Financial News

TSX Group, which operates the Toronto Stock Exchange, said Wednesday its board may need more time to decide on a new chief executive, following a report that it is close to hiring former Chicago Board of Trade head Bernard Dan.

"The board process to select a new CEO is not complete, we have no deal with any candidate, and we do expect a decision … on the new CEO before our (annual general meeting) on June 11," TSX spokesman Steve Kee said in an interview.

The TSX – which earlier this month closed its $1.08 billion ($1.09 billion) acquisition of derivatives market operator Montreal Exchange – had expected to make the announcement by the end of May.

Citing sources, the Globe and Mail newspaper said Wednesday that TSX was in talks with Dan, who stepped down from CBOT after it was bought last year by Chicago Mercantile Exchange Holdings, now CME Group.

Kee would not comment on whether the TSX was looking beyond the current management team at the Toronto and Montreal exchanges cashadvance. In a statement, the TSX called the report on Dan a "rumor".

In January, former TSX head Richard Nesbitt unexpectedly stepped down to become the chief executive of CIBC World Markets. The heir apparent was then Luc Bertrand, former head of Montreal Exchange.

Analysts see Bertrand as a good fit, and a good way to soften the blow in Quebec, where some saw the Montreal Exchange takeover as an affront by English Canada.

Another potential candidate for the top job is Rik Parkhill, an interim co-CEO and head of TSX markets, who Tuesday told Reuters: "It would be an honour to be considered."

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LONDON–Halliburton has made a conditional bid of US$3.36 billion for Expro International Group PLC, the British oil services firm said Friday.

Halliburton's all-cash proposal of US$30.14 per share is richer than the US$28.36 per share offer made in April by a consortium led by Candover Partners Limited, valuing the company at US$3.16 billion.

An Expro statement said the Halliburton Co. proposal "does not yet constitute a firm intention to make an offer" and was subject to preconditions.

Halliburton, which provides services and equipment to oil and natural gas companies, said it considers Expro's sub-sea and flow management sector to be an area of potential expansion pay day advance. Expro's primary focus is providing services and products to measure and control the flow of oil and gas from wells.

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MONTREAL–High fuel prices that are consuming a growing proportion of income at Air Canada will likely hurt demand for air travel, the airline’s chief executive said yesterday.

Montie Brewer, Air Canada’s president and CEO, said the rapid rise and volatility of fuel prices was a concern at the country’s biggest airline, which is pushing ahead with plans to use newer, more fuel-efficient aircraft.

"The severity of it will impact customer demand. We’ll see how much the customer can absorb and still plan on travelling," he told reporters after the company’s annual meeting.

Brewer said every $3 (U.S.) rise in the price of a barrel of crude adds $75 million to Air Canada’s annual fuel costs, and fuel now accounts for some 31 per cent of the airline’s operating cost base, up from 25 per cent last year.

In the first quarter, Air Canada’s fuel expenses rose 22 per cent to $715 million (Canadian) from $585 million a year earlier, and fuel costs are now roughly twice what is spent on wages and salaries.

On May 15, Air Canada eased back on its fuel surcharges, brought in just a week earlier, after domestic rival WestJet Airlines Ltd. brought in lower extra fees.

Air Canada also plans to start charging customers a fee for a second checked bag on certain North American flights.

Brewer told the annual meeting that Air Canada’s fleet renewal program is a key part of its plan to combat high fuel prices no fax payday loan. The average age of aircraft in Air Canada’s fleet is less than nine years.

The world’s 14th largest commercial airline has taken delivery of 14 Boeing Co. 777s, and expects to have 18 in the fleet by early 2009.

"For 2008, we anticipate the 777s will account for more than 17 percent of our capacity, triple their production in 2007," Brewer said.

He also said Air Canada was seeking compensation from Boeing for delays in the delivery of its fuel-saving 787 Dreamliner, but declined to provide details.

The Dreamliner program, delayed in April for the third time, is some 15 months behind schedule. Air Canada has 37 firm orders and 28 options for the Dreamliner.

The company took delivery earlier this year of the last three of 60 EMB-190 jets it ordered from Brazilian aircraft-maker Embraer.

