These are stories Report on Business is following Monday, April 22, 2013.
Counterfeiting on decline
Canadian authorities are making huge strides in foiling counterfeiters, helped along by the introduction of the country’s new polymer money.
According to the latest information released today by the Bank of Canada, counterfeiting is at its lowest level in years.
In terms of straight numbers of bank notes, counterfeit bills detected last year fell to 28 per million, down from 34 in 2011, 35 in 2010, 45 in 2009 and 76 in 2008.
The number is also well down from the 470 in 2004, according to the central bank’s annual report, and marks the lowest since the early 1990s.
In terms of the face value of those notes, the amount fell last year to just $1.6-million, down from $2.6-million in 2011 and 2010, $3.4-million in 2009, and $6-million in 2008.
Similar to the drop in straight numbers, the face value is markedly below the $13-million of 2004.
“The security features in the new notes are a significant advance in the bank’s ongoing efforts to keep the number of counterfeit notes detected in circulation well below a target of 50 counterfeits per million genuine notes,” the Bank of Canada said.
Besides the fact that the currency is now polymer, compared to the earlier cotton-based paper version, the new notes come with see-through areas, raised ink and metallic illustrations.
There are now polymer versions of the $100, $50 and $20 notes, while new $10 and $5 bills will be introduced this year.
There’s more than just that, of course, including heightened international co-operation.
(For the Bank of Canada's numbers, see the accompanying infographic or click here.)
- Funny money: How counterfeiting led to a major overhaul of Canada's money
- Bank of Canada puts plastic $100 bill into circulation
- Canada's new plastic banknotes will be nearly impossible to fake
- Bank of Canada report
Speculative bets against loonie climb
Currency speculators are betting heavily against the Canadian dollar.
The latest numbers from the U.S. Commodities Futures Trading Commission show the value of the short positions against the loonie, as the Canadian dollar coin is known, have jumped $400-million (U.S.) to $7.4-billion.
That reading, released Friday but marking the levels of last Tuesday, show an increasingly bearish view of the currency among non-commercial, or speculative, interests.
And among some observers, it’s an odd development.
“To be very frank, it’s slightly strange,” said Sébastien Galy of Société Générale in New York.
While there are concerns about the state of the Canadian housing market, and record levels of consumer debt, the economic fundamentals and the outlook for the U.S. economy don’t support such a dim view while other commodity-based currencies are looking brighter.
“Relative to history, the CAD, GBP and JPY short positions are extreme,” said Mr. Galy, referring to the Canadian, British and Japanese currencies by their symbols.
- Loonie rises, risk appetite improves as G20 endorses Japan monetary policy
- Shop while you can: Canadian dollar to dip to 90 cents over 5 years, BMO says
Shares of Netflix Inc. surged in after-hours action today after a rebound in first-quarter earnings.
And it can thank Kevin Spacey for some of the gains.
Netflix earned $2.7-million (U.S.) or 5 cents a share in the quarter, a turnaround from a loss of $4.6-million or 8 cents a year earlier, as sales climbed 18 per cent to just over $1-billion.
Of note, Netflix drew some 2 million new customers, beating its projections, partly on the Netflix series House of Cards with Mr. Spacey.
Rogers Communications Inc. posted a profit gain in its latest quarter, boasting more smartphone activations and cable TV packages, The Globe and Mail’s Steve Ladurantaye reports.
Rogers earned $353-million (Canadian) compared to $324-million a year earlier, and revenue climbed 3 per cent to $3.-billion.
Wireless network revenue rose 4 per cent, and cable climbed by the same percentage.
Caterpillar cuts outlook
If you need further proof of the troubles in the mining sector, take a look at Caterpillar Inc.’s outlook today.
The company, whose first-quarter earnings report is significant for Canada because of the country’s reliance on resources and the fact that Toronto is such a home for mining finance, painted a somewhat bleaker picture, citing the mining sector in particular.
“While expectations for construction industries and power systems are similar to our previous outlook, our expectations for mining have decreased significantly,” said chief executive officer Doug Oberhelman.
