China’s murky moves hand Trump more ammo 13 Dec 2018 Ottawa has lost contact with another citizen after Beijing detained an ex-diplomat. It will be considered retaliation for the arrest of Huawei’s CFO. Despite other concessions, such tactics stand to alienate China scholars, embolden U.S. hardliners and make trade peace harder.
Cannabis starts to copy tech’s Indian rope trick 7 Dec 2018 Marlboro maker Altria is spending $1.8 billion – more than a 40 percent premium – for a 45 percent stake in pot grower Cronos. The valuation is both high and irrelevant. Cannabis is beginning to adopt Silicon Valley’s belief that the winner is whoever has the most cash.
Ericsson debacle exposes costs of anti-Huawei push 7 Dec 2018 The Swedish group’s glitchy software crashed some telecom networks. Yet it may grab market share, with its rival’s CFO under arrest and governments backing away from the Chinese company’s kit. A more concentrated market would mean higher prices and a risk of further big outages.
NAFTA 2.0 signing is party for protectionism 30 Nov 2018 America, Canada and Mexico cheered their new, if little-changed, trilateral pact. But U.S. officials also noted that steel and aluminum tariffs remain. And the White House wants to pick which carmakers are subject to import duties. Taxing trade is in full swing.
Mary Barra belatedly supercharges GM’s strategy 26 Nov 2018 Her decision to scrap low-selling brands and thin the $53 bln carmaker’s bloated executive ranks was overdue. But cutting $6 bln of costs gives GM more fuel to weather trade wars and slowing sales – and to inject into the electric-vehicle and self-driving race Barra hopes to win.
The Exchange: Stephen Harper 19 Oct 2018 Canada’s former prime minister, in office through the financial meltdown a decade ago, is an advocate for conservative politics with a small “c.” He talked to Breakingviews about the revamped NAFTA, Donald Trump’s standoff with China and the pros and cons of the loonie.
NAFTA is dead – long live NAFTA 1 Oct 2018 Canada and the United States agreed to update and rename the trade pact just in time for signing by the current Mexican government. Ottawa will open its dairy market and regional auto content will be increased. Supporters of the trilateral deal can breathe a sigh of relief.
Barrick and Randgold wisely explore M&A riches 24 Sep 2018 The $12 bln Canadian miner led by former Goldman banker John Thornton is set to unite with its African-focused rival. A deal this big would shake up a sector long cowed by past mistakes. Given weaker prices, falling output and a geographic fit between the two, the idea has logic.
$100 bln weed company is still in the pipe 21 Sep 2018 Cannabis producer Tilray’s shares have risen and fallen at a rate that makes virtual currency bitcoin look lethargic. Its CEO claims it could have a 12-digit valuation. He’s half right. A producer of that size is likely one day, but assuming it will be Tilray is foolish.
Aussie office bid war offers easy investor exit 19 Sep 2018 U.S. private equity giant Blackstone is fighting with a Canadian pension fund over $3 bln of Australian commercial property. The market has boomed but Investa, the target, has underperformed of late. The ensuing rally gives shareholders a chance to relocate at a nice premium.
Cannabis stocks have whiff of 2006 14 Sep 2018 A weed ETF has doubled in price in just over a year, while a Canadian producer has been targeted by an activist because its stock “only” trades at eight times EBITDA. Demand is real and legalization is coming. But online gaming’s sharp correction 12 years ago offers a warning.
Blackstone’s $5.5 bln bond inverts debt hierarchy 13 Sep 2018 Steve Schwarzman’s buyout firm is selling debt to fund its takeover of Thomson Reuters’ financial data arm. The terms allow the owners to pay themselves cash even in tough times. Such undemanding rules make these high-yield bonds look more like stock - but without the upside.
China flaunts firepower in Canadian copper deal 6 Sep 2018 Zijin Mining agreed to buy Nevsun for $1.4 bln, trumping hostile suitor Lundin. A cash bid at a 57 pct premium mostly to bet on a project in Serbia speaks to Beijing's relentless appetite for important metals, but also to scarce supply. Pockets of outbound M&A exuberance persist.
Prem Watsa’s Africa punt may avoid Greek tragedy 5 Sep 2018 The Canadian investor owns 41 pct of African bank Atlas Mara. Given Bob Diamond’s outfit just made a half-year operating loss, the risk is a re-run of Watsa’s awry Greek bank bet. Still, stabilising commodity prices means there’s more chance Watsa has bought in at the bottom.
Delaying NAFTA deal is actually a win-win-win 31 Aug 2018 Canada and the United States will keep talking despite missing a deadline to resolve trade talks. Negotiators will need to move quickly to avoid the risk of fresh demands from the next Mexican government. But a NAFTA that all sides can sell is more important.
NAFTA survival rests on Ottawa showmanship 29 Aug 2018 Foreign Minister Chrystia Freeland is talking up how Mexico’s U.S. “concessions” help Canada. Now she needs a deal, not least on the country’s punitive dairy tariffs, that keeps both the U.S. president and her anti-Trump fellow citizens happy. That’ll require some smooth talking.
U.S.-Mexico deal is only start of tough NAFTA road 27 Aug 2018 The neighbors agreed to boost regional auto content for tariff-free trade. Now Ottawa will rejoin the talks. Hurdles like dispute panels remain, and Trump’s fresh outburst at Canada will make it hard to close the pact this week. Approval by Congress also isn’t a slam dunk.
Rio’s Canadian opportunism amplifies cash quandary 17 Aug 2018 The $80 bln miner wants to list its 59 pct stake in Iron Ore Company of Canada, Reuters says. The timing suggests an eye on amenable markets for the operation's premium product, as China goes green. Success will benefit Rio’s cash pile, but only makes the growth debate louder.
Race is on to be the Netflix of weed 15 Aug 2018 Constellation Brands’ $4 bln investment in cannabis producer Canopy Growth could kick off a feeding frenzy, akin to that over media content. Beer isn’t the only industry with turf to defend or skills applicable to marijuana. Valuations could get even higher than the customers.
Saudi’s fund manager-in-chief veers off-piste 10 Aug 2018 Mohammed bin Salman wants to diversify the desert kingdom away from oil. Buying pricey Tesla stock while selling Canadian assets seems a strange way to do that, though. To stop further net outflows of capital, the crown prince could do with sticking more closely to his mandate.