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CA-BUSINESS Summary

10/10/08

Canada banks cut prime rates on mortgage plan

TORONTO (Reuters) - Canadian banks moved to lower lending rates on Friday after learning they will be able to get a short-term break on funding costs by selling more of their mortgages to a federal housing agency. Bank of Nova Scotia was the second Canadian bank to trumpet a prime-rate cut, but it cut deeper than the front-runner, Toronto-Dominion Bank .

Toronto stocks drop as panic hits, commodities dive

TORONTO (Reuters) - The main index of the Toronto Stock Exchange tumbled almost 6 percent on Friday as the latest wave of panic swept through global equity markets, wiping billions of dollars more from investor portfolios and pushing commodity prices sharply lower. The size of the rout seen in recent weeks continues to balloon: the benchmark S&P/TSX composite index <.GSPTSE> has lost roughly C$440 billion in market value since the end of August.

Canada to buy up to $25 bln in insured mortgages

TORONTO (Reuters) - Canada plans to buy up to C$25 billion ($21 billion) in insured residential mortgages to help cushion banks from the global financial crisis and address a "scarcity" of private-sector lending, Finance Minister Jim Flaherty said on Friday. While details of the plan were slim, Flaherty stressed the program is not a bank bailout because the government is not buying equity, and that the mortgages are "high-quality assets" that are already insured by the Canada Mortgage and Housing Corp. (CMHC), a government-owned agency.

G7 pledges urgent, decisive action as markets reel

WASHINGTON/NEW YORK (Reuters) - Finance chiefs of the world's major economies pledged on Friday to take decisive action and work together to stem the escalating financial crisis after another day of gut-wrenching drops on world markets. Reeling from the loss of trillions of dollars of wealth, investors worldwide had pinned their hopes on decisive action from the Group of Seven major industrialized nations. U.S. stocks pared massive losses in a late recovery.

Canada dollar has biggest one-day drop since 1971

TORONTO (Reuters) - The Canadian dollar closed at its lowest level since March 2007 against the U.S. dollar on Friday, taking its biggest one-day slide in nearly 38 years, as fears of a global recession and slumping commodity prices trumped some better than expected economic data. The currency hit a weak point of 82.40 U.S. cents, its lowest level since August 2005, before a slight recovery.

Potash Corp tells workers to take deal amid turmoil

WINNIPEG, Manitoba (Reuters) - Potash Corp of Saskatchewan has urged striking miners to accept its latest contract offer because the global economic crisis could make it hard to justify its proposed wage and pension increases in the future. In letters to striking employees dated October 8, Garth Moore, president of the potash division at the world's largest fertilizer producer, described the "significant financial turmoil" that has hurt businesses, governments and jobs.

TD cuts prime rate by 15 bps on mortgage plan

TORONTO (Reuters) - Toronto-Dominion Bank said on Friday it will lower its prime lending rate to 4.35 percent, the second cut to prime it has made this week, citing the benefits of a federal government plan to buy additional residential mortgages from financial institutions. TD Canada Trust, the bank's domestic unit, said it will lower its prime rate by 15 basis points to 4.35 percent, effective next Tuesday. Monday is the Canadian Thanksgiving holiday.

Oil drops 10 percent on demand, risk concerns

NEW YORK (Reuters) - Oil prices dropped more than 10 percent on Friday and touched 13-month lows in a global flight from risk amid concerns of a worldwide recession and further signs of slumping energy demand. The International Energy Agency slashed its estimate of worldwide 2008 oil demand growth to its lowest rate since 1993, and lowered its 2009 growth forecast by 190,000 barrels per day.

Canadian job growth stuns; government to aid banks

TORONTO (Reuters) - The Canadian economy created more than 10 times the number of jobs expected in September, figures released on Friday showed, while the government unveiled a plan to buy insured mortgages to help cushion banks from the global financial crisis. The headline number on the jobs report, followed by a solid trade surplus figure, seemed to defy concerns that global forces could sweep up Canada's relatively healthy banking system and push its economy into a sharp downturn.

Telus, BCE to team up on network upgrade

OTTAWA/TORONTO (Reuters) - Telus Corp , Canada's No. 2 phone company, said on Friday it will build a next-generation wireless network with Canada's biggest telecom company, BCE Inc , as they fight for market share with rival Rogers Communications Inc . The upgrade to high-speed packet access (HSPA) technology, which will be completed in early 2010, will allow Telus and BCE's Bell Canada unit to offer services on a wider range of cellphones and smartphones.

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