Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Chevron Corporation is preparing to take up to an US$11-billion writedown on its assets and is eyeing the sale of its stake in Kitimat LNG, a major Canadian liquefied natural gas project, in a potentially ominous signal about the state of the natural gas sector. This morning we’ll explore the factors playing into Chevron’s decision, whether others will follow, and who might be interested in picking up the Kitimat stake.

CONFLICTING RECOMMENDATIONS ON HBC DEAL

The big, influential proxy advisory services are sending conflicting signals to investors about whether to vote in favour of the proposed HBC privatization led by the retailer’s executive chairman. This morning, Glass Lewis recommended supporting the arrangement, noting “a full sale process here would likely have been a futile undertaking” since Baker’s group has indicated it won’t support a competing bid. Earlier this week, Institutional Shareholder Services came out against the deal, citing “defects” in the sale process. Investors are scheduled to vote next Tuesday. Scheduled being the operative word, since rival bidder Catalyst Group is asking the Ontario Securities Commission to intervene.

CANADA'S COMPLICATED RELATIONSHIP WITH CHINA

Lots of threads to pull on today. The B.C. Supreme Court has granted Huawei CFO Meng Wanzhou’s request for more disclosures on the circumstances surrounding her arrest in Vancouver last year. Meanwhile, the Conservative Party of Canada rallied support in the House of Commons yesterday to establish a special committee tasked with evaluating the state of Canada-China relations. And on that front, the public is taking an increasingly skeptical view. To wit: a new Angus Reid Institute poll shows eroding support for closer trade ties with China, near unanimous mistrust of Beijing on human rights, and a split opinion on whether relations can be repaired.

NAFTA WAITING GAME

We’re back into a familiar holding pattern with the new North American Free Trade Agreement after a flurry of activity in recent weeks that culminated with yesterday’s agreement signing ceremony. Now, we await details on the amendments (including many questions about North American steel and aluminum requirements for the auto sector) and ratification, which U.S. Senate Majority Leader Mitch McConnell has indicated won’t happen until 2020.

ONEX SEALS WESTJET TAKEOVER

The Toronto-based private equity firm confirmed this morning it has completed the purchase of Westjet after winning conditional approval from the Canadian Transportation Agency late yesterday. The regulator gave its blessing, with the caveat that Onex revise its by-laws to ensure a majority Canadian presence in its boardroom for decisions affecting the airline. Onex says Westjet’s shares will be delisted from the TSX in the coming days.

OTHER NOTABLE STORIES

-It’s Fed day, with the market expecting a stand-pat decision on rates. We’ll have in-depth coverage of the decision at 2 p.m. ET and Fed Chair Jerome Powell’s news conference a half hour later.

-Saudi Aramco shares surged in their market debut today in Riyadh, climbing close to a US$1.9-billion market capitalization and putting it within range of the US$2-trillion target originally envisioned.

-Zenabis Global Inc. this morning announced an abrupt change at its most senior level, with CEO Andrew Grieve being replaced immediately on an interim basis by company veteran Kevin Coft. As David George-Cosh recently reported for BNNBloomberg.ca, the Vancouver-based pot producer has struggled to achieve its expansion ambitions in Europe

-We’ll keep an eye on BRP today after some of its existing shareholders announced plans to divest 5 million shares via a bought deal priced at $61.17 apiece (versus yesterday’s close of $63.72)

-Home Capital Group today declared its point-of-sale retail business non-core and so will launch a sale process for the $84-million business, which the company notes is not material to its results.

NOTABLE RELEASES/EVENTS

-Notable earnings: Lululemon

-Notable data: Canadian industrial capacity utilization, U.S. CPI

-9:15 a.m. ET: Finance Minister Bill Morneau makes announcement in Toronto (plus avail)

-10:00 a.m. ET: Ontario Securities Commission hearing re. Catalyst Capital-HBC

-2:00 p.m. ET: U.S. Federal Reserve releases interest rate decision and updated forecasts, plus news conference (1430)

-3:30 p.m. ET: U.S. President Donald Trump holds swearing-in ceremony for new energy secretary

-Statistics Canada publishes study "The retail cannabis market in Canada: A portrait of the first year"

Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg'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.bnnbloomberg.ca/subscribe.