store Hart and Bargain Giant network in eastern Canada, but same-store sales have been slipping as consumers retrench. Profit in the last quarter was $757,000, down from $1.7 million the previous year. The stock’s dropped even more, closing this week around $1, down from $6.55 in 2006. But Gallander, who bought in at $3.46, still likes the company, which pays a dividend of 10 cents a year. “They’re facing a slowdown, which could hurt the bottom line and the distribution, but so’s everyone else. Few companies can be resilient in this kind of economy.” Groupe Bikini Village: All that remains of the former Boutiques San Francisco and Les Ailes de La Mode empire is 59 swimsuit stores generating quarterly sales of about $13 million and net earnings of less than $1 million. “Our company has come through some challenging times,” president Yves Simard said earlier this year, “and today, we are a stronger company for it.” You wouldn’t know it from the price of the 172 million outstanding shares. Friday, it was 3 cents. The 2008 range has been 10 to 2.5 cents. Boutiques San Francisco was a $32 stock in 2000. Kangaroo Media: It’s had plenty of media coverage for its handheld audio/video devices that allow spectators at NASCAR and Formula One auto races to follow and hear the action more closely, but only one profitable quarter since it went public four years ago. The company generated $2.2 million in sales and rentals in its most recent quarter, but lost $3.4 million (10 cents a share). Loss of Montreal’s Grand Prix race in 2009 won’t help. Shares got as high as $8.19 in 2006 but traded at 5 cents yesterday.. Victhom Human Bionics: Outstanding technology – a prosthetic leg that remarkably replicates human movement – but no significant sales yet spells trouble for the Quebec City company. It had revenue of $531,997 in its most recent quarter, most of it royalty advances, but a net loss of $3.3 million. Investors are losing patience. The stock, which traded at $2 in 2004, has tumbled to 3 cents. Quebecor World: One of the world’s largest commercial printers, it entered creditor protection in Canada and the U.S. last January and seems unlikely to emerge. It lost $63.6 million (35 cents a share) in the most recent quarter on revenue of $1 billion, which pushed the total loss after nine months to $289 million. The stock, as high as $46.09 in 2002, traded yesterday at 4 cents. Unless you buy for a nickel in the hope of getting out at 7 or 8 cents a share, this is probably one to avoid, said Gallander, who prefers to steer clear of companies in creditor protection. Shermag: Asian imports, a contracting U.S. housing market and rapid appreciation of the Canadian dollar pulled the rug out from under the Sherbrooke-based furniture maker, which experienced a 40-per-cent drop in sales in the past year, has lost money for the last 11 quarters and entered creditor protection in May. (It was extended this week to April). A $16 stock in 2003, it was down to 7 cents yesterday. “We looked at Shermag closely before (credit protection), but backed off. They’re good operators, but the way things are now in their business, they just can’t compete,” Gallander said. Railpower Technologies: The manufacturer of hydrid railway locomotives and cranes has a lot of expenses and not many customers, and the economic slowdown won’t help. It lost $7.1 million in the most recent quarter on sales of just $2.9 million. A $6.69 stock in 2005, it traded at 14 cents this week. Mitec Telecom: Revenue has been rising for the designer and manufacturer of components for the wireless telecommunications industry, but it’s still having trouble turning a profit. Through the first half of its current fiscal year, sales grew 63 per cent to $25 million, for a net loss of $1.1 million. The company, which went public in 1996 at $6.50 a share, traded yesterday at 6 cents. Management is doing a commendable job of trying to turn around the company, said Gallander, who has owned the stock for several years. “They seem to be doing the right things, but they’re not out of the woods yet. In normal times, they’d be doing better than now. But the telecom sector, too, will be hit.” pdelean@thegazette.canwest.com © Copyright © The Montreal Gazette

October 13, 2008 By ANDREW ROSS SORKIN Morgan Stanley was racing to salvage a crucial investment from a big Japanese bank on Sunday in an effort to allay growing fears about its future — negotiations so critical to the financial markets that they have drawn in both the Treasury Department and the Japanese government. Morgan Stanley, one of the most storied names on Wall Street, was locked in talks on Sunday to renegotiate its planned $9 billion investment from the Mitsubishi UFJ Financial Group of Japan, according to people involved in the talks. The completion of a deal might help calm markets worldwide, which sank last week because of escalating concerns about the fate of financial institutions like Morgan Stanley. Investors might read the investment as a sign of confidence in the bank’s future. Mitsubishi was pressing for more favorable terms after Morgan Stanley lost nearly half its market value during last week’s stock market plunge. Treasury, however, is not planning to have the United States government take a direct stake in Morgan Stanley as part of a broader effort to stabilize the financial industry and the markets, these people said. Wall Street had buzzed Friday that such a move might be unavoidable. Morgan Stanley is in the midst of the gravest crisis in its 74-year history, even though analysts estimate that the bank has more than $100 billion in capital. Morgan Stanley’s shares price has plunged nearly 82 percent this year, closing at $9.68 on Friday. Last month, Mitsubishi agreed buy about 21 percent of Morgan Stanley. The investment was to be made in the form of $3 billion in common stock, at $25.35 a share, as well as $6 billion in convertible preferred stock with a 10 percent dividend and a conversion price of $31.25 a share. Under the proposed new terms being discussed on Sunday, Mitsubishi would still buy roughly 21 percent of Morgan Stanley, these people said. But all of the investment would be through preferred shares, with a 10 percent annual dividend. Many of those