Nov 15, 2017
BNN's Daily Chase: Home Capital's mortgage originations plunge; NAFTA talks to resume
By Noah Zivitz
Home Capital Group survived the crisis of confidence that pushed it to the brink this spring, but the road to recovery remains long. The alternative lender said late yesterday its mortgage originations plunged to $385 million in the third quarter from $2.54 billion a year earlier. While Home Capital posted a profit during the latest three-month period after suffering a big loss in the prior quarter, the company admitted loan growth “has been slower than planned” and warned originations will likely be “well below historical levels” in the fourth quarter. We await more details on the conference call at 8:00 a.m. ET.
NAFTA ROUND FIVE
The chief negotiators will roll up their sleeves in Mexico City on Friday, but working groups are expected to resume renegotiations today. Given the venue, it’s fair to assume a good portion of the talks will focus on autos. And there’s another sore spot back in the spotlight after Canada filed a notice of intent to challenge U.S. softwood duties under the Chapter 19 dispute resolution mechanism.
OTTAWA-OMNITRAX CAUGHT IN WEB OF LEGAL THREATS
First, the federal government threatened on Oct. 13 to sue Omnitrax over the state of a crucial rail link to Churchill, Man. Then, early yesterday afternoon, Omnitrax put Ottawa on notice that it intended to sue the government for $150 million under NAFTA’s Chapter 11, claiming the feds had “effectively pulled the rug out from under” its investment in the rail link. A few hours later, Ottawa went ahead and sued Omnitrax for breach of contract. Meanwhile, Churchill residents are still stuck dealing with a broken rail link. We’ll chase all principals.
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'MARKET FORCES WILL ALWAYS PREVAIL': ONTARIO FINANCE MINISTER ON HOUSING
Fresh off trumpeting the province’s 16-point Fair Housing Plan as having “accomplished almost exactly” what the government hoped for, Ontario’s finance minister isn’t showing his hand on any additional intervention. When asked by Greg Bonnell if more measures are in the offing after CIBC warned there’s no affordability relief on the horizon, Sousa said “market forces will always prevail, but we’ll see how it proceeds.
MONTREAL’S MAYOR PUTS FOREIGN BUYERS ON NOTICE
First Vancouver, then Toronto. Now, foreign homebuyers are in the crosshairs in Montreal. Newly-elected mayor Valerie Plante told reporters she wants the green light to tax foreign buyers. “What we want is to right away seek powers from Quebec to impose it if we consider it’s necessary,” she’s quoted as telling reporters yesterday. The question now is whether just the power to impose a levy is enough to ward off international speculators.
LIVE ON LOCATION
Commodities is back on location for day two of the GMP FirstEnergy Energy Growth Conference. Today, Andrew Bell speaks with renowned energy economist Peter Tertzakian and the CEOs of Painted Pony, Kelt, Cathedral Energy Services, and Iron Bridge Resources.
OTHER NOTABLE STORIES:
-We will keep tabs on developments in Zimbabwe, where the country’s army said it has taken Robert Mugabe into custody in what’s being called a “bloodless correction,” according to the Associate Press.
-Loblaw edged past profit expectations in the third quarter as adjusted earnings rose 10 per cent to $1.39 per share, while revenue inched up less than a percentage point in the period. The retailer also said it's planning to close 22 unprofitable stores and reiterated that it recently cut 500 jobs. All in, Loblaw says it expecting to take $135-million in charges as a result.
-Aurora Cannabis said late yesterday it has tabled an all-stock proposal to buy CanniMed Therapeutics for $24 per share. Aurora has given CanniMed until Friday at 10:00 p.m. ET to respond, and says 38 per cent of CanniMed holders are already backing its plan.
-Reuters is reporting Teck Resources has spoken with McKinsey boss (and chair of Bill Morneau’s Advisory Council on Economic Growth) Dominic Barton about becoming its next chairman.
-Toronto Mayor John Tory continues his business mission to New York, and looks like he’s really ready to get the message out – with a bunch of major broadcast interviews scheduled.
NOTABLE RELEASES/EVENTS
-Notable earnings: Loblaw, Target, Cisco
-Notable data: CREA national home sales report, U.S. CPI. U.S. retail sales
-11:30 a.m. ET: Cenovus CEO Alex Pourbaix hosts media media and greet in Calgary
-1:00 p.m. ET: Foreign Affairs Minister Chrystia Freeland holds media avail in Vancouver
-1:15 p.m. ET: Justin Trudeau holds media avail in Vancouver
-7:00 p.m. ET: Bank of Canada Senior Deputy Governor delivers speech in New York
Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.