Air Canada’s class A shares closed down 57 cents, or 6.58 per cent, at $8.09 on the Toronto Stock Exchange yesterday.

The stock has lost more than half its value since being issued at $21 in late 2006.

Brewer blamed the poor stock price performance on a lack of liquidity in Air Canada shares and declines in valuations for comparable North American airlines.

Reuters News Agency

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SAN FRANCISCO–Nintendo Co. Ltd. launched its "Wii Fit" exercise game in the United States yesterday, hoping to get gamers off the couch and appeal to new audiences such as women and older people.

Nintendo is banking on Wii Fit to further broaden the appeal of its Wii gaming console, which has already become a smash hit due to its motion-sensing controller and simple, easy-to-learn games.

"There has been fitness software before, but with the positioning of it, the marketing might behind it and the product itself, it’s the biggest health product for a video game system I’ve ever seen," said IDC analyst Billy Pidgeon.

Wii Fit is the latest major title Nintendo has launched this year, one that is aimed most clearly at a non-traditional audience of mothers and older customers.

The game, which costs $90 (U.S.) and comes with a shoulder-width balance board that senses shifts in posture, should also help Nintendo address concerns over the tendency of Wii owners to buy fewer games than owners of Microsoft Corp’s Xbox 360 and Sony Corp’s PlayStation 3.

"The secret weapon of the Wii is getting more people within the household to play. Each one of those people is going to buy fewer games than the hard-core gamer would, but it adds up," Pidgeon said.

Analysts said they expect sales of Wii Fit to be limited only by how many units Nintendo can make, with some estimating that up to 30 per cent of the nearly 10 million Wii owners in the U.S. will buy the product in the next few weeks.

The game officially goes on sale in Canada tomorrow, but impatient types can head to the Eaton Centre today to practise their step-touches on a tester console, according to the company’s website http://payday-z.com. The Wii Fit Tour, as it is called, continues in Toronto until June 1, then moves to Square One in Mississauga for two weeks.

In the U.S., Wal-Mart said on its website that it has sold out its pre-order allocation of Wii Fit. Amazon.com said it was out of stock as well.

While Microsoft and Sony have focused on high-definition, ultra-realistic games, Nintendo surprised the industry with the low-cost, low-tech Wii.

In April, Nintendo sold more than 700,000 Wii machines in the U.S., nearly double that of the Xbox 360 and PS3 combined.

Wii Fit offers more than 40 activities in four categories, including aerobics, strength training, balance and yoga. It tracks users’ body mass index and weight, charting their progress and offering fitness tips.

It is the latest creation of Nintendo’s legendary game designer Shigeru Miyamoto, who has come up with many of the company’s smash hits. Nintendo has already sold two million copies of Wii Fit in Japan and recently released it in Europe.

Not everyone has been enamoured with the product. Video game news and reviews website GameSpot said the title was hamstrung by shortcomings.

"Wii Fit’s included exercises do have the potential to positively impact your health, but thanks to its lack of exercise options, poor support for multiplayer and shallow health advice, this title isn’t a gaming fitness revolution," GameSpot said.

Nintendo is initially selling Wii Fit only at its New York store, with the product available at other U.S. retailers by tomorrow.

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RIYADH–Saudi Arabia, under U.S. pressure to increase its oil output amid soaring energy prices, said yesterday it had raised production by 300,000 barrels per day on May 10 and that increase was sufficient.

Oil Minister Ali Naimi said the increase, which came in response to customers’ requests, would push output from the world’s leading producer to 9.45 million barrels per day by June. He said Saudi is capable of meeting the needs of all its customers, suggesting it would raise production further only in response to demand.

The announcement coincided with a Saudi visit by U.S. President George W. Bush to appeal for a more significant increase in output that might help bring down the price of oil, which topped $127 (U.S.) a barrel yesterday, a record high.

"Supply and demand are in balance today," the oil minister said payday advance online. "How much does Saudi Arabia need to do to satisfy people who are questioning our oil practices and policies?"

He said the Saudis increased production by 300,000 barrels per day on May 10 after some 50 customers – mostly in the U.S. – requested it. And Saudi Arabia has no objection to increasing oil production in the future if there’s a need, he said.

