本周大事回顾

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Top stories of the week
BNN.ca staff
4:20 PM, E.T. | June 24, 2011

The battle rages for TMX Group

The battle for the TMX Group intensified in the lead up to next week’s shareholder vote to approve the London Stock Exchange takeover. The LSE offered TMX shareholders a special one-time dividend of $4 if the deal is approved. LSE also promised to maintain the current dividend payout. Maple Group—consisting of a number of the country’s major banks and pension funds—countered the LSE offer with a sweetened bid of $50 per share. Shareholders have a lot to chew on over the next week. Complicating matters is an announcement by Montreal billionaire investor Stephen Jarislowsky in favour of the Maple bid, while proxy advisory firm ISS recommends the LSE takeover. All of the major players—the CEO of the LSE, TMX Group and the Maple spokesman—joined BNN this week and explained why their bid should be preferred.

IEA rocks the oil market

Some have called the decision by the International Energy Agency this week to release 60 million barrels of oil from its members’ reserves a global stimulus package. Some have gone as far as to call it QE 2.5. But what is certain is that 60 million barrels is just a drop in the bucket of world oil consumption. Many analysts think its effect will be limited. Others questioned the timing of the release, as oil prices were already declining in recent weeks. Even more questioned whether it was a political move by the Obama administration—with the U.S. Department of Energy accounting for 30 million of the 60 million barrels being released—to provide an economic stimulus to voters as the 2012 elections inch closer.

Greek government survives to see another day

With thousands of protestors chanting outside, Greece’s government survived a confidence vote that went into the early morning hours on Wednesday. The vote temporarily eased concerns the country would default and helped stop the bleeding of equity markets around the world. But the problems in Greece remain. European banks have yet to agree to a plan to rollover Greek debt and the rating agencies are being coy in what they would call such a rollover. And the government still has to pass its plan for austerity measures, which it will vote on next week. As part of the plan, the government wants to sell off several state assets. The protestors—having already camped in front of the parliament for weeks—will likely remain as the vote nears.

Paulson out of the woods, sells Sino-Forest stake

Embattled Chinese forestry company Sino-Forest lost the confidence of its largest shareholder, billionaire hedge fund manager John Paulson. In his most recent filings, Paulson reported that he sold his 14 percent stake in the company. He provided no details on why or exactly when he dumped the shares. Sino-Forest continues to hold the line against allegations by a short seller that the company has overstated the value and size of its assets. It also countered a report by The Globe and Mail that raised questions about some of the company’s business partners. Sino-Forest’s stock has been pummeled as the drama unfolds. It is currently trading under $3—down more than 85 percent from its April peak.

Central banks issue warnings

The Bank of Canada released a report this week that said the risks to the Canadian economy are higher than they were six months ago. Domestically, the biggest problem remains household balance sheets, with the debt-to-income ratio of Canadian households currently sitting at a record 147.3 percent. Internationally, the bank said that the Greek debt crisis poses a risk to Canadian banks—not directly, but indirectly through exposure to U.S. and European banks. Ben Bernanke, the head of the Federal Reserve also took to the microphone this week. He said the Fed cut its forecasts for U.S. economic growth, but offered no signs of extending monetary support through another bond-buying program—known on the Street as Quantitative Easing. The Fed also lowered its forecast for unemployment, adding further evidence that the U.S. labour market is still a long way from recovering jobs lost in the financial crisis.