Saturday August 16, 2008
REPORT ON BUSINESS FRONT PAGE 
How to make the most of a 'cowardly lion' market
It was the sort of week in the markets that makes many a participant wonder why they bother playing. After several down days, U.S. stocks climbed yesterday, bringing levels back close to where they started out on Monday. In Canada, it was a similar story in reverse, with gains disappearing and stocks ending up lower.
INSIDE
Greener than thouBody Shop was green before green was the new black. So how can it differentiate itself from a crowded eco-friendly field and once again lead the pack? For chief executive officer Peter
THE MARKETS
DOWNSandP/TSX13,096.70-262.21UPDow11,659.90+43.97DOWNNasdaq2,452.52-1.15UPDollar94.43+0.38DOWN
COLUMNISTS
Books and mags are fine - but I'm hip to the blogs
Over the past six months I feel like I have finally caught up to the 21st century. Don't get me wrong, I have never thought of myself as a technophobe. I have always embraced technology, but only as a necessity. I needed computers to do my job, and to set up an entertainment ''system'' at home.
If you can keep your head when all about you ...
There are two main risks in stocks. One is to lose money; the other is to lose sleep when your holdings fluctuate too fast and too wildly. The first can be mitigated by researching what you own; but the second cannot be avoided.
Falling gas prices chip at 'Alberta Advantage'
William Nichols is a third-generation oilman and, these days, a devout pessimist. Yes, unemployment is low, and money continues to pour into Alberta's north. But look a little closer, he says.
ETFs: top earners and bleeders of the year
WHAT ARE WE LOOKING FOR?The stars and dogs among Canadian-listed exchanged-traded funds this year.ETFs, which are mutual funds that trade like stocks, have grown in popularity thanks to their low fees and ease of buying and selling.
Central Canada risks winding up in the red
Rich province, poor provinceIf you thought the fiscal disparity between the resource-rich provinces (mostly in the West) and the manufacturing-heavy centre of the country was pronounced before, you ain't seen nothin' yet.
INTERNATIONAL BUSINESS
Wachovia latest to agree to buy back securities
U.S. authorities, led by New York Attorney-General Andrew Cuomo, have unleashed a barrage of firepower against banks in recent days, following months of investigations into February's collapse of the $330-billion (U.S.) market for auction-rate securities.
RUSSIA'S ENERGY CARD
In early 2002, some 200 U.S. Special Forces soldiers landed in the former Soviet republic of Georgia to train the Georgian army in anti-terrorism techniques, including how to protect a planned oil pipeline from secessionist or anti-Western saboteurs.
STOCKS AROUND THE WORLD THIS WEEK
* IRELAND: Times have been tough on the Irish stock market this year. So much so that the value of stocks traded on the Irish Stock Exchange was down 32 per cent in the first half of the year compared with a year earlier. Average daily turnover was also sharply lower.
Financiers flunk out at London's fusty, funky clubs
Jonathan Downey, the owner of the East Room club on the edge of London's financial district, says bankers are the last people he wants as members.''We don't want the archetypal City idiot, waving his cash about at the bar and braying like a buffoon and annoying women,'' said Mr. Downey, 42, whose club charges men an annual membership fee of & 350 ($692). Women pay & 150.
World's highest solar power station in works
Swiss companies are planning to build the world's highest solar power station in the country's southern Alpine region, one of the project developers, electricity group BKW FMB Energy Ltd., said yesterday. The installation will power a restaurant 3,800 metres up the Matterhorn glacier, which gives a view of Italy's Mount Cervino (4,478 metres), BKW FMB said in a statement. The solar station will be constructed by Zermatt Bergbahnen, a Swiss aerial cable car company, and the BKW FMB affiliate Sol-E for 600,000 Swiss francs ($579,000). Some 40,000 kilowatt-hours will be available to the high altitude restaurant when the station it is scheduled to be up and running at the end of this year. BKB (Zurich) fell 1 Swiss franc to 122 Swiss francs ($117.77).
