A Sotheby's employee wears a Fancy Vivid Yellow Diamond necklaceCARL COURT
Stories Report on Business is following today:
Quadra, FNX strike merger deal
Quadra Mining Ltd. and FNX Mining Co. , two mid-tier players in Canada, are joining forces in a $1.5-billion (U.S.) merger that they say is just the start. The proposed new Quadra FNX Mining Ltd. would have a market capitalization of $3.5-billion, with assets in Canada, the United States and Chile. The two companies, which announced the deal this morning, see growing into a far larger concern with "the critical mass to be a leading industry consolidator." The merged company would produce about 300 million pounds of copper and 150,000 ounces of precious metals next year, with projected revenue of $1.5-billion. Under the deal, which must be approved by shareholders at meetings expected in May, FNX shares would be exchanged for 0.87 of a Quadra share, leaving the latter's shareholders owning about 52 per cent of the merged company. Read the story
Shell, CNPC in new venture
Royal Dutch Shell and China National Petroleum Corp. are becoming quite the energy team. Shell and PetroChina, CNPC's subsidiary, are already bidding for Arrow Energy of Australia, and together running a natural gas field in China's Shaanxi province. Today, Shell and CNPC announced plans to develop other natural gas fields in Sichuan province under a 30-year deal. For China, the move represents yet another move in its global quest for resources, while for Shell it's yet another entry point into the vast Chinese market. Read the story
Governments didn't help much, think tank says
The Fraser Institute says federal stimulus spending didn't really do all that much to bring the economy out of its slump. Other economists have cited stimulus measures and the extraordinary actions of the Bank of Canada for helping to get the country back on its feet, and some now see a stronger recovery than originally forecast. But the Vancouver-based think tank said in a study today that government spending and infrastructure investment added just 0.2 percentage points to economic growth between the second and third quarters of last year, and nothing from the third to the fourth. Rather, private sector investment and higher exports were the "driving forces," it said. "Although the federal government has repeatedly claimed credit for Canada's improved economic performance in the second half of 2009, Statistics Canada data show that government spending and investment in infrastructure had a negligible effect on the country's improved economic growth," one of the co-authors of the study, senior economist Niels Veldhuis, said in a statement. Read the story
U.S. home sales slide
Sales of resale homes in the United States fell 0.6 per cent in February, marking the third consecutive month of decline and reinforcing fears concerns about the state of the U.S. housing market. Prices also fell. However, the picture was mixed across the country as sales rose in the U.S. northeast and midwest but fell in the south and west. "Until we can see a steady and significant increase in the number of jobs being created, bringing down the jobless rate, the housing sector is going to be in for another rough ride," said BMO Nesbitt Burns senior economist Jennifer Lee.
India moves on infrastructure
Weak infrastructure has long held back India's economy, and its government appears determined to fix the situation. At a conference in New Delhi today, Finance Minister Pranab Mukherjee said he wants to see spending on infrastructure basically doubled to $1-trillion (U.S.) over five years, according to the Reuters news agency. The government will allow private sector companies to issue special bonds, a move aimed at bringing pension funds into the system. "Our experience shows that private participation in infrastructure development is indeed a feasible proposition and can help expand infrastructure much faster than it would have relying only on public resources," Prime Minister Manmohan Singh told the conference, Reuters reported.
Lions Gate rebuffs Icahn
Lions Gate Entertainment today rejected a hostile bid by Carl Icahn. Mr. Icahn is bidding $6 (U.S.) a share for the company, or about $575-million. Lions Gate, based in Vancouver but with operations in California, has won critical claim for the Oscar-winning Precious: Based on the Novel 'Push' By Sapphire. Read the story
WTO to rule on aircraft
The World Trade Organization is expected to rule today in a long-running, heated dispute involving European giant Airbus and its U.S. rival Boeing Co. And according to reports from Geneva, the trade body is expected again to slap Airbus by backing an earlier finding, though it's not likely to end there. The United States has complained that Airbus received unfair loans, among other things, from the four European governments involved. A confidential interim ruling last year in fact found what the Reuters news agency described as "actionable" payments to Airbus, though there is a countersuit under way that was launched by Europe.
How wealth, luxury homes have fared
Toronto still ranks among the top 10 cities as a good place for the world's wealthy, though it has slipped two notches in an annual ranking. Toronto fell to 10th position from eighth last year in a study by Knight Frank LLP and Citi Private Bank that measures "the locations that matter to the global tribe of footloose wealthy and influential." The 2010 Wealth Report measures economic activity, political power, knowledge and influence and quality of life.
The study also showed that prime real estate, measured over more than 55 regions, fell an average 5.5 per cent last year, though Toronto almost held its own as luxury homes slipped just 0.5 per cent in value. Shanghai properties gained the most, at 52 per cent, while those in Dubai fell the greatest, down 45 per cent.
"The impact of the financial crash has not been as hard on the typical ultra-high-net-worth buyer of prime property," the study said. "This has meant that many wealthy owners of property are again looking for investments."
Added Liam Bailey, Knight Frank's head of residential research: "Residential investment makes a lot of sense over the long-term. In most locations supply of property either keeps pace or falls short of demand. Most high-net-worth investors tend to cluster around the best locations in the world, which provides its own support."
The study also noted the erosion of wealth brought on by the crash, as high net worth individuals, as they're known, declined around the world. "But the fact that asset prices have recovered strongly since mid-2009 means we can expect the numbers to recover relatively rapidly," the study said.
From today's Report on Business
CRTC rules TV networks can charge for their signals
No sale: Realtors' plan gets bad review
Health plan not painful to U.S. business