Today's top stories from Report on Business :
Competition Bureau challenges MLS rules
The Competition Bureau is trying to strike down rules governing the multiple listing service, or MLS, system that's used by most home sellers to list their properties. The MLS system includes information available only to members of the Canadian Real Estate Association, which is too restrictive, the bureau said in a statement today. The regulator also wants consumers to be able to pay a fee to list homes without being obliged to take a host of other services, which could lower the MLS fees, and negotiate property sales without using an agent. The bureau has filed an application to the Competition Tribunal, which will decide the matter. The watchdog said it attempted to strike a deal with CREA, but that failed and it will now seek to kill the rules it deems "anti-competitive."
"While the market will ultimately determine prices for residential real estate services, we expect that if the Tribunal strikes down the anti-competitive restrictions, there will be downward pressure on real estate fees in Canada," said Melanie Aitken, the Commissioner of Competition.
Read
Competition Bureau seeks to smash 'anti-competitive' CREA rules on MLS
The battle to unlock the housing market
Housing market heats up
While CREA heads for a showdown with the Competition Bureau, the market continues to heat up. CREA projected in a new forecast today that resale house prices would rise 5.4 per cent this year to a record average $337,500, as sales increase more than 13 per cent from last year to also hit a record, at 527,300.
Separately, the market for new homes is beginning to show the same bounce that led to the remarkable recovery in resales after the slump. Canada Mortgage and Housing Corp. said today that housing starts in January jumped 5.8 per cent to a seasonally adjust annual rate of 186,300, with gains in both single homes and condominiums. The jump was led by a surge of almost 20 per cent, month over month, in British Columbia.
"New home sales should taper off in July as buyers are jumping the HST gun in B.C. and Ontario, and those same buyers are also likely pulling forward some purchases given well-ingrained expectations of rate hikes in the second half of the year," said BMO Nesbitt Burns economist Robert Kavcic. "Given that supply still has some catching up to do, housing starts should hold up around current levels through the remainder of 2010."
Today's numbers are more fodder for those who have been warning about a housing bubble. Some economists have flagged the issue, and the chiefs of the major banks have also warned Ottawa it needs to dampen the mortgage market as prices surge. At the G7's weekend meeting in Iqaluit, however, Finance Minister Jim Flaherty said he saw no evidence of a bubble.
Read
House prices to hit record, report says
Ottawa says housing bubble not a concern
Banks urge Ottawa to tighten mortgage rules
Canpotex strikes China deal
Canada's major potash producers have struck a deal to sell 350,000 metric tons of the fertilizer to China, but they left markets hanging by not specifying the price. Canpotex, the marketing and distribution organization owned by Potash Corp. of Saskatchewan, Agrium Inc. and Mosaic Co., said in a statement this morning it struck a spot sale with China's Sinofert "at competitive prices."
"As a result of this latest spot sale, Canpotex is now fully committed on sales through the first quarter of 2010 and will announce plans with respect to second-quarter pricing early in March, after thoroughly reviewing the changing and much improved overseas potash market conditions," it said.
Potash prices have been depressed as farmers held back buying, and markets have been watching for a deal with China. Last week, Belarusian Potash Co., or BPC, which accounts for about 30 per cent of the global market, boosted its standard grade price to $410 (U.S.) a tonne from $385 for major customers in Brazil and Asia.
China's Zhuzhou bids on Montreal transit
Bombardier Inc. and its partner Alstom are running up against competition from China's Zhuzhou Electric Locomotive in bidding on a project, estimated at more than $3-billion, to build subway cars for Montreal's Metro. Zhuzhou said today it would assemble the cars in a Quebec plant, which would meet Canadian content rules, and hire up to 1,000 people if it wins the bid. The Quebec and Montreal companies reopened the bidding after Zhuzhou said it would go to court to challenge an earlier tender.
Are investors in for an Olympic glow?