shares would be convertible into common stock, but the Japanese bank was trying to set a conversion price far lower than originally proposed. Morgan Stanley and Mitsubishi have been in constant contact with government officials this weekend, these people said. Mitsubishi and the Japanese government have sought assurances from the Treasury Department that if the United States were to decide to inject money into Morgan Stanley at a later time — a possibility some analysts do not rule out — that such a move would not wipe out preferred shareholders. The Treasurey has indicated that it might use some of the $700 billion bailout package to take direct stakes in banks, but it has not spelled out how it would do so. Investors suffered deep losses when the government effectively nationalized the nation’s largest mortgage finance companies, Fannie Mae and Freddie Mac. It is unclear how far those discussion have gone or whether any such assurances would be forthcoming. Henry M. Paulson Jr., the Treasury Secretary, has pushed both companies to come up with a private-market solution and has indicated that he does not believe that Morgan Stanley needs capital from the United States government. However, he privately hinted to members of both companies that the government would back Morgan Stanley if it came to that, these people said, suggesting that he does not want to repeat the troubles that resulted from allowing Lehman Brothers to go bankrupt. George Soros, the billionaire investor, wrote in a column in The Financial Times that Morgan Stanley needs to be rescued by the U.S. government. “The Treasury should offer to match Mitsubishi’s investment with preferred shares whose conversion price is higher than Mitsubishi’s purchase price,” Mr. Soros wrote. “This will save the Mitsubishi deal and buy time for successfully implementing the recapitalization and mortgage reform programs.” While the negotiations remained fluid, people close to both sides expressed confidence that a deal would be struck. The companies are hoping to announce the terms of the transaction and Mitsubishi’s commitment to complete the deal by Monday morning, before the stock market open in the United States. Over the past week, Mitsubishi and Morgan Stanley have issued statements insisting that they planned to complete the deal on the original terms. Spokespeople for Mitsubishi and Morgan Stanley declined to comment on Sunday. Morgan Stanley converted itself into a bank holding company one week after Lehman Brothers collapsed last month. That business model makes it easier for Morgan Stanley to borrow from the Federal Reserve. The firm has also lowered its gross leverage levels to under 20 times. Mitsubishi has large ambitions for expansion into the United States. It recently purchased the remaining shares of UnionBanCal, a bank in California, for a premium over its share price. Mitsubishi had owned the majority of UnionBanCal since 1996. Edmund L. Andrews and Eric Dash contributed reporting. http://www.nytimes.com/2008/10/13/business/13morgan.html?_r=1&hp&oref=slogin

Tunisair May Sell Stake as Country Divests Assets (Update2) By Mahmoud Kassem June 5 (Bloomberg) -- Tunisair, the national airline of Tunisia, may sell a 15 percent stake as the North African country disposes of state assets amid an equities boom. ``We might sell more shares to a strategic investor, but the government will always want to hold a controlling stake,'' Adel Gaida, chief financial officer of Tunisair, or Societe Tunisienne de l'Air, said in an interview yesterday in London. ``We have been thinking of doing this for some time, though we don't have a timetable.'' Tunisia is selling assets to attract investment as buyers, particularly from the oil-rich Persian Gulf region, pour money into a country that isn't on emerging-market equity indexes and is commonly classed as a ``frontier market.'' Tunisia's main stock index, the Tunindex, has advanced 13 percent this year, making it the best-performing index in North Africa. Tunisair rose 0.8 percent to 4.05 dinars in Tunis trading as of 11:50 a.m. The stock has gained 6.6 percent this year, giving the company a market value of 329 million Tunisian dinars ($278 million). The airline serves more than 50 destinations in 25 countries and carried 3.5 million passengers last year. The government holds 74 percent. Companies on the Tunindex have one of the cheapest average price-to-earnings ratios in the Middle East at 13 times estimated earnings. The Dow Jones Arabia Titans 50 Index, a measure of 50 Arab stocks in 10 countries, trades at 21 times estimated earnings. The Tunisian government raised as much as $2.25 billion from the sale of a 35 percent stake in Telecom Tunisie, the country's largest telephone company, in 2006. Tunisair Expansion Tunisair is expanding in Africa and adding trans-Atlantic and Asian destinations, Gaida said. The carrier owns a 51 percent stake in Air Mauritania, which it formed as a joint venture in December 2006. Air France-KLM Group has a 5.6 percent stake in Tunisair, while 20 percent of shares trade freely. ``We are planning to add New York, Montreal, Beijing and Tokyo on our list of destinations, but that won't happen until we get our new fleet starting from 2011 because we would need A350s for the long haul,'' Gaida said. The airline's primary business is flying vacationers from Europe to beaches in Tunis. Airbus SAS, the world's largest planemaker, said on April 29 that Tunisair agreed to a 16-plane order valued at as much as $2 billion at list prices. Tunisia plans to acquire three twin- aisle A350-800 airliners, three A330-200s and 10 single-aisle A320s from the Toulouse, France-based manufacturer. ``We prefer to stick to one manufacturer because it saves us costs in maintenance,'' Gaida said. ``We will pay 10 percent of the cost of the new Airbuses and the remainder we will seek credit for.'' Tunisair's revenue rose 12 percent in the first quarter, compared with the same period a year ago. The company may distribute a dividend on 2007 profit this year, Gaida said. To contact the reporter on this story: Mahmoud Kassem in London at mkassem1@bloomberg.net Last Updated: June 5, 2008 06:06 EDT http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXYjvLDxX8pg