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ROB Insight

Fresh, focused analysis of today's business news
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Entry archive:

Credit default swaps reveal heightened investor concern over banks

IAN McGUGAN

The financial markets’ favourite fear meter is flashing warning signals about the health of global banks.

The level of anxiety remains below the outright panic of the financial crisis, but it has soared in recent days as investors ponder the potential impact of a slowing global economy and flattening yield curves on banks’ bottom lines.

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National Research Council takes warlike stand to spur innovation

BARRIE McKENNA

A good war might be just what the country needs to revive its sputtering innovation performance.

The Second World War, after all, spawned a golden age of innovation in Canada, producing key advances in nuclear energy, aerospace and communications.

It’s time to bring the same sense of national purpose to the major economic challenges of 2016 – from creating smarter factories to curbing greenhouse gas emissions and containing rising health care costs, according to John McDougall, president of the National Research Council and its network of labs and scientists.

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Shaw’s focus on distribution reopens content debate

CHRISTINE DOBBY

With Shaw Communications Inc. planning a move into wireless services and an exit from its media business, the value of Canadian telecommunications providers owning content is once again up for debate.

During the past decade, most of Canada’s biggest telecom players got even bigger as they acquired both specialty channels and conventional television networks. Rogers Communications Inc. picked up CITY-TV, BCE Inc. bought CTV and Shaw rescued Global from the wreckage of CanWest Global Communications Corp.

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Can Alphabet, already the world’s most valuable firm, hit $1,000?

SHANE DINGMAN

There are almost too many data points to pull out of Alphabet Inc.’s fourth-quarter earnings report that might help explain the stock’s subsequent rise to making it the most valuable public company in the world by market capitalization.

Revenue at the company formerly known as Google was higher than expected, rising 19 per cent year over year to $17.3-billion (U.S.); share earnings hit $8.67, beating consensus estimates of $8.08. Users are up, margins are up, key competitive categories (such as mobile ads) showed strength. When shares dropped below $500 in 2015, that was a steal. And there may be good reasons to invest now that the share price has come close to $800.

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Trudeau keeps digging himself deeper into a resources hole

GWYN MORGAN

Prime Minister Justin Trudeau has a penchant for clever quips. He seems to especially relish combining them with digs at Stephen Harper, like his speech in Davos earlier this month, where he said, “My predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness.”

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Oil patch producers brace for 'ugly' results on low prices

JEFF LEWIS

Canada’s oil industry is about to spring a gusher of red ink.

Fourth-quarter results in the oil patch are expected to be dismal, marred by steep losses, asset impairments and production cuts as major producers struggle with U.S. crude prices that have cratered.

Benchmark West Texas intermediate (WTI) oil skidded even further in recent weeks, sliding below $27 (U.S.) before snapping back to more than $30 last week on talk of a possible deal to curb oversupply in the market.

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Alberta’s new oil and gas royalty system reveals a more pragmatic NDP

JEFFREY JONES

Alberta Premier Rachel Notley has rolled out an oil and gas royalty system she could never have envisioned before her election last May – one that oil and gas producers like.

It represents one more example of how the NDP in power is a much different – and more pragmatic – group of leftists than the NDP in opposition, when Ms. Notley was adamant that Albertans were being short-changed in the energy equation.

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Canadian lumber in U.S. crosshairs again

BARRIE McKENNA

The cheap Canadian dollar could prove very costly to one of the biggest beneficiaries of a weak currency.

Canada’s forest products industry, and particularly lumber exporters, have it good right now.

U.S. demand for new houses is strong and gathering momentum. The 71-cent (U.S.) loonie makes everything cheaper for Canadian lumber producers compared with their U.S. rivals, most notably labour, energy and timber. Their revenues, meanwhile, are conveniently logged in U.S. dollars, swelling their profits. And, for the first time since 2006, the U.S. border is wide open to Canadian lumber. An agreement that limited U.S.-bound exports expired in October.