Investors in TSX stocks could be in for a bit of an Olympics boost, one analyst says. HSBC senior equity specialist Douglas Rowat examined the market's mood during the summer and winter Games, back to 1988, and found the market of the home country traded higher 58 per cent of the time, with an overall average return of 0.9 per cent. "It could also be that the good Olympic feeling - not to mention the enriched economy and international exposure - keeps the market momentum going for months afterwards," Mr. Rowat wrote in a report. "Typically, the markets of the host countries rally strongly in the 12 months after the closing ceremonies - a 14.8-per-cent gain on average." Read Streetwise by Tara Perkins
Dubai tower unexpectedly closes
Dubai's celebrated Burj Khalifa, the world's tallest tower, has closed to the public just one month after it opened. The only part of the 828-metre tower that had been open so far was the viewing platform, and that was closed on Sunday, The Associated Press reports. Emaar Properties, which owns the tower, did not specify a reason, but indicated there could be issues with electricity. Read the story
Traders bet against euro
Traders and hedge funds have bet nearly $8-billion (U.S.) against the euro, amassing the biggest ever short position in the single currency on fears of a euro zone debt crisis, the Financial Times reports. Figures from the Chicago Mercantile Exchange, which are often used as a proxy of hedge fund activity, showed investors had increased their positions against the euro to record levels in the week to Feb. 2. The buildup in net short positions represents more than 40,000 contracts traded against the euro, equivalent to $7.6-billion. It suggests investors are losing confidence in the single currency's ability to withstand any contagion from Greece's budget problems to other European countries. Read the FT.com story
Related : Europe could face years-long debt grind
Greek labour plans strike
As Greece scrambles to reassure world markets it is committed to its debt-fighting plan, organized labour is threatening a public sector walkout to fight the cutbacks. The public sector union ADEDY says it has planned a one-day strike for Wednesday, demanding pay hikes and a "fair" tax system. Greece's tax system is considered erratic and leaky, and the government has vowed to fix it while freezing wages among the public sector. Greece is in a fiscal mess - its debt-to-GDP ratio is 12.7 per cent - which has troubled markets and led to fears of contagion. A public sector walkout could trouble markets even more. Read the story
Toyota preparing Prius recall?
Toyota Motor Corp. is poised to recall new Prius models, possibly as early as tomorrow, reports from Tokyo indicate. A recall in Japan, widely expected after troubles with 2010 Prius brake systems, would be followed by recalls in other countries such as the United States, Reuters and other news agencies said this morning. The Prius is Toyota's prized hybrid, and was the best-selling car in Japan last year. Toyota has suffered unprecedented troubles over the past two weeks, first with a recall of several popular models because of sticky gas pedals and then over reports of problems with Prius brakes. Last week, the company's chief apologized and stressed the auto maker's commitment to safety. The company has come under intense scrutiny from the U.S. government, in particular, and is scheduled to appear this week before the U.S. House Committee on Oversight and Government Reform.
Read
Toyota set to take action on Prius
Toyota counting on veteran at Congress hearing
Toyota stumbles but its 'kaizen' cult endures
India forecasts strong growth
India, one of the widely watched BRIC countries, projects economic growth of 7.2 per cent this fiscal year. It's interesting to note that in the last fiscal year, growth of 6.7 per cent was the lowest in six years. The forecast today by the Central Statistical Organization added to speculation that the government could soon unveil measures to pull back from its emergency stimulus. Already, the country's central bank has boosted the reserve requirements for commercial banks, meaning they will have less money to lend. India's statistical agency forecast that manufacturing would expand 8.9 per cent, though agriculture will contract 0.2 per cent in the wake of a terrible monsoon season. India is the "I" in the fast-emerging BRIC economies, the others being Brazil, Russia and China.
Investment banking rebounds
Brokerages are rebounding from the deep financial crisis, a new report says. Investment banking fee revenue around the world recovered 12 per cent, hitting $66.3-billion (U.S.) last year, the report Monday by International Financial Services London said, but that was down by more than a fifth from the record fees of 2007.
"Equity underwriting, fixed income underwriting and mergers and acquisitions (M&A) advisory work each accounted for around a third of investment banks' business in 2009," said the report from the organization, which represents the British financial services sector. Revenue from M&A advisory work, typically the main source of investment banks' business, has fallen considerably since the start of the economic crisis. With less competition following the closure of a number of banks, some investment banks posted large profits in 2009 as they were not faced with trading losses and writedowns to the same extent as in the previous two years."
The report added that the assets of the world's biggest 1,000 banks rose 6.8 per cent in the 2008-2009 fiscal years to a record $96.4-trillion, though profits fell by 85 per cent to $115-billion.
From today's Report on Business
Soured NYC deal portends property storm
G7 reaffirms commitment to bank reform
Ottawa refuses to release Globalive decision documents