These are stories Report on Business is following Wednesday, Sept. 4., 2013.
BlackBerry in talks
BlackBerry Ltd. has already held talks with potential bidders in what it hopes will be a quick auction, The Wall Street Journal reports today.
Preliminary discussions have already been held with potential bidders for all or just parts of the smartphone company, it added.
That fits with what some analysts have projected, and comes on the heels of Microsoft Corp.’s blockbuster deal for Nokia Corp.’s handset operations yesterday.
BlackBerry unveiled a strategic review last month, with a sale among its options.
This comes amid heated competition with the likes of Apple Corp.’s iPhone, Samsung’s Galaxy offerings, and smartphones running Google Inc.’s Android system.
According to the Journal report, BlackBerry could wrap up a sale as early as November.
It has narrowed the number of potential suitors, and full-scale talks will start soon, the report said, quoting sources.
BlackBerry shares climbed 5.3 per cent today, and gained further in after-hours trading.
It's not known which parties have spoken to the company, but Prem Watsa's Fairfax Financial Holdings is known to be interested. Private equity concerns could also play a role at some point, The Wall Street Journal said.
Analysts have been trying to determine what the Microsoft-Nokia deal could mean for BlackBerry, given its auction.
"We believe this transaction sets a bar for valuing BlackBerry's hardware business, which prior to this was viewed as offering limited value," CIBC World Markets analyst Todd Coupland said before the Journal report.
National Bank analyst Kris Thompson, in turn, lowered his estimate of sales of the new BlackBerry 10 devices to 3 million in the second quarter from a previous projection of 5 million, suggesting the strategic review could be based on "poor BB 10 uptake."
"BlackBerry is in the headlines most days given the company’s rise and demise in the important smartphone market," he said in a report today.
"Our view is that enterprises will further delay implementations and even die-hard consumers will catch wind that BlackBerry is for sale, and not commit to the platform."
Also today, research firm IDC released a report on the smartphone market suggesting the share of the market held by BlackBerry's operating system, which has eroded, will fall further still to 1.7 per cent by 2017 from 2.7 per cent now.
That, of course, does not take into account whatever happens with the auction.
"BlackBerry OS share will decline markedly over the forecast due to tepid BlackBerry 10 reception and emboldened competition that are expected to whittle away share in its remaining regional bastions of strength, such as Africa, Latin America, and the Middle East," IDC said.
"BlackBerry volume will remain flat as the market expands around it thanks to enterprises with security or other specialized needs that continue to purchase devices from the company."
The company said in August, when it launched the review, that it has focused on launching the BB 10 devices and bolstering its financial position.
“We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition," chief executive officer Thorsten Heins said at the time.
A spokeswoman was not immediately available for comment today.
- Eric Reguly: Microsoft to buy Nokia’s mobile phone business for $7.2-billion
- Omar El Akkad: With Nokia deal, BlackBerry fades from Microsoft's sights
- Scott Barlow in ROB Insight (for subscribers): Nokia deal doesn't change much for BlackBerry
- New iPhone expected at Apple Sept. 10 event
Central bank holds firm
Bank of Canada Governor Stephen Poloz’s hope of an export and business-led economic rebound remains elusive, prompting the central bank to once again delay a return to higher rates, The Globe and Mail's Barrie McKenna reports.
The central bank left its key overnight rate unchanged today 1 per cent, where it has held at since September 2010. It marked the 24th consecutive time that the bank has left the rate untouched.
“Uncertain global economic conditions appear to be delaying the anticipated rotation of demand in Canada towards exports and investment,” the bank said at the conclusion of Mr. Poloz’s second rate-setting decision since taking over from Mark Carney in June.
Most economists don’t expect the central bank to start hiking rates until next fall at the earliest, particularly now as higher mortgage rates begin to contain the once-hot real estate market.
The central bank said it won’t change its interest rate stance as long as inflation remains muted, there’s slack in the economy and the housing market gradually cools.
Trade gap widens
Canadian exports slipped while imports climbed, widening the country’s trade deficit to $931-million in July from $460-million a month earlier.
Exports to the European Union were hit hard, according to numbers released today by Statistics Canada.
On one side of the ledger, overall exports fell by 0.6 per cent. Volumes fell 1.7 per cent, largely on reduced aircraft shipments, while export prices rose 1.1 per cent, The Globe and Mail's Bertrand Marotte reports.
On the other side, imports rose 0.6 per cent as volumes climbed 1 per cent and prices dipped 0.4 per cent.
Canadian exports to the United States, the country’s main trading partner, rose 0.8 per cent, but imports from the U.S. also increased, by 2.7 per cent, narrowing the trade surplus to $3.2-billion from $3.6-billion in June.
