Today's top stories from Report on Business :
Toyota's troubles deepen
The U.S. government is turning up the heat on Toyota Motor Corp. as its recall troubles related to sticky gas pedals escalate. U.S. Transportation Secretary Ray LaHood told reporters today he wants a meeting with chief executive officer Akio Toyoda to discuss safety concerns and how the embattled auto maker handled the issue. Initially today, Mr. LaHood said to a government subcommittee that owners of the recalled vehicles should stop driving them and get them fixed. Later, he said he misspoke and that the affected cars - millions of them - should be taken in for repairs.
"I want to encourage owners of any recalled Toyota models to contact their local dealer and get their vehicles fixed as soon as possible," Mr. LaHood said in a statement. "[National Highway Traffic Safety Administration]will continue to hold Toyota's feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe."
New troubles emerged today amid reports of complaints of brake problems with Toyota's popular Prius model in the United States and Japan. Already reeling from its massive recall and unprecedented production shutdown of key models related to the gas pedals, reports today said about 100 complaints have been made to the NHTSA and another 14 to Japanese officials. Toyota, which is working to repair vehicles and said it is committed to safety, added it was looking into the issue.
Honda Motor Co. , Toyota's main Japanese rival, is faring much better. Honda today posted its strongest profit in about 18 months and boosted its outlook well above what markets had been anticipating.
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Toyota shares fall on LaHood comments
Toyota hit by Prius brake complaints
U.S. to broaden probe of Toyota's vehicles
Has Toyota bungled the important PR war?
Oil market faces glut, TD says
The oil market faces a "massive glut" that will hold down prices, Toronto-Dominion Bank says in a new forecast.
"Even though the global recovery got under way during the second half of last year, this blow to the crude oil market is going to continue to be felt for some time, as the fundamental picture remains quite weak," TD economist Dina Cover said in a research note today.
Ms. Cover noted that while demand from non-OECD countries such as China has increased, there has been no significant rebound in OECD countries. True, total global demand ended 2009 a tad above 2008 levels but compared to 2007, the more accurate pre-recession benchmark, demand was down about 2 per cent, she said. And as prices rose back toward $70 (U.S.) a barrel after the collapse, OPEC compliance rates slipped. Factoring in higher production in countries such as Canada, the U.S. and former Soviet Union, total global output was up 1.6 per cent in the fourth quarter of 2009, some 1.3 million barrels a day more than demand. Indeed, in the last two months of the year, the supply-demand imbalance widened markedly, she noted.
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"So while demand for crude oil is improving alongside the economic recovery, supply has been rising at a faster pace, preventing the market from working down inventories and moving back into a more balanced position," she wrote. "... Even once the rebound in crude oil demand is in full swing, the supply overhang, combined with growing excess capacity, will limit any upward pressure on prices."
Ms. Cover projects prices to average about $80 a barrel this year and $85 in 2011.
AIG bonuses trouble officials
U.S. Treasury Secretary Timothy Geithner and pay czar Kenneth Feinberg slammed American International Group Inc. today over "outrageous" bonuses after news that the insurer is poised to pay about $100-million (U.S.) in a new round of payments. Mr. Geithner said the bonuses marked an "outrageous failure of policy," and said the money could be recouped through the new bank fee in President Barack Obama's proposed budget. Mr. Feinberg said separately the payments are contractual obligations entered into years ago. And he pointed out that AIG executives have pledged to repay $39-million out of $45-million in previous bonuses to the U.S. Treasury. Read the story
Potash spot price jumps
One of the world's major potash exporters boosted spot prices for Asia and Brazil by more than 6 per cent, good news for shareholders of Potash Corp. of Saskatchewan and Agrium Inc. . Since the potash heyday, prices have slumped as farmers cut back, but there are tentative signs demand is coming back. Belarussian Potash, which holds a 30-per-cent of the global market, said it boosted the spot price for standard material to $410 (U.S.) a tonne. Notable, too, was that its sales director Oleg Petrov told the Reuters news agency the company can probably strike new agreements in late March or April as "we're completely sold out."
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Major potash exporter raises spot price
Enbridge boosts dividend
Enbridge Inc. is raising its quarterly dividend by 15 per cent to 42.5 cents after reporting a 14-per-cent increase in fourth-quarter profit. The pipeline company this morning posted a profit of $302-million or 80 cents a share, up from $266-million or 71 cents a year earlier. Revenue fell to below analysts' estimates, coming in at $3.19-billion, down from $3.92-billion. Enbridge also announced Statoil ASA is joining its regional oil sands system, bringing to six the shippers on the system. Read the story
Time Warner posts turnaround
Here's one Hangover that wasn't so bad for Time Warner Inc. shareholders. The media giant today raised its dividend 13 per cent, boosted its stock buyback plan and posted a turnaround in fourth-quarter results, reporting a profit of $627-million (U.S.) or 53 cents a share, compared to last year's loss of $16-billion or $13.41, which included hefty writedowns. Time Warner, which cut loose AOL Inc. and Time Warner Cable, saw better results from movies, with hits such as The Hangover and Sherlock Holmes.
Separately, AOL posted a slim fourth-quarter profit of $1.4-million or a cent a share, a turnaround from last year's loss of $1.96-billion or $18.52 a share and better than analysts had expected.
EU backs Greek fiscal plan
Greece, whose fiscal troubles have rippled through stock and currency markets, got something of a thumbs-up from the EU today. Having reviewed its deficit-fighting measures, the European Commission backed the plan to cut the shortfall to below the EU limit of 3 per cent of GDP by late 2012. But the EU said it wanted Greece to take additional measures, and planned to monitor the implementation closely. Markets were watching for the EU stamp of approval, and Greek markets and the euro rose in response. "We are endorsing the Greek program," Economic and Monetary Affairs Commissioner Joaquin Almunia told reporters. "But at the same time we know that the implementation of the program is not easy." Read the story
Retail money headed to stocks?
Retail investors may be poised to jump into stocks in a big way, Scotia Capital says. Historically, economists Derek Holt and Karen Cordes said in a research note, turning points in the TSX have led the turning points in net inflows into equity mutual funds by about six months with "remarkable consistency." Add to that the fact that investors are sitting on bundles of cash and that consumer confidence is rising just in time for the RRSP season and "the net effect … should encourage retail investors to sweep non-tax-sheltered deposits across to tax sheltered vehicles like RRSPs and TFSAs with a potential equity bias," they wrote.
"I think we're at a turning point in the markets at which we can expect the retail money to pick up at where some of the institutional money may be leaving," Mr. Holt said.
From today's Report on Business
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