Business news from Metronews.ca

Sino-Forest files for bankruptcy protection

The Canadian Press — Fri, 30 Mar 2012 12:29:00 -0400

TORONTO - Troubled Chinese timberland company Sino-Forest Corp. (TSX:TRE) is filing for bankruptcy protection and putting itself up for sale.

Sino Forest says if it doesn't receive a suitable takeover offer, the company will implement a restructuring plan that will see its lenders take control.

Sino-Forest was accused of being a massive fraud last year and faces investigations by regulators and the police.

Though the company has denied the allegations, its stock has been halted for months on the Toronto Stock Exchange.

Sino-Forest also says it is pursuing a lawsuit against Muddy Waters Research and its research director Carson Block, as well as others who have accused the company of fraud.

The company is accusing Muddy Waters and Block of making defamatory statements and is seeking $4 billion and the recovery of profits made by the short seller and others.

Foreign exchange rates at midday

The Canadian Press — Fri, 30 Mar 2012 12:17:00 -0400

TORONTO - These are indicative wholesale rates for foreign currency provided by the Bank of Montreal at midday on Friday. Please inquire at any branch for cash rates. Quotations in Canadian funds.

Euro

Thailand baht

0.9991

Oil above US$103 after hitting 6-week low

The Associated Press — Fri, 30 Mar 2012 12:12:00 -0400

NEW YORK, N.Y. - Oil prices are levelling off on signs that the U.S. and other countries could soon release some emergency reserves to keep prices from rising.

Benchmark oil for May delivery was up 43 cents to US$103.21 a barrel in late morning trading on the New York Mercantile Exchange. The contract dived $2.63 to settle at $102.78 per barrel in New York on Thursday.

French Prime Minister Francois Fillon said Thursday that there's a "good chance" that the U.S. and Europe will agree to release some of their oil reserves. Investors are mulling how much the additional supply would lower oil prices, which have jumped from $75 in October.

"A strategic stock release of some sort seems highly likely over the next few months," Barclays Capital said in a report. "A large part of a potential stock release is already being priced in and has been one of the key deterrents from prices moving higher."

Some analysts expect crude has peaked for the year as slower global economic growth undermines demand for oil.

Capital Economics expects Brent crude to fall to $95 by the end of the year and $85 in 2013.

"The global economic recovery is set to disappoint," Capital Economics said in a report. "Europe is facing a deep recession, which would only be made worse if oil prices stay elevated for much longer."

___

AP writer Pablo Gorondi contributed to this report.

London FT-100 close: 5,768.45, up 26.42 points

The Canadian Press — Fri, 30 Mar 2012 12:03:00 -0400

LONDON, England - The Financial Times Index of 100 industrials closed on Friday at 5,768.45, up 26.42 points.

Noon TSXV stands at 1,555.07, up 5.31 points

The Canadian Press — Fri, 30 Mar 2012 12:02:00 -0400

TORONTO - The TSX Venture Exchange was trading at 1,555.07, up 5.31 points on Friday. The volume at noon was 103.7 million shares.

TSX advances as commodities recover

Malcolm Morrison, The Canadian Press — Fri, 30 Mar 2012 12:02:00 -0400

TORONTO - The Toronto stock market was higher Friday morning as traders bought up stocks beaten down by three straight days of losses triggered by another round of concern about the pace of the global recovery.

The S&P/TSX composite index gained 51.38 points to 12,390.74 and the TSX Venture Exchange was up 3.94 points to 1,553.7.

Research In Motion Ltd. (TSX:RIM) shares were up 43 cents to $14.12 after its chief executive said the BlackBerry maker needs substantial change after posting a US$125-million quarterly loss. RIM's revenue fell $1.4 billion to $4.2 billion as the company loses market share to Apple’s iPhone and devices using Google’s Android operating system.

The Canadian dollar slipped 0.31 of a cent to 100.02 cents US, a day after the Conservative government announced it is trimming $5.2 billion in annual federal spending and cutting thousands of public sector jobs while raising the age of eligibility for old age security to 67 from 65, starting a decade from now.

Traders also took in data showing that the economy grew by 0.1 per cent in January, which was in line with expectations.

Statistics Canada said that gains in manufacturing were partly offset by a decline in oil and gas extraction in January.