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Google’s U.K. tax avoidance a threat to its success

CARL MORTISHED

You have heard about currency risk, market risk and plain old business risk, but for bosses of multinational companies, there is a new terror looming on the horizon: fiscal risk. We are not talking about see-sawing tax rates but the risk that the chairman will be subjected to a public water boarding until his company agrees to cough up some random millions of dollars in back taxes, money that his advisers insist is not owed.

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Will Apple’s future growth rely on hardware or services?

SHANE DINGMAN

As Apple shares continue to trade down after weak first-quarter results, the question analysts and investors are grappling with is whether Apple’s future relies entirely on renewed iPhone sales growth, or on an alternative model like services.

Apple Inc. stock was dragged down on the Tuesday earnings report that showed iPhone sales grew less than 1 per cent year over year. It closed down 6.55 per cent on Wednesday, but the stock has fallen 20 per cent in the past six months.

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Gold stands out as bright spot in Canadian mining industry

IAN McGUGAN

The weak loonie is providing a powerful boost for many Canadian gold miners.

The dollar’s long decline has already gone a long way to cushioning the impact of falling bullion prices on Canadian producers. In recent months, its further weakening has added to the cost advantage of domestic producers.

The buoyant effect of the low Canadian dollar has combined with a rise in the gold price over recent weeks to drive gold mining stocks listed on the Toronto Stock Exchange to a 5.8-per-cent gain so far this year.

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Mining industry rings in 2016 with fresh round of writedowns

IAN McGUGAN

Miners are marking the new year with a fresh round of writedowns, underlining the lingering impact of last year’s plunge in commodity prices and raising troubling questions about when the sinking industry might finally find a bottom.

Anglo American Platinum Ltd., the world’s top platinum miner, got the week off to an ominous start when the South African company announced on Monday that it was knocking down the paper value of its assets by $851-million (U.S.), an amount equal to more than a quarter of the company’s book value.

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A new world is looming for Big Oil

CARL MORTISHED

It’s time to worry about the end of oil, not the peaking of oil, which will probably never happen, at least not in our lifetimes. The ticklish issue that is becoming a nagging worry is the one about demand for liquid hydrocarbons. We know that the Peak Oil Jeremiahs were embarrassingly wrong in calling the last barrels for America’s onshore oil reserves. But what if Big Oil is wrong in its confident assumption that annual incremental increases in global demand for crude oil will continue for the next few decades?

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David Bowie was more than a great artist, he was a marketing genius

CARL MORTISHED

It’s one thing to write your own epitaph or even to choreograph your own funeral but it takes a special kind of person to make death a multimedia, multiplatform global commercial launch. David Bowie did that and because he was one of the greatest artists of the late 20th century, he orchestrated his passing with verve, drama, pathos and great personal insight.

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Corus, Wind deals point Shaw in a new direction

CHRISTINE DOBBY

In the span of one month, Shaw Communications Inc. has executed a dramatic transformation of its business with a renewed focus on its legacy role as a communications provider.

Wednesday’s news that it is now shedding its broadcast media assets in a $2.65-billion sale to Corus Entertainment Inc. came four weeks after Shaw said it will pay $1.6-billion to acquire startup wireless carrier Wind Mobile Corp.

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CRTC’s blessing of Corus deal will be all about survival

SIMON HOUPT

Doug Murphy’s blood pressure is going to be just fine.

When the chief executive officer of Corus Entertainment Inc. announced on Wednesday morning that his company would be acquiring Shaw Media for $2.65-billion, he declared: “The time is right to unite these two strong media companies. With the addition of Shaw Media, we will have the competitive scale, the brands, the content and the team to accelerate our growth.”

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Alberta’s history shows economic downturns don’t last forever

JEFFREY JONES

A grainy TV news item from a previous economic bust in Alberta found new life on social media this week. it’s worth a look, and not just for the hairstyles.

The CBC report from the 1980s showed Calgary business leaders kicking off a campaign to try to lift the city out of its economic funk with a toe-tapping jingle, and a slogan: “Yes We Can!” (This predated U.S. President Barack Obama’s first campaign slogan by a quarter-century.)

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