These are stories Report on Business is following Tuesday, July 30, 2013.
How the Bank of England began
The Bank of England today provides a fascinating look at its roots, the days when everyone from knights and “spinsters” to ironmongers and “gentlemen” held its stock.
The storied institution, now the realm of former Bank of Canada governor Mark Carney, was formed in 1694, with the aim of raising £1.2-million to finance the French wars. The shares were held privately until 1946.
According to the Bank of England, some 1,520 people took part in the initial subscription, with amounts from £25 to the £10,000 of King William and Queen Mary.
The list is a history lesson in the times. “Gentleman” Mordecai Abbott, for example, went in for £1,000, while mathematician James Atkinson took £100, “malster” Joseph Aunger £1,000, and “widow” Emma Baker £500. Two women who appear to be “spinster” sisters, Frances and Grace Barnham, took £100 each.
Then there’s “skinner” Richard Atkinson, at £200, “girdler” Marmaduke Bludder, Renea Chambrelan, whose claim to fame is that she was “sister of Joseph Chambrelan,” “wharfinger” John Clapham, and John Dennett, a “citizen and fishmonger of London.”
The central bank also published minutes of the meetings of the Court of Directors, who met then to discuss administrative issues. These meetings continue today.
Potash sector in turmoil
Shares of potash-related companies are plunging in premarket action this morning after a major Russian producer broke up an alliance and projected a sharp drop in prices.
Shares of Potash Corp. of Saskatchewan and The Mosaic Co. sank by more than 20 per cent at one point, while agribusiness Agrium Inc. slipped by 12 per cent, The Globe and Mail's Bertrand Marotte reports.
This followed an announcement by Uralkali that it was breaking up its alliance with a Belarus affiliate, meaning the collapse of Belarus Potash Co., their exporting group.
With that collapse, Canpotex, the exporting arm of Potash Corp., Agrium and Mosaic, becomes the major global player.
Belarus Potash Co. and Canpotex combined represent about 70 per cent of the global potash market, and both have traditionally set identical prices.
Uralkali projected potash prices could fall to $300 (U.S.) a tonne later this year from $400 now.
- Russia pulls out of cartel, potash prices expected to plunge
- Scott Barlow in ROB Insight (for subscribers): Potash investors should have seen crash coming
- Potash Corp. slashes profit outlook
TD takes insurance hit
After being slammed by catastrophic weather events, and foreseeing trouble ahead in automotive, the insurance arm of Toronto-Dominion Bank expects a third-quarter net loss of between $240-million and $290-million after tax, The Globe and Mail's Jacqueline Nelson reports.
The loss stems from a $418-million after-tax hit “from a combination of severe weather-related impact and increased general insurance claims,” the bank said in a statement. TD has the largest property and casualty insurance operations of all of Canada’s Big Banks.
The evacuation, home and automobile damage claims resulting from the storms in both Alberta and Toronto this summer accounts or many of those claims. These events will cost TD Insurance $125-million after tax and reinsurance (which insurers buy to protect themselves and manage risk).
The insurer also noted it would mark down an after-tax hit of $93-million because of loan losses in its real estate secured lending portfolio related to the Alberta storms
Markets are on the rise so far this morning, though there’s caution in the air in advance of the Federal Reserve’s policy announcement tomorrow.
Also playing into global trading is a move by the Chinese central bank to pump billions into the financial system.
Tokyo’s Nikkei, which plunged yesterday, gained 1.5 per cent today, while Hong Kong’s Hang Seng inched up 0.5 per cent.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.3 per cent and 0.5 per cent by about 8:30 a.m. ET.
Dow Jones industrial average and S&P 500 futures were also up.
“The FTSE is following the Asian markets higher and briefly touched the 6600 level after the People’s Bank of China added liquidity to the interbank market, as concerns about a credit crunch have been circulating,” said market analyst David Madden of IG in London.
“The rapid growth of the Asian powerhouse isn’t what it used to be and a number of economists are worried the country is relying too heavily on cheap credit. This monetary intervention will buy Beijing some time for now at least.”
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