U.S. markets were off the best levels of the session after a regional manufacturing survey from the U.S. raised further concerns about the pace of the global recovery.

The Chicago purchasing managers index, a snapshot of manufacturing in the Midwest, decelerated in March but marked its fifth straight month above 60. The PMI fell to 62.2 from 64 in February, against estimates of a reading of 63.6.

The Dow Jones industrials was ahead 31.1 points to 13,176.92.

The Nasdaq composite index was down 3.78 points to 3,091.58 and the S&P 500 index rose 2.4 points to 1,405.68.

Other economic data showed that U.S. consumers boosted their spending in February by the most in seven months, up 0.8 per cent. But Americans’ income only grew a slight 0.2 per cent and the saving rate fell to its lowest point in more than two years.

North American stock markets have lost ground this week as a series of economic reports, including disappointing data on consumer confidence and durable goods orders, raised concerns about the pace of the American economic revival. Traders also worried that stock market gains since the lows of last October may not be justified by the pace of the global economic recovery.

"Since October, we had this tremendous move and we have been pretty positive," said Robert Gorman, chief portfolio strategist at TD Waterhouse.

From early October to early March, the TSX gained 13.6 per cent.

"But I must say when you have that big a move, it’s typically two steps forward and one back and so, we’re probably going to have some kind of retrenchment here.?"

Commodity prices and in turn resource stocks particularly suffered because of concerns that demand for oil and metals could falter.

On Friday, the May crude contract on the New York Mercantile Exchange climbed 45 cents to US$103.23 after losing more than $4 over the last two sessions. The TSX energy sector was up 0.35 per cent as Canadian Natural Resources (TSX:CNQ) climbed 44 cents to $32.90.

The base metals sector was ahead 0.31 per cent while copper rose three cents to US$3.82 a pound after losing over nine cents earlier in the week. Teck Resources (TSX:TCK.B) climbed 55 cents to $35.25.

The gold sector gained 0.7 per cent as bullion ran up $9.30 to US$1,661.50. Goldcorp Inc. (TSX:G) moved 57 cents higher to $44.88.

The information technology sector was the leading advancer with MacDonald Dettwiler and Associates (TSX:MDA) ahead $1.19 to $45.59.

European markets were positive with London's FTSE ahead 0.35 per cent, Frankfurt's DAX gained 0.56 per cent and the Paris CAC 40 rose 0.96 per cent.

Earlier in Asia, sentiment in stock markets was hurt by news that Japan’s factory production fell a worse-than-expected 1.2 per cent in February — its first decline in three months — as demand for exports weakened. The Nikkei 225 index in Tokyo fell 0.3 per cent.

Hong Kong’s Hang Seng fell 0.3 per cent while mainland Chinese shares were mixed. The benchmark Shanghai Composite Index gained 0.5 per cent while the Shenzhen Composite Index lost 0.4 per cent.

Loonie down amid rising commodities

Malcolm Morrison, The Canadian Press — Fri, 30 Mar 2012 11:45:00 -0400

TORONTO - The Canadian dollar was slightly lower near midday Friday amid higher commodity prices and a commitment from the federal government to make deep spending cuts.

The currency was down 0.14 of a cent to 100.19 cents US as traders also took in data showing that the economy grew by 0.1 per cent in January, which was in line with expectations.

Statistics Canada said that gains in manufacturing were partly offset by a decline in oil and gas extraction in January.

On Thursday, the Conservative government announced it is trimming $5.2 billion in annual federal spending and cutting thousands of public sector jobs while raising the age of eligibility for old age security to 67 from 65, starting a decade from now.

Despite the slight dip in the loonie on currency markets, analysts said there were plenty of positive aspects about the budget.

"The real news is that Canada will now balance its books by (the fiscal year 2015-2016), a full year earlier than originally outlined," said Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities.

"There is also some scope to potentially close the deficit in (the fiscal year 2014-2015), depending on the prevailing macro environment and level of expenditure cuts. Also, we would make the crucial observation that this budget not only paints a better fiscal trajectory, but demonstrates exactly how it is going to be achieved."

Commodity prices moved higher after losing ground this week as a series of economic reports, including disappointing data on consumer confidence and durable goods orders, raised concerns about the pace of the American economic revival. Prices sank because of concerns that demand for oil and metals could falter.

