Jun 22, 2020
The Daily Chase: Macklem's debut speech as BoC governor; Bombardier out of TSX Composite Index
By Noah Zivitz
Tiff Macklem today gave investors and economists the clearest understanding yet of his views on monetary policy in his debut speech as governor of the Bank of Canada. Nothing came out of left field: he said the threat of persistently low inflation is the Bank’s primary concern, but that it’s not prepared to take a shot at implementing negative interest rates. He also braced Canadians for a choppy road to recovery, warning it “will likely be prolonged and bumpy, with the potential for setbacks along the way.”
BOMBARDIER OUT OF INDEX
Index investors are no longer be compelled to hold shares in the plane and train maker as Bombardier begins its life outside the TSX Composite Index as of today. Is there a case for actively choosing to invest in the penny stock? We’ll look into that (while pointing out just one of 17 analysts tracked by Bloomberg has a Buy recommendation) and the broader issue of relevance after years of job cuts, asset sales, management changes, government aid and questions about its dual-class share structure.
ALLIES SPEAK OUT ON CANADA’S BEHALF
U.S. secretary of state Mike Pompeo released a statement this morning blasting China’s “politically motivated and completely groundless” indictments of Michael Spavor and Michael Kovrig. U.K. foreign secretary Dominic Raab and Germany state minister Niels Annen have also spoken out amid a groundswell of support from Canada’s allies.
WISEMAN JOINS AIMCo
Former Canada Pension Plan Investment Board CEO Mark Wiseman has been appointed chair of Alberta Investment Management Corporation as of Canada Day. The move puts him once again in a senior role at one the country’s largest institutional investors after spending some time in a senior role at BlackRock before an abrupt ousting for breaching company policy. It comes at a crucial time for AIMCo, which is in the throes of a cleaning up a wrong-way bet on the markets that resulted in a $2.1-billion loss last we heard from the fund. Layered on top of that, the province is being pushed to assess the potential of withdrawing from CPP.
IN CONVERSATION WITH CN RAIL’S CEO
Jean-Jacques Ruest joins us this afternoon to pound the table for adding port capacity as a competitiveness imperative. We look forward to also hearing his broader views on the state of the economy in the age of COVID-19. Don’t miss it shortly after 1pm.
OTHER NOTABLE STORIES
-Some sad news from Canada’s energy sector: Enbridge announced this morning that board member Charlie Fischer has passed away. Fischer was CEO of Nexen from 2001 to 2008.
-Cineplex has adopted a shareholder rights plan. The decision came with standard boilerplate language (ie, “to ensure the fair treatment of all shareholders in connection with any take-over bid for the company.”)
-Westshore Terminals is another stock to watch today after Jimmy Pattison’s Great Pacific Financial Services picked up another 1.04 million shares in the company. All today, GPFS and its affiliates now hold a total stake of 36.6% in Westshore.
-Enbridge said yesterday its restarted operations on one leg of Line 5 after earlier identifying a problem with a screw anchor support. The east leg of the line was still shut down as of the time of the latest update yesterday. Enbridge touts Line 5 – which it says supplies more than half of Michigan’s propane demand - as never having experienced a leak.
-Primo Water will be a stock to watch after the company formerly known as Cott nudged up its first-half revenue and adjusted EBITDA forecasts.
NOTABLE RELEASES/EVENTS
-Notable data: U.S. existing home sales
-10:00 a.m. ET: Canopy Growth holds virtual investor meeting
-11:00 a.m. ET: Bank of Canada governor Tiff Macklem addresses Canadian Club (plus news conference at 12:20 p.m. ET)
-1100: Prime Minister Justin Trudeau addresses Canadians from Ottawa
-Apple Worldwide Developers Conference begins
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
