These are stories Report on Business is following Thursday, July 7. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Proxy firm urges RIM to act A leading proxy advisory firm says it's "underwhelmed" by what it sees as stalling on the part of Research In Motion Ltd. to reform its board-management structure.
The BlackBerry maker has been under pressure to split the jobs of chief executive officer and chairman, and put off a showdown with shareholders by agreeing to strike a committee of independent directors that will study the issue.
Shareholder Northwest & Ethical Investments LP had proposed a vote on the matter at RIM's annual meeting next week, but RIM responded with its proposal, and the two sides agreed. Still, proxy adviser Glass Lewis & Co. said, it's simply avoiding the split and should take "concrete action" on a matter that needs no further study.
“While we commend the board for actively engaging with NEI in an attempt to reach a mutually agreeable solution, we are underwhelmed with the board’s continued avoidance of a commitment to appoint an independent chairman,” Dimitri Zagoroff and Marian Macindoe of Glass Lewis said in a report, according to Bloomberg News.
Jim Balsillie and Mike Lazaridis each hold the title of co-CEO and co-chairman.
ECB hikes rates The European Central Bank hiked its key lending rate as expected today, and left the door open to further increases, though probably not immediately.
After the ECB boosted the benchmark rate by one-quarter of a percentage point to 1.5 per cent, chief Jean-Claude Trichet said the central bank will "continue to monitor very closely all developments with respect to upside risks to price stability." Translation: Further hikes possible to fight inflation.
But he didn't use the words "strong vigilance," which suggests no increase next month.
"His carefully worded comments suggested that, although rates remain low and their stance accommodative, the central bank is not in a huge rush to tighten further," said senior economist Jennifer Lee of BMO Nesbitt Burns. "... Today's move is probably not the final rate hike for 2011."
Some observers see rate hikes in the troubled euro zone as a policy blunder amid a debt crisis that threatens the entire 17-member monetary union and its banking system. Countries such as Greece, Portugal and Ireland can ill afford rate hikes as they struggle to stay afloat and fight high rates of unemployment.
From Mr. Trichet's point of view, of course, he's not trying to kill the euro zone, only fulfill his mandate of keeping inflation in check. "All in all, it is essential that the recent price developments do not give rise to broad-based inflationary pressures over the medium term," he said.
Still, many market players believe it could be a policy mistake, said senior currency strategist Camilla Sutton of Scotia Capital, though she stressed the dilemma of the central bank.
The ECB also eased Portugal's situation somewhat, saying it would now accept Portuguese debt as collateral no matter how it's rated. That does not solve the issue of whether it will take the bonds of Greece should all the major credit raters decide a rollover of some debt constitutes a default.
Separately, the Bank of England kept rates on hold at 0.5 per cent.
- ECB raises rates to 1.5%
- Politcs hamper efforts to solve world's debt crisis
- Europe assails 'bias' of ratings agencies
Is BSkyB deal in jeopardy? Investors are clealy worried that Britain's tabloid scandal dogging Rupert Murdoch's News Corp. will upset his multibillion-dollar deal for British Sky Broadcasting Group PLC.
Shares of BSkyB continued to fall in London today amid the outrage over allegations that his News of the World hacked into the voice mails of murder victims and their families. In one case, The Globe and Mail's Eric Reguly reports, the tabloid is accused to have intercepted the messages of Milly Dowler, a teenager found dead in 2002.
The scandal has had such an impact in Britain that Prime Minister David Cameron has conceded that a public inquiry is necessary.
The proposed takeover of BSkyB - Murdoch is bidding for the 61 per cent of the broadcaster he doesn't already own - could now be delayed, investors fear. Indeed, The Financial Times reports today, Britain's culture secretary is expected to put off his decision until September.
- BSkyB shares hit by fears of phone hacking fallout
- Murdoch has more to lose than loyalty of tabloid readers
- Murdoch advertisers get cold feet over hacking claims
- Phone-hacking scandal likely marks end of media baron's control of British politics
Atco to acquire Australian firm Calgary's Atco Ltd. has struck a deal worth about $1-billion to acquire Western Australia Gas Networks, a distribution utility that serves Perth and its surrounding regions.
“In April 2010, our board of directors approved an Australian growth strategy modeled after Atco's existing Canadian enterprise of diverse yet complementary businesses,” chief executive officer Nancy Southern said in a statement.
"The acquisition of Western Australia Gas Networks is an important step towards achieving this strategy. Driven by natural resource development, the utility is situated in the heart of one of the fastest growing economies in the world and complements our existing portfolio of energy infrastructure assets in Australia.”
Have house prices peaked? House prices have likely peaked after a strong six months, Royal LePage Real Estate Services said today.
While prices saw big year-over-year price increases in the second quarter, “high house prices are concealing early signs of a moderating market," the company said, Globe and Mail real estate writer Steve Ladurantaye reports.
“The market has seen its near-term peak in house price appreciation, and a slower second half of the year is expected."
Separately, Statistics Canada said today, prices for new homes rose 0.4 per cent in May, extending April's 0.3-per-cent climb.
Prices were driven largely by the Toronto area and Montreal, the agency said, while the biggest decline was in the Ottawa region "as some builders offered promotional pricing or free upgrade packages to generate sales."
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