On Friday, the May crude contract on the New York Mercantile Exchange climbed 42 cents to US$103.20 after falling more than $4 over the last two sessions.

Metal prices also advanced as gold gained $9.20 to US$1,661.40 while copper rose three cents to US$3.82 a pound after losing over nine cents earlier in the week.

Cdn dollar: at par with US at 11 a.m. ET

The Canadian Press — Fri, 30 Mar 2012 11:01:00 -0400

TORONTO - The Canadian dollar is trading at parity this morning, down 0.33 of a cent from Thursday's close.

The U.S. dollar is trading at par, up 0.33 of a cent.

Pound sterling was worth C$1.5976, up 0.84 of a cent, and US$1.5976, up 0.31 cents.

The euro was at C$1.3315, up 0.65 of a cent.

Quotations provided by the BMO Capital Markets.

Real domestic product rose in January

Julian Beltrame, The Canadian Press — Fri, 30 Mar 2012 10:39:00 -0400

OTTAWA - Canada's economy started off the year on positive, if tentative, footing in January, registering a modest 0.1 per cent gross domestic product gain after the strong handoff from the end of year.

The increase matched expectations, although markets were pleasantly surprised by an upward revision of a tenth of a point for the December reading to 0.5 per cent.

Analysts were initially mixed on the portents going forward, with some expecting better results in upcoming months.

"It was weaker, but if you take the last two months together and average them up, you get an economy growing by 0.3 per cent monthly and that's actually a solid performance," said TD Bank chief economist Craig Alexander.

Alexander said January's GDP reading doesn't change his view of the economy for the year. He recently upgraded his outlook for the year to 2.2 per cent growth, up half a point from his December estimate, mostly because of the good news coming out of Europe and the uptick in the United States.

Scotiabank's Derek Holt, however, worried about the softer details in the report, with key sector such as mining and oil extraction, forestry and fishing, construction and public administration falling back.

The biggest contribution came from surprising strength in utilities and manufacturing, particularly auto production.

Some of the setback in key sectors may have been due to temporary factors. Statistics Canada cited the Rio Tinto aluminum smelter lockout in Alma, Que., as contributing to the decline in primary metal sales. The Caterpillar lock-out former Electro Motive employees at London, Ont., also likely played a role, said Erin Weir, an economist with the United Steelworkers union.

In the details of the Statistics Canada report, manufacturing rose 0.7 per cent in January, a fifth-straight monthly increase.

Production of durable goods rose 0.8 per cent with higher output of fabricated metal products, transportation equipment and wood products.

There were also increases in the finance and insurance sector, utilities, wholesale trade, some tourism-related industries and the public sector.

Decreases were recorded in forestry and logging, arts, entertainment and recreation as well as in construction.

Oil and gas extraction declined 0.9 per cent as a notable drop in natural gas extraction outweighed a gain in crude petroleum production.

Production of non-durable goods advanced 0.6 per cent on the strength of chemical and food production.

The finance and insurance sector rose 0.4 per cent, mainly as a result of an increase in management activity for mutual funds, residential mortgages and business loans.

Wholesale trade increased while retail trade was flat.

ICE Futures Cda morning prices mixed

The Canadian Press — Fri, 30 Mar 2012 10:23:00 -0400

WINNIPEG - Prices were mixed in mid-morning trading at ICE Futures Canada on Friday.

Canola: May '12 $14.40 higher $617.70; July '12 $15.0 higher $616.20; Nov.'12 $14.30 higher $570.30; Jan '13 $14.10 higher $574.30; March '13 $14.50 higher $577.50; May '13 $13.80 higher $577.80; July '13 $16.20 higher $570.10; Nov. '13 $0.60 lower $533.70; Jan. '14 $5.70 lower $534.30; March '14 $5.70 lower $534.30; May '14 $5.70 lower $534.30.

Barley (Western): May '12 unchanged $229.00; July '12 unchanged $232.00; Oct. '12 unchanged $211.00; Dec. '12 unchanged $213.00; March '13 unchanged $216.00; May '13 unchanged $218.00; July '13 unchanged $218.00; Oct. '13 unchanged $218.00; Dec '13 unchanged $218.00; March '14 unchanged $218.00.