Exports to other countries fell 4.5 per cent, with those to Europe being hit to the tune of almost 16 per cent.
Imports from other countries also slipped, by 3.1 per cent.
"Weak demand in Europe is clearly hurting exporters," said senior economist Jennifer Lee of BMO Nesbitt Burns. "A modest 0.8-per-cent gain in exports to the U.S. provided only a modest offset."
European economy slightly better
It may only be one-tenth of a percentage point, but, hey, the Europeans will take it.
The combined economies of the 27 countries that make up the European Union expanded by 0.4 per cent in the second quarter of the year, a revision from an earlier reading of 0.3 per cent.
The economies of the 17 nations of the smaller euro zone, however, eked out growth of 0.3 per cent, no change from the earlier measure.
And Down Under, Australia’s statistics agency reported today that the economy grew by 0.6 per cent in the second quarter.
South African miners on strike
Almost 80,000 mineworkers have dealt a blow to South Africa’s gold mining industry with a strike that began last night, The Globe and Mail’s Geoffrey York reports from Johannesburg.
Of 23 gold mines targeted, 17 have had to either stop production or operate on a reduced work force.
There was some hope today on reports that a leading union has offered to but its demand for wage hikes of 60 per cent, though there were no details.
The companies insist they can’t offer more than 6.5 per cent.
The strike is expected to cost the economy some $60-million a day.
Prairie cities are expected to lead economic growth among Canadian municipalities in 2013 and 2014, with St. John’s as an exception in that it will take top spot this year alone, a new forecast from Toronto-Dominion Bank suggests.
St. John’s economy is projected to expand by 4 per cent this year, though that will erode markedly in 2014, the bank said today.
Here’s what TD senior economist Sonya Gulati expects in what generally looks like two solitudes, being the Prairies and the rest of Canada:
- Victoria’s economy is forecast to grow by 0.9 per cent this and 1.8 per cent in 2014.
- Vancouver, 1.8 per cent and 2.6 per cent.
- Calgary, 3.2 per cent and 4.1 per cent.
- Edmonton, 2.7 per cent and 3.6 per cent.
- Saskatoon, 2.6 per cent and 3.6 per cent.
- Regina, 3 per cent and 3.4 per cent.
- Winnipeg, 1.9 per cent and 2.6 per cent.
- Toronto, 2 per cent and 2.7 per cent.
- Ottawa-Gatineau, 1 per cent and 1.9 per cent.
- Montreal, 1.4 per cent and 2.2 per cent.
- Quebec City, 0.9 per cent and 1.9 per cent.
- Saint John, 0.3 per cent and 1 per cent.
- Halifax, 1.3 per cent and 2.3 per cent.
Here’s what she expects where house prices are concerned:
- Vancouver is forecast to see average house prices of $756,200 in 2013 and $783,800 in 2014.
- Victoria, $480,300 and $485,500.
- Calgary, $435,000 and $456,000.
- Edmonton, $339,600 and $342,200.
- Saskatoon, $327,300 and $332,800.
- Regina, $308,800 and $312,400.
- Winnipeg, $265,300 and $273,900.
- Toronto, $517,300 and $507,100.
- Ottawa-Gatineau, $353,500 and $347,500.
- Montreal, $319,200 and $318,100.
- Quebec City, $268,900 and $268,800.
- Saint John, $170,700 and $170,400.
- Halifax, $275,500 and $280,400.
- (There is no forecast for St. John’s.)
Ms. Gulati forecasts economic growth in Canada at 1.8 per cent this year, picking up to 2.5 per cent in 2014. Average house prices are projected at $452,300 this year, and $464,500 next.
- Bertrand Marotte: Canada's economy to bounce back after floods, strike: OECD
- Canada's housing market among most 'bubbly' in world, Economist finds
- Vancouver real estate sales jump by half
Germans are finding ever more inventive ways to sneak cash back home from Swiss banks amid the controversy over tax evasion.
Bloomberg news reports today that the moves have been spurred by a push for banks to stop handling money that has not been declared. There has also been a high-profile case of a German executive charged over allegations of skirting taxes through an account in Switzerland.
According to the news agency, some 36,000 Germans have sought amnesty for money that hasn’t been declared, while others face legal action for not declaring funds of more than €10,000 at the border.
This comes amid an election campaign in Germany.
Customs authorities have found cash hidden in shoes, car batteries and underwear, the news agency said. Last year, officials at the German-Swiss border found some €20-million in undeclared money, so it's no small matter.
And then there are those who go the extra mile.
“We had a 72-year-old man wearing a woman’s corset with €150,000 stuffed inside,” one customs official told Bloomberg.
“In another instance, a man had on two incontinence diapers with nearly $140,000 in between.”
Streetwise (for subscribers)
ROB Insight (for subscribers)