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Good news travels north
By David Berman
For some Canadian banks, the strong job gains reported by the U.S. Labour Department on Friday are pure joy.
More jobs suggest a stronger U.S. economy and more borrowers, but they also point the way toward higher interest rates – and that's a potential boon to Toronto-Dominion Bank, Royal Bank of Canada and Bank of Montreal because of their large and growing U.S. operations.
The Labour Department said that U.S. employers added 242,000 workers in February, which is higher than expected. The department also bumped up the gains for the previous two months by 30,000.
The improvements come at a time when many observers have been doubting the strength of the U.S. economy. They appear to justify the Federal Reserve's rate hike in December and increase the likelihood of further rate hikes later this year.
"As far as the Fed is concerned, it is already seeing a clear acceleration in core price inflation, so it can't delay raising interest rates for much longer. A June rate hike is coming," Paul Ashworth, chief U.S. economist at Capital Economics, said in a note.
That's a big relief to banks. Earlier this year, they were weighing the possibility of rate cuts, perhaps pushing them into negative territory.
Trudeau: Google 'Flaherty' for tech VC advice
By Sean Silcoff
Canada's technology sector has not had a friend in power like Jim Flaherty since the late finance minister left government two years ago. The Liberal government of Justin Trudeau talks about boosting innovation but, so far, the Prime Minister has shared scant details of his agenda.
It's one thing to do photo ops at Google's Waterloo, Ont., office and declare at the World Economic Forum in Davos that Canadians are resourceful. Delivering an actual innovation strategy involves more than spewing buzzwords and broad statements.
The new government can learn much from the legacy of the late Conservative finance minister if it's looking for concrete ideas to foster innovation.
Today: OSC weighs Catalyst's Corus claim
By James Bradshaw
The Ontario Securities Commission is considering an eleventh-hour application from an activist shareholder seeking to block Corus Entertainment's proposed $2.65-billion acquisition of Shaw Media.
Catalyst Capital Group Inc., a private equity firm that bought 0.4 per cent of Corus's class B shares after the transaction was announced, has been waging a public campaign trying to convince investors to vote down the deal, alleging they deserve greater disclosure and that Corus is overpaying for the assets.
Corus disputes Catalyst's claims, which it says are "deeply misleading," and hopes to go ahead with a minority shareholder vote on March 9. But lawyers for Catalyst filed a last-minute application with the OSC early Friday, and the Commission heard procedural arguments Friday afternoon.
Robert Staley, a lawyer for Catalyst, is asking the OSC to force Corus to "amend and correct its disclosures," and to delay the vote. Counsel for Corus, Larry Lowenstein, contends that Catalyst has failed to rally support from other shareholders, and a full OSC hearing would "elevate a nakedly private interest into the public interest."
The OSC plans to hear arguments and issue its decision on Monday.
ON THE MOVE
Independent full-service brokerage firm Mackie Research Capital Corp. has hired a pair of Bay Street veterans.
Jeff Crane starts on Monday, as head of institutional equity sales. He was previously with Dundee Securities in a senior sales role. Earlier in his career, he worked at Macquarie Capital Markets and National Bank Financial.
David Greifenberger is also joining Mackie, as head of mining investment banking. He started his investment banking career with First Marathon Securities in 1994. Through the years, Mr. Greifenberger also put in stints at Canaccord Capital (now Canaccord Genuity Group) and Raymond James.
LAST WEEK'S BIG DEALS
Fairfax Financial Holdings Ltd.'s latest financing didn't sell as planned, forcing the underwriters to absorb millions of dollars in potential losses from unsold shares. Story
McKesson who? The American company buying Rexall for $3-billion barely registers with the average Canadian, but McKesson Corp. – with $179-billion (U.S.) in revenue in 2015 – is a big name in the pharmacy world and has been on a buying spree here for the past eight years. Story
Canaccord Genuity Group Inc. plans to delist its shares from the London Stock Exchange. The last day of trading will be March 31. Story
Michael Sabia says cash-strapped governments should take advantage of institutional investors' fondness for infrastructure deals amid a tough investment climate. Story
Other pension fund leaders agree. Story
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