In Washington yesterday, the Bush administration said it is suspending oil deliveries into the government’s Strategic Petroleum Reserve storage for the remainder of the year. The move came days after Congress passed legislation requiring Bush to temporarily halt shipments into storage, leaving more in the market in hopes of lowering prices.

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SYDNEY–Shares of BHP Billiton Ltd/Plc surged to a record high on Wednesday, fuelled by speculation that a state-controlled Chinese firm was building a stake in the world's biggest mining company.

Much of the speculation centred on giant Chinese aluminium maker Chinalco, already the largest shareholder in Rio Tinto Ltd/Plc which BHP is seeking to acquire in a hostile, $177 billion all-share offer.

However, one source familiar with the matter said Chinalco had no any imminent plans to take a stake in BHP, and that the speculation was "just talk."

A Chinalco spokeswoman declined comment.

China is largely behind the huge profits that BHP and smaller rivals are generating as its booming economy gobbles up raw materials from iron ore to oil. The latest speculation is the second time in a month that Chinese firms have been named as possible buyers of a stake in BHP.

"There's a lot of rumours. I don't know what to believe," said Tom Elliott, managing director of hedge fund MM&E Capital, noting that Chinalco was mentioned as the Chinese buyer.

BHP Chief Executive Marius Kloppers told CNBC in an interview on Tuesday that he was aware of the rumours but would not comment.

"It's very difficult for us to make specific statements but certainly we've heard the same rumours over the last couple of days as you have," Kloppers said.

Earlier this month Kloppers said he was certain Chinese entities would eventually own part of BHP.

BHP stock rose nearly seven per cent in Sydney to a record A$48.90 a share and ended 6 percent higher at A$48.56 in above average volume, its biggest one-day gain since Jan. 23.

The London-listed shares rose by as much as 5.9 per cent to a new high of 2,139 pence, but by 1115 GMT had retreated to stand up 2.6 per cent at 2,072 pence.

The latest rumours suggested the Chinese buyer or buyers were aiming to accumulate a 10 per cent stake in London, possibly at the equivalent of A$53 a share. That would work out to about 2,572 pence, or a 27 percent premium to Tuesday's London close.

Chinese companies have stepped up investment in Australian miners as they search for stable supplies of iron ore, coal, nickel and other industrial staples in short supply at home http://paydayloans-on.com. In February, Chinalco paid $14 billion for 9.3 per cent of Rio Tinto.

"If they're going to have to pay high prices for commodities … it probably makes sense to own equity interests in the companies that produce those commodities, because they at least share in the benefit of those high prices," Tim Barker, an analyst with BT Investment Management said.

BHP's bid for Rio, which Kloppers sees as a way to create a super efficient mining house, has also galvanised Chinese companies, who fear a combined entity would have too much sway over pricing.

China sees its modern-day industrial revolution lasting decades, prompting it to take a longer view of metals prices and to spend sooner rather than later on securing steady supplies, according to analysts.

"I'm just really surprised that the Chinese didn't do this three years ago," said Adnan Kucukalic, equity strategist at Credit Suisse First Boston.

Australia has warned other countries it will scrutinise moves by state-owned entities to buy shares in BHP to make sure Australian interests were not threatened by a sale.

In the CNBC interview, Kloppers also would not rule out adding cash to its offer to win support from Rio's shareholders. BHP is offering 3.4 of its shares for every share in rival Rio Tinto Ltd/Plc.

However, Kloppers said commodity price movements had made the offer more attractive recently.

"Since we made our bid I think oil prices have moved up substantially, other commodity prices which we have in our portfolio moved up substantially and since we are paying with our scrip, this means that the value of our offer has effectively increased," he said.

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As Industry Minister Jim Prentice prepares to introduce new copyright legislation, Crown copyright is unlikely to be part of the reform package.

According to documents obtained under the Access to Information Act, there may be a disturbing reason behind the government’s reluctance to address it – Crown copyright costs Canadians hundreds of thousands of dollars while being used as a tool to suppress public criticism of government programs.

Dating back to the 1700s, Crown copyright reflects a centuries-old perspective that the government ought to control the public’s ability to use official documents.

Today Crown copyright extends for 50 years from creation and it requires anyone who wants to use or republish a government report, parliamentary hearing, or other protected work to first seek permission. While permission is often granted, it is not automatic.

