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Reuters Canada Business Summary

28/08/08

Canada banks surprise on upside, shares leap

TORONTO (Reuters) - Royal Bank of Canada beat earnings forecasts and Toronto-Dominion Bank surprised by raising its dividend, highlighting the contrasting banking environments of Canada and the United States. The results on Thursday boosted the shares of Canada's two biggest banks and helped to extend a banking sector rally spurred generally by lower-than-expected writedowns.

Zoom scraps flights, starts insolvency proceedings

TORONTO (Reuters) - Canada's Zoom Airlines, a low-cost transatlantic carrier, has begun insolvency proceedings after high fuel costs and a downturn in the economy pushed it to cancel all flights, it said on Thursday. "We deeply regret the fact that we have been forced to cease all Zoom operations," founders Hugh and John Boyle said in a statement. "It is a tragic day for our passengers and more than 600 staff."

Banks give Toronto stocks a big lift

TORONTO (Reuters) - The Toronto Stock Exchange's main index powered to its second triple-digit gain in a row on Thursday as major banks climbed after releasing results that were not as bad as some analysts feared. Toronto-Dominion Bank was the biggest gainer by weight after it boosted its dividend, the only Canadian bank to do so this quarter.

Canada current account surplus grows on energy boom

OTTAWA (Reuters) - High prices for energy exports boosted Canada's current account surplus in the second quarter, but the gain fell short of expectations and cements the view that quarterly economic growth will be tepid at best. The surplus rose to C$6.76 billion ($6.44 billion) from a downwardly revised second-quarter surplus of C$4.46 billion, Statistics Canada said on Thursday.

Zoom Airlines grounds planes and files for bankruptcy

CALGARY, Alberta (Reuters) - Zoom Airlines, a Canadian discount transatlantic carrier stung by sky-high fuel costs, canceled all flights and began bankruptcy proceedings on Thursday, stranding passengers at several airports. Ottawa-based Zoom said it had tried until midday Thursday to secure a financial lifeline that would keep it aloft after rising jet fuel prices added $50 million in annual costs.

RBC has "aggressive but disciplined" M&A approach

TORONTO (Reuters) - Royal Bank of Canada is looking at potential acquisitions in U.S. personal and commercial banking "with a tremendous amount of caution," President and Chief Executive Gord Nixon said on Thursday. "As everybody is aware, certainly valuations in the U.S. have dropped very dramatically, although the U.S. marketplace is not without its challenges," Nixon said on a conference call, citing U.S. real estate in particular.

Linamar to layoff another 400 workers

TORONTO (Reuters) - Linamar Corp , which makes precision automotive components for engines and transmissions, said it will announce about 400 layoffs later on Thursday. The layoffs will be spread out across Linamar's 38 plants worldwide, 22 of which are in Guelph, Ontario, and come on top of slightly under 400 workers already on layoff, a company spokeswoman said.

Canada dollar pulled lower by oil, rate outlook

TORONTO (Reuters) - The Canadian dollar eased 0.5 percent against the U.S. dollar on Thursday, due in part to a drop in the price of oil after the International Energy Agency pledged to dip into emergency stockpiles if Tropical Storm Gustav disrupted U.S. oil production. Domestic bond prices rose as investors bought safe haven assets ahead of Friday's second quarter GDP report for Canada, which many in the market expect to come in on the soft side.

Toyota cuts sales forecast

TOKYO (Reuters) - Toyota Motor Corp cut its 2009 vehicle sales forecast by nearly 7 percent as high fuel prices hammer demand for large cars and pickup trucks, and said it will speed up the rollout of hybrid and electric cars as their popularity grows. The weaker outlook from the world's most profitable carmaker weighed on shares of European rivals and highlighted an increasingly difficult environment, where orders in the United States and Western Europe for high-margin, gas-thirsty vehicles is slumping.

Oil falls as US, IEA ready emergency stockpiles

NEW YORK (Reuters) - Oil prices fell more than $2 on Thursday after the U.S. government and the International Energy Agency pledged to release emergency stockpiles if Tropical Storm Gustav disrupted U.S. oil production. U.S. crude settled down $2.56 at $115.59 barrel, after falling as low as $114.08 earlier. London Brent crude traded down $2.05 to settle at $114.17 a barrel.

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