Mar 28, 2019
The Daily Chase: Liberals open to debarment rule changes if SNC convicted; Lululemon rallies
By Noah Zivitz
Infrastructure Minister François-Philippe Champagne left the door open to changing debarment rules if SNC-Lavalin is convicted in a criminal trial over years-old alleged transgressions in Libya. “That’s something we’d have to consider” and “we will see [about] that” is how Champagne responded when twice asked by BNN Bloomberg's Amanda Lang whether the government would change the rules and allow SNC to bid on federal contracts in such an outcome. Important to underscore there’s no telling who will be in power if ever that day comes, but it’s another indication of the significant economic and political stakes surrounding this controversy.
LULU SURGES
Shares of Lululemon are up more than 10 per cent in pre-market trading as CEO Calvin McDonald inspires renewed confidence in the apparel company. Double-digit gains in total revenue, comparable sales, and online sales in the fiscal fourth quarter, which was the first full reporting period under McDonald’s stewardship. Shares have risen 20.7 per cent so far this year. We’ll assess what McDonald needs to do to keep investors satisfied.
LYFT RAISES RANGE
The ride-hailing company lifted the target range for its initial public offering late yesterday, now aiming to price 30.77 million shares between US$70-$72 each (from $62-$68 previously). It’s a sign there’s no shortage of demand, and must be leaving Dara Khosrowshahi and his team at Uber champing at the bit to launch their IPO. Final Lyft pricing is expected after the bell today, with trading to begin tomorrow.
WOW AIR PULLS THE PLUG
The Icelandic airline, which services Montreal and Toronto, announced this morning it has ceased operations after coming up empty in its hunt for a capital injection. All scheduled flights are cancelled and ticket-holders have been told to look elsewhere for flight options.
OTHER NOTABLE STORIES
-The Globe and Mail is reporting First Nations in Saskatchewan, Alberta and B.C. are being invited to participate in a potential bid for a controlling stake in Trans Mountain.
-RBC’s national gauge of housing affordability has improved for the first time in more than three years. The catch is that RBC is warning Toronto and Vancouver are still at “crisis” levels.
-Steven Mnuchin and Robert Lighthizer have landed in China. Upon arrival, the treasury secretary said he’s hoping for “productive” trade discussions.
-Aimia is giving investors a glimpse of what the future holds in the wake of the Aeroplan sale. The loyalty company is aiming to reduce headcount by 25 per cent, Robert Brown is retiring as chairman, and a $150-million share buyback is in the works. Meanwhile, fourth-quarter revenue tumbled 22 per cent.
NOTABLE RELEASES/EVENTS
-Notable earnings: Dollarama, CannTrust, Aimia
-Notable data: U.S. GDP
-12:45 p.m. ET: Finance Minister Bill Morneau discusses Budget 2019 in Montreal (plus media avail at 1:45 p.m. ET)
-12:50 p.m. ET: Ontario Finance Minister Vic Fedeli delivers speech to Empire Club in Toronto
-U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in China for trade talks
-Lyft expected to price IPO (trading begins Friday)
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.
