Here are the top reads on deals and financial services over the last 24 hours,
Macquarie Capital Markets Canada shuts sales, trading and research divisions: The Canadian capital markets arm of Australia’s Macquarie Group Ltd. is shutting its institutional equity sales, trading and research businesses across the country, according to people familiar with the matter. Staff from the three units were told of the decision Monday morning, and top leaders were informed late Friday. The majority of the cuts were made in Toronto, with some in Calgary. Story (Jeffrey Jones, Tim Kiladze, for subscribers)
Macquarie retreat signals streamlining of investment banking: After two years of finishing outside the top 20 Canadian dealers in equity league tables, a standard measure of market prowess, Macquarie pulled the plug Monday on its entire 50-plus employee Canadian institutional equity platform. The restructuring should be a wake up call to both small cap Canadian companies, which traditionally look to independent dealers for capital, and the entire investment banking community. In equity markets, fighting the last war means losing the current fight for business. Story (Andrew Willis, for subscribers)
BMO launching tech-focused banking group: Bank of Montreal will launch a new banking group focused on technology companies Tuesday, joining the growing ranks of financial-services companies servicing a sector they long deemed risky. The BMO group plans to provide services for all phases of the tech-firm life cycle, from early-stage startup needs to initial public offerings, while tying itself closely with the bank’s capital-markets and wealth-management divisions to service bigger companies and exiting shareholders. Story (Josh O’Kane, for subscribers)
Former SNC director calls for vote on Highway 407 stake sale: Stephen Jarislowsky, a former director of SNC-Lavalin Group Inc. and a longtime advocate of corporate governance in Canada, is calling on the Quebec company to get the blessing of its shareholders before selling most of its stake in the Highway 407 toll road outside Toronto. He says shareholders are giving little value to the company’s engineering business, which would remain after the 407 sale. He said" it will be a Herculean task to rebuild SNC-Lavalin Engineering" and “the shareholders may end up with next to no value” if the sale proceeds. Story (David Milstead, for subscribers)
Brace yourself: Volatility is set for a return in the big bank stocks: The slowing economy is making it more difficult for equity analysts to accurately predict bank profits, suggesting that investors may want to get used to the kind of volatility that follows earnings misses. Last quarter, four of the Big Six banks – Toronto Dominion, Nova Scotia, CIBC and National – fell short of earnings forecasts as higher credit losses stemming from slower growth took a toll on income statements. Story (Tim Shufelt, for subscribers)
MORE FINANCIAL SERVICES NEWS
Bank of Montreal’s Irish subsidiary fined for licence breach: The Bank of Montreal’s Irish subsidiary has been fined 1.25-million euros by Ireland’s central bank for breaching a condition of its banking licence. Story (Canadian Press)
Visa, Mastercard reach deal with EU to end antitrust probe: The European Union has accepted an offer by Visa and Mastercard to cut fees on payments made by tourists using cards issued outside the bloc to stave off fines and end an EU antitrust investigation. Story (Reuters, for subscribers)
MORE DEALS NEWS
Shared-workspace firm WeWork files for highly-anticipated IPO: WeWork owner The We Company said on Monday it had filed for an initial public offering with U.S. regulators, laying the groundwork for the shared office space manager to go public. Story (Reuters)
Alibaba to pay $250-million to settle U.S. lawsuit over pre-IPO counterfeiting warning: Alibaba Group Holding Ltd. said on Monday it will pay $250-million to settle a U.S. lawsuit faulting the Chinese e-commerce company for concealing a regulatory warning about its ability to stop counterfeiting before it went public in 2014. Story (Reuters, for subscribers)
ROB MAGAZINE
Onex’s art of the deal: For Gerry Schwartz, bland is good for business. But is it enough in the face of new challenges? Onex and its brilliant founder have an astonishing 35-year track record. The challenge for investors is figuring out what’s happening from year to year. ROB Magazine (David Berman, for subscribers)
The Liberals’ CMHC mortgage madness is another subprime crisis waiting to happen: Are you a first-time home buyer who is feeling priced out of the market? Don’t worry about saving more money – go see Cammy the Mortgage Closer instead. You probably know the agency, officially known as the Canada Mortgage and Housing Corp. (CMHC), as the federal mortgage insurer. But starting in September, it will also offer home loans to help property newbies just like you. ROB Magazine (Rita Trichur, for subscribers)
Why RBC is becoming the New England Patriots of Bay Street: It’s time to acknowledge that when it comes to investment banking, RBC Capital Markets is playing in a different league than its Canadian rivals. The deal-making arm of Royal Bank of Canada churned out $8.4-billion in revenue last year, almost as much as its second- and third-ranked domestic competitors put together. In the same way it seems preordained that football’s New England Patriots will be Super Bowl favourites every year, it now appears certain that RBC Capital Markets will make far more money than any other Bay Street dealer. ROB Magazine (Andrew Willis, for subscribers)
The Top 1000: Report on Business magazine’s exclusive ranking of Canada’s largest companies Rankings (for subscribers)
IN CASE YOU MISSED IT
Downfall of a deal-making duo: In the fall of 2016, Larry and Phillip Smith, the father-son duo in charge of Vaughan, Ont.-based PACE Savings & Credit Union Ltd., hit a snag as they worked on a plan to buy a currency exchange business. The seller was offering a 75-per-cent stake. A transaction of that size would require consent from the Deposit Insurance Corp. of Ontario, or DICO. Rather than ask permission, the two men allegedly devised a way to work around the provincial regulator, according to court filings. On Dec. 7, 2016, PACE chief executive Phillip Smith e-mailed his father, suggesting that “we do our best to keep this [deal] arms’ length." Story (James Bradshaw, for subscribers)
The Streetwise newsletter is Tuesday to Saturday. If you’re reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Streetwise and all Globe newsletters on our signup page.