The Canadian approach stands in sharp contrast to the situation in the U.S. where the federal government does not hold copyright over work created by an officer or employee as part of that person’s official duties.

Government reports, court cases and congressional transcripts can be freely used and published.

The existence of Crown copyright affects both the print and audio-visual worlds and is increasingly viewed as a barrier to Canadian filmmaking, political advocacy and educational publishing.

For example, while U.S. governmental reports are freely available and often used for commercial purposes without the need for prior permission, Canadian publishers seeking to release a Canadian report as a commercial title would need approval from the government to do so.

To obtain permission, the publisher would be required to provide details on the intended use and format of the work, the precise website address if the work is to appear online, as well as the estimated number of hard copies if the work is to be reprinted.

If the work is to be sold commercially, the publisher would be required to disclose the estimated selling price.

Filmmakers and educational publishers face similar barriers. Unlike their U.S. counterparts, they must budget for lengthy, expensive approval processes for the use of government clips in their films or documents in their textbooks.

Beyond the policy reasons for abandoning Crown copyright, internal government documents reveal other concerns paydayloan. Financially, the federal Crown copyright system costs taxpayers a whopping sum every year.

Documents from Public Works and Government Services Canada, which administers the Crown copyright system, reveal that in the 2006-7 fiscal year, Crown copyright generated less than $7,000 in licensing revenue while costing more than $200,000 to administer.

In most instances, Canadians obtain little return for this investment: 95 per cent of Crown copyright applications are approved, with requests ranging from archival photos to copies of the Copyright Act.

More troubling are the 5 per cent of cases where permission is declined. While in some instances refusal stems from the fact that the government does not have rights to the requested work, government documents reveal that some requests are declined for what appear to be politically motivated reasons.

For example, an educational institution’s request to reproduce a photo of a Snowbird airplane was denied on the grounds the photo was to be used in an article raising questions about the safety of the program.

Similarly, a request to reproduce a screen capture of the Nexus cross-border program with the U.S. was declined, since it was to be used in an article that would not portray the program in a favourable light.

Although it seems unlikely that Crown copyright authorization was needed to use these images, the government’s decision to deny permission smacks of censorship and misuse of Canadian copyright law.

Given the significant costs associated with a program that does more harm than good and that appears susceptible to political manipulation, any new copyright reform should eliminate Crown copyright and adopt in its place a presumption that government materials belong to the public domain to be freely used without prior permission or compensation.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist @uottawa.ca or online at www.michaelgeist.ca.

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Advertising departments should pay extra attention to auto industry trends to capitalize financially on what promises to be "an exciting decade" for car manufacturers and distributors, Canada’s leading automotive industry analyst told members of the Canadian Newspaper Association yesterday.

According to Dennis DesRosiers, the Big Three North American automakers are preparing to reinvest in their products, meaning consumers can expect many new Ford, GM and Chrysler models to hit the roads in the coming years.

"The launch of every new model comes with a media blitz," said DesRosiers, explaining how newspapers stand to profit from this trend, given that most media outlets rely on dealers and manufacturers for significant chunks of their ad revenue.

Couple these findings with the fact most Canadian car consumers say their choice in car is influenced by reviews and ads in daily newspapers, and you have an optimistic outlook for automotive ad revenues.

"At a time when advertisers are focusing on new media, we really do believe it’s important for them to keep newspapers in mind," said Aurelio Diluciano of Millward Brown, a large market research company.

When it comes to advertisements for the automotive industry, "newspapers do enjoy the second-highest level of recall (among readers/viewers) of all the medias that we track," said Diluciano.

"When someone is close to purchasing a vehicle, newspapers become the most important."

With this in mind, DesRosiers urged newspaper ad departments to keep abreast of what’s happening in the auto industry to better plan marketing strategies.

But what exactly is going on in the Canadian automotive industry?

Last year, 1.65 million Canadians purchased a new car while 2.6 million others purchased a used car.

More than half of all purchases were small, entry-level vehicles, with the sharpest sales increases occurring in the same months as the highest gas prices.