Vestas shares surge on wind power orders
Tourquoise joins upstart challenge to LSE
A new equities trading platform backed by investment banking heavyweights such as BNP Paribas, Citigroup and Credit Suisse began operating yesterday, piling further pressure on London Stock Exchange PLC and other traditional bourses. London-based Turquoise began trading with just five stocks each from Britain and Germany, but it expects to offer 1,300 of Europe's biggest shares across 13 countries by its official launch in early September. Turquoise joins a host of trading venues that have been created since changes to European Union laws last year.
Stada surges on report of possible Teva bid
Stada Arzneimittel AG gained the most in three years after Israel's Globes newspaper said Teva Pharmaceutical Industries Ltd. is in talks to acquire Germany's third-largest generic-drug maker. In April, the Israeli drug maker's European head Gerard van Odijk said Teva had examined the option of acquiring Stada. Teva last month announced a plan to acquire Barr Pharmaceuticals Inc. for $7.46-billion (U.S.). Stada spokesman Axel Mueller said the Bad Vilbel-based company never comments on market rumours. Teva spokeswoman Ayala Miller didn't return a telephone call requesting comment. SAZ (Frankfurt) rose €3.75 to €36.30 ($56.41).
Investment heats up, exports slow in China
Investment in China is picking up while the trade surplus is declining, data showed yesterday, suggesting the world's fourth-largest economy may be increasingly relying on itself for growth momentum. The country's urban fixed-asset investment - spending on productive capacity in the cities - rose 27.3 per cent in the first seven months of 2008 compared with a year earlier, the National Bureau of Statistics said. By contrast, recent data showed China's trade surplus declined 9.6 per cent in the January-July period from the same period last year, confirming the impact of the U.S.-led global economic slowdown.
NYSE trading tests delay integration of Amex
Cuomo pressures Merrill; Wachovia settles
Alabama county headed for largest U.S. municipal bankruptcy
Alabama's largest county appears headed for the biggest municipal bankruptcy in U.S. history, a $3.2-billion (U.S.) mess created by the nation's credit crunch and a colossal, corruption-riddled sewer project.
CANADIAN BUSINESS
Gold, oil prices tank as greenback gains steam
The price of gold, which just five months ago broke through a record $1,000 (U.S.) an ounce, plunged back below $800 as bullion suffered its largest weekly decline in a quarter century.
Investors could learn Monday if they'll get ABCP funds returned
Almost a year to the day after the asset-backed commercial paper market ground to a halt, investors will find out on Monday whether there's a chance of getting their money back in coming weeks.
Standing out in a sea of green
Body Shop wants to climb back on its soap box and stand out from the crowd. Sure, they still have street cred as a pioneer in social and environmental responsibility, but the trouble is that everyone else seems to have caught up - not only on the green agenda, but in the company's core business of cosmetics and bath products.
FIVE THINGS
1 What's in a name?When Giant Tiger customers nicknamed the discount retailer G.T. Boutique, the moniker was just an inside joke. But company executives got in on it by branding their juniors clothing line under the name. Rather than carrying clothing purchases in bags emblazoned with the company's tiger logo, shoppers now leave the store with chic brown and cream-coloured G.T. Boutique totes that don't reveal their thrifty habits.
Arbitrator sides with Wal-Mart workers
A Quebec arbitrator imposed a labour contract yesterday at a unionized Wal-Mart outlet in western Quebec, marking the first such deal involving the retail giant in North America. While other Wal-Mart stores have been unionized, a group that is critical of the company's labour policies called it a ''landmark'' collective agreement.
Neighbour's death spurs on a community
The Gift: $15,000, plus their estateThe Cause: The Community Foundation of OttawaThe Reason: To fund various education and sports programsWhen neighbour Jeff Hume died two years ago, many people in his Ottawa neighbourhood wanted to do something to honour his memory. ''We considered a park bench, planting a tree, a bursary and the like,'' recalled Tom Lawson. Instead, Mr. Lawson and his wife, Sheila Casey, suggested the group set up a fund in Mr. Hume's name within the Community Foundation of Ottawa.
