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Reuters Canada Business Summary

03/09/08

Bank of Canada holds rates, sees risks to growth

OTTAWA (Reuters) - The Bank of Canada held its key interest rate steady on Wednesday and signaled it was in no hurry to cut rates any time soon, even as it warned that the U.S. economic outlook could worsen. "The bank judges that the current level of the target for the overnight rate remains appropriately accommodative," it said in a statement outlining its decision to keep the overnight rate at 3 percent.

Toronto stocks fall further as resources slide

TORONTO (Reuters) - The Toronto Stock Exchange's main index extended losses on Wednesday, tumbling for the second day a row in a broad decline sparked by weak resource issues. The S&P/TSX composite index <.GSPTSE> was down 200.62 points, or 1.5 percent, at 13,098.92 on the heels of a more than 3 percent drop in the previous session.

Canada set to offer C$200 million to automakers: report

TORONTO (Reuters) - Canada's Conservative government will offer up to C$200 million ($185 million) in financial support to General Motors of Canada and Ford Motor Co. of Canada days before it is expected to call a federal election, the Globe and Mail said on Wednesday. Quoting industry and government sources, the paper said the government is also preparing announcements on aid to other sectors to boost its appeal in Ontario, where the strong Canadian dollar and weak U.S. economy have hit the manufacturing sector.

More but smaller Canadian M&A deals: report

TORONTO (Reuters) - The number of mergers and acquisitions in Canada grew in the second quarter as the market showed resiliency, investment bank Crosbie & Co said on Wednesday. But the M&A value continued its downward trend as fallout from the credit crunch cut into big leveraged deals, putting the aggregate value at the lowest level in almost five years, the report said.

Talisman Energy jettisons non-core Dutch assets

TORONTO (Reuters) - Talisman Energy agreed to sell its non-core Dutch assets in the North Sea to Total Holdings Nederland B.V. as it advances its plan to focus on key areas. The $480 million deal, which excludes working capital, includes stakes in three licenses, the company said on Wednesday.

Flaherty stands by tax ahead of election

OTTAWA (Reuters) - Finance Minister Jim Flaherty said on Tuesday he will not revisit his controversial policy to tax income trusts even though the issue may return to haunt him in an upcoming election campaign. In an interview with Business News Network television, Flaherty was asked whether he might bow to demands of disgruntled investors hurt by the new tax and soften the rules, particularly for energy trusts.

Oil falls below $109 on demand, Gustav threat passes

LONDON (Reuters) - Oil fell below $109 a barrel on Wednesday, weighed down by slowing demand in the United States and other consuming nations and signs the U.S. oil sector would recover quickly from Hurricane Gustav. U.S. crude traded down $1.40 to $108.31 a barrel by 10:25 a.m. EDT after settling below its 200-day moving average, a key technical level, for the first time since May 2007 on Tuesday.

Canada ABCP parties seek swift top court hearing

TORONTO (Reuters) - Canadian corporate investors owning more than C$600 million ($562 million) of asset-backed commercial paper have asked the Supreme Court of Canada to hear their objections to a plan that would restructure the market, which was worth C$32 billion before it seized up last summer. According to the application, filed on Tuesday, "this case raises fundamental issues relating to the proper interpretation and application of insolvency legislation," and the outcome will affect ABCP investors throughout the country, as well as future Canadian restructurings.

Couche-Tard profit falls, makes executive shuffle

TORONTO (Reuters) - Alimentation Couche-Tard Inc reported a 32 percent drop in quarterly profit on Tuesday as a sluggish U.S. economy weighed on results, at the same time as it announced an executive shuffle. North America's second-biggest convenience store operator said net earnings were $47.2 million, or 24 cents a share, in the first quarter, ended July 20, down from $69.1 million, or 33 cents a share, a year earlier.

Canadian dollar rallies on BoC rate announcement

TORONTO (Reuters) - The Canadian dollar shot higher versus the U.S. dollar on Wednesday and recouped all its early losses as the Bank of Canada held its key interest rate steady and gave no timing for when it might cut rates again. The central bank's decision not to offer any signal for future interest rate cuts also stripped shorter-dated bonds of gains made earlier in the session.

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