"Consumers must be really bummed when the gas price goes up 500 fast cash. They must go home and say: `Honey, we gotta get one of those small entry level cars,’" said DesRosiers.

Roughly 12 per cent of Canadians purchased large, luxury or sports cars – a small but growing market that owes its success to the long-term strength of the Canadian economy.

DesRosiers also said that while the Big Three North American manufacturers have been surpassed by import nameplates as the preferred brands of Canadian consumers, this trend might soon be reversed.

The Chrysler Marquee saw a 12 per cent increase in Canadian sales in 2007, while the Ford Motor Co. saw a 4.9 per cent increase during the corresponding period. The compares to a 4.5 per cent increase among foreign imports

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Norbord Inc. (TSX: NBD) has announced a settlement of American antitrust litigation, agreeing to pay US$30 million to purchasers of oriented strand board.

Norbord said Monday that it continues to vehemently deny violating competition laws but agreed to the settlement "to limit the risks and costs associated with a prolonged trial."

Subject to court approval of the arrangement, an initial payment of US$15 million is due by July 25, with the other $15 million to be paid by Oct. 24.

Norbord said it has also reached an agreement in principle to pay US$2.2 million into an escrow account for indirect purchasers of OSB.

"The decision to settle was both difficult and disappointing," stated CEO Barrie Shineton.

"We are certain that Norbord has not violated the law payday loan low fee. However, jury trials are inherently unpredictable and we could not guarantee a positive verdict. Given this risk, the magnitude of the plaintiffs’ claims and the fact that any damages would be tripled under U.S. antitrust law, going to trial would have been irresponsible because it would have put the entire company at risk."

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SAN JOSE–Wall Street expected Sun Microsystems Inc.'s global sales base to help it weather the U.S. economic slowdown and turn a profit in the first three months of the year.

Instead, the Santa Clara-based server and software maker stunned investors Thursday by reporting a loss in its third quarter, caused in part by sagging sales to U.S. consumer-oriented companies that are putting off big-ticket spending for better times.

Sun's shares were punished at the open of trade Friday, falling more than 19 per cent, or $3.15, to $13.18.

The company also forecast flat revenues for the fourth quarter and revealed plans to jettison between 1,500 and 2,500 jobs as it tries to snap out of a sudden financial funk.

Sun said after the market closed Thursday that it lost $34 million, or four cents per share, in the three months ended March 30. That's down from a profit of $67 million, or seven cents per share, during the year-ago period.

The results for the latest quarter include costs of four cents per share from Sun's $1 billion acquisition of open-source software company MySQL AB, a purchase that gives Sun a foothold in the rapidly expanding market for database software for Web-based companies.

Sun also took a $52 million tax hit in the third quarter, compared with a tax benefit of $3 million in the same quarter last year.

Analysts surveyed by Thomson Financial had expected Sun to earn 18 cents per share.

The stock shed $2.41, or 14.8 per cent, after hours, concluding at $13.93 after the results' release following the close of regular trading. It had ended up 67 cents, or 4.3 per cent, at $16.33 in the regular session.

Sun's sales of $3.27 billion also came in below analysts' expectations. Wall Street was predicting Sun would have $3.38 billion in sales, a miss of more than $100 million.

The guidance for flat fourth-quarter revenue disappointed Wall Street as well fast payday loans. Analysts were expecting Sun's sales for the period to grow three per cent over last year.

Sun's chief executive, Jonathan Schwartz, said in an interview that some of the weakness during the third quarter flowed from small businesses in the U.S. clamping down on spending.

"Smaller companies that could make discretionary decisions about (information technology) spending made discretionary decisions – they definitely tapped the brakes," Schwartz said.

Schwartz added that slower-than-expected sales to government agencies also dragged down the results.

Despite the credit and housing crunch that is ravaging the financial community, Schwartz said its business with the financial services sector actually came in ahead of the company's internal projections, indicating that banks and other financial institutions appear to be "using technology to drive down costs elsewhere.''

Sun executives were tightlipped on where jobs will be cut now but said many would likely be in the U.S. The company cut about 4,000 jobs through layoffs and attrition shortly after Schwartz took over from co-founder Scott McNealy in 2006 and launched a wide-ranging cost-cutting effort.

Sun, a high flyer during the dot-