CN asks regulator to change tack on EJ&E
Factory data stronger than expected
Turbo Power gets boost from Bombardier
Bonterra to ditch trust structure
WEEKLY STOCK TRACKER
-39%Timminco Ltd., whose promise of a ''breakthrough'' process to upgrade silicon for use in solar cells made it a market darling, saw its share price unravel after contamination problems forced the company to sharply reduce its production forecast. Timminco lost as much as 27 per cent of its value Tuesday as investors dumped the stock following the release late Monday of disappointing second-quarter results. The company produced just 221 tonnes of solar-grade silicon in the second quarter, falling well short of the expected 300 tonnes. The quarterly report is serving as a major test of faith for holders of the controversial stock that has divided investors between raging bulls who believe Timminco is poised to revolutionize the solar silicon industry and ardent naysayers who question the viability of its process. The stock was down 39 per cent on the week.
WEEKLY STOCK TRACKER
+21%CanWest Global Communications Corp. became the first non-European media company to be granted a radio licence in Britain three years ago, but with the chance of turning that business into a money-maker looking increasingly remote, the company decided to sell this week. Amid concerns over its debt, which stands at more than $3.7-billion, CanWest has been looking to sell assets that are a drag on earnings; the three FM radio stations in Britain were identified as the most likely candidates to divest. All were struggling to make money and required significant marketing dollars to compete. No price was given for the sale, but CanWest said removing the drag on earnings will contribute about $7-million a year to operating profit. The stock was up 21 per cent on the week.
Investors cool on global equity funds
Canadians stashed $1.4-billion into mutual funds amid volatile stock markets in July, but outflows in some categories took total net sales down to $646-million, according to the Investment Funds Institute of Canada (IFIC). ''Investors continued to sit on the sidelines,'' Pat Dunwoody, vice-president of member services at the IFIC, said yesterday in a statement. There was $715.8-million in net redemptions led by investors pulling money out of global and international equity funds. After money markets, the second-best-selling fund category last month was Canadian neutral balanced funds, which brought in $372.5-million. Total assets for the Canadian industry fell to $685.4-billion from $703.5-billion a year ago.
GENERAL BUSINESS
Cash carrot leads to excellent employee referrals
''Psst! Give me a name and the $3,000 is yours.'' Sounds like a scene out of the latest blockbuster thriller, right? Wrong. Companies worth their stock options know that offering employees cash in exchange for referrals yields superior hires. And with recruiting rates eating up the equivalent of at least 25 per cent of the new employee's salary, it's no wonder forking over between $500 and $5,000 for employee-screened resumes, seems like a deal.
Clarification
Petrobank Energy and Resources Ltd. says it did not initiate discussions about a surface lease on private farm land that sits over the Bakken oil field in Saskatchewan. The company decided it would not need to use the land. It says it is not involved in a dispute, described in an article published Aug. 4, between the owner of the farm and the provincial government.
Correction
Loblaw Cos. Ltd. stock closed at $29.82 on Thursday. Incorrect information was published yesterday.
GLOBE INVESTOR
Getting great returns with a clean conscience
Practitioners of socially responsible investing (SRI) will not miss the ample, always growing dividend of Rothmans Inc. if the takeover offer from Philip Morris International Inc. goes through. SRI types weren't invested in the company anyway, since its tobacco products are deemed harmful to society.
Well-fixed ... worried nonetheless
Near Toronto, a couple we'll call Albert and Tess are easing into retirement. Albert, 62, has retired from a large manufacturing company. Tess, 65, still runs her own small consulting business but is in the process of winding it down. Its market value is modest, but she will sell it if she can.
Books and mags are fine - but I'm hip to the blogs
Over the past six months I feel like I have finally caught up to the 21st century. Don't get me wrong, I have never thought of myself as a technophobe. I have always embraced technology, but only as a necessity. I needed computers to do my job, and to set up an entertainment ''system'' at home.
ETFs: top earners and bleeders of the year
WHAT ARE WE LOOKING FOR?The stars and dogs among Canadian-listed exchanged-traded funds this year.ETFs, which are mutual funds that trade like stocks, have grown in popularity thanks to their low fees and ease of buying and selling.