“Our revised 2013 outlook reflects a sales decline of about 50 per cent from 2012 for traditional Cat machines used in mining and a decline of about 15 per cent for sales of machines from our Bucyrus acquisition.”
Caterpillar forecast revenue of between $57-billion (U.S.) and $61-billion for the year, down from the earlier range of $60-billion to $68-billion.
Its projection for earnings per share of about $7, compared to a range of $7 to $9, is based on the middle of the forecast for revenues.
In the first quarter, Caterpillar earned $880-million or $1.31 a share, compared to $1.6-billion or $2.37 a year earlier, while revenue slipped to $13.2-billion from $16-billion.
Gold price on rise
The price of gold rebounded today – it’s now sitting back above $1,400 (U.S.) an ounce – after a dramatic decline and amid tremendous uncertainty for the outlook.
“Gold continues to edge higher and once again has a $1,400 handle, but movements higher are painfully slow in comparison to the aggressive down days,” said market analyst Alastair McCaig of IG in London.
“It will take some time for either the trend or traders' sentiment to believe we are due a break from this bearish momentum.”
Several forecasters believe the run in gold is over after last week’s collapse, but others don’t, and believe it will resume its rise.
“We really need to get back into the $1,500s to say that there’s something more substantial taking place,” said Tim Riddell, the chief of ANZ Global Markets Research, according to the Reuters news agency.
“The close above $1,400 may have taken the negative pressure out of gold in the near term. A close below that level will heighten the risks of new lows.”
- Eric Sprott: Can the gold hawk find magic after the commodities crash?
- Investors look for Barrick's 'Plan B' as gold prices tank
- Where eight renowned investors think commodity prices are going
- China's cooldown: Charting a new path for commodities
- RBC cuts outlook on gold price, producers
Air Canada heads for loss
Air Canada estimates a bigger operating loss in the first quarter, releasing preliminary results today with a view to exploring debt-financing options.
Its stock plunged in the wake of the report.
Canada’s largest air carrier expects an operating loss of $106-million compared with an operating loss of $91-million in the first quarter of 2012, The Globe and Mail's Bertrand Marotte reports.
On an adjusted basis, the airline said it anticipates a net loss for the quarter of $143-million, compared with $162-million in the year-earlier period.
The airline said it’s releasing preliminary results “pursuant to its obligations under applicable Canadian securities laws to enable it to disclose this information in meetings as it explores a range of debt financing opportunities.”
Some of Canada’s smaller specialty channels want to cut the amount they spend on Canadian programming, arguing they are being driven out of business by federal rules that force them to spend millions of dollars on productions regardless of their channels’ profitability, The Globe and Mail's Steve Ladurantaye reports.
The channels hope to convince the Canadian Radio-television and Telecommunications Commission they are sacrificing too large a share of their revenues each year on Canadian content, and that unless they can get some relief, they may not survive.
Streetwise (for subscribers)
- M&A activity plunges in first quarter
- Daunting challenges, heavy scrutiny await next CMHC leaders
- Mega U.S. takeovers roar back to life
- Investment in home building takes plunge across Canada
- Clouds emerge on U.S. economic horizon
- Surgical versus blunt policy tools
ROB Insight (for subscribers)
- Lower fuel costs light a fire under consumers
- Reservoir quality seen as major hurdle in oil sands
- Barclays looks to the assembly line to boost profits
- CN beats profit forecasts as earnings report published prematurely
- Top U.S. regulator wants Libor, Euribor scrapped
- Spain's population falls for first time since 1940s as immigrants flee crisis
- Obama set to okay pipeline, former insider says, as poll shows support
- Merkel: Euro members must be ready to cede sovereignty
- Former Biovail executives slam Bioniche board, management
- Halliburton in spill settlement talks, takes $1-billion hit
- Hasbro beats forecasts despite wider loss on charges, foreign exchange
|AC.B-T Air Canada||7.30||
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|CAT-N Caterpillar Inc.||102.83||
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|NFLX-Q Netflix Inc.||345.74||
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|RCI.B-T Rogers Communications||44.27||
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|CADUSD-FX Canadian Dollar/U.S. Dollar||0.907||
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