If you can keep your head when all about you ...
There are two main risks in stocks. One is to lose money; the other is to lose sleep when your holdings fluctuate too fast and too wildly. The first can be mitigated by researching what you own; but the second cannot be avoided.
THREE STATS YOU JUST CAN'T BE WITHOUT ON A SATURDAY: THE WEEK IN ECONOMICS
OUR OIL CONSUMPTION CONTINUED TO RISE THROUGH 2007Gasoline's bite out of Canadian incomes has soared in the past five years, and it's not all down to higher prices.
A youthful finance student gets 'aggressive'
TIMOTHY PEREIRAAGE: 26OCCUPATION: Finance student at Concordia University in Montreal.PORTFOLIO: Baidu.com Inc., Apple Inc., Mercadolibre Inc.INVESTING APPROACHMr. Pereira buys and holds stocks with the potential for annual gains greater than 30 per cent. He feels returns of this magnitude are possible from ''technology platform companies that are dominant in a growing field.''
Central Canada risks winding up in the red
Rich province, poor provinceIf you thought the fiscal disparity between the resource-rich provinces (mostly in the West) and the manufacturing-heavy centre of the country was pronounced before, you ain't seen nothin' yet.
STARS AND DOGS
(DOG)Shanghai composite indexChina's tiny athletes have been hauling home more gold medals than they can stuff into their Dora the Explorer backpacks. China's stock market, on the other hand, has done a face-plant straight into the vaulting horse. As fears grow that the economy will slow after the Olympics are over, investors are raising cash. Maybe they could spare a few yuan to buy the gymnasts a meal.
SPENDING AND SAVING
(based on 10,000 mortgage)Nat'l Av. RateNat'l Best RateMthly paymentTotal interest costs (lifetime Variable, closed4.3353.750$544.33$63,303.07 1 year, open8.1484.250$772.67$131,810.32 1 year, closed5.9954.800$639.50$91,856.72 3 years, closed6.0675.100$643.79$93,140.18 5 years, closed6.1304.990$647.55$94,267.95 7 years, closed6.6225.550$677.23$103,173.63
COMMODITIES
Gold plunged below $800 an ounce yesterday, capping the biggest weekly slide in more than 25 years, and oil, wheat and sugar slumped as the U.S. dollar's rebound reduced the appeal of commodities after a six-year boom.
FRIDAY'S MARKETS: WHAT HAPPENED
DOWNGold, oil selloff pushes composite to triple-digit lossA selloff in gold and oil pushed the SandP/TSX composite to a triple-digit loss. The benchmark was off nearly 2 per cent, or 262 points, closing at 13,096.70. The materials subindex posted the largest decline with gold miners Goldcorp, Barrick, Yamana and Kinross each down 4 per cent. The energy subindex was only slightly better, off 3.2 per cent, with EnCana and Canadian Natural Resources each off 4 per cent.
WHAT THE CHARTS SAY
BULLISH ON ITERATIONIteration Energy Ltd., (yesterday's close $6.33), traded within a horizontal trading range between $2.50 and $6.50 (see dashed lines) from 2003 (not shown) to 2007. The stock rallied above this multiyear base to a high of $9.08 in June to signal the start of a new major up-leg (C). The current pullback toward the 40-week moving average should provide a good buying opportunity (D).
BONDS
Canadian bonds ended higher yesterday as the market moved higher along with U.S. Treasuries, although they underperformed them slightly, in an environment of continued declines in commodity prices. CANADA
FOREIGN EXCHANGE CROSS RATES
The U.S. dollar posted a fifth weekly gain against the euro, its longest winning streak in more than two years, as crude oil prices declined. The U.S. currency rose to the strongest level in almost six months against the euro and a seven-month high versus the yen.
WHAT THE FUTURES HOLD: WHERE TRADERS SEE PRICES ARE HEADED
Gold closed at US$785.83 an ounce yesterday. The market is pricing it at US$808.00 in one year. SOURCE: ESIGNALThree-month interest rates are at 3.155%. The market expects the rate will be 2.97% in one year. SOURCE: MONTREAL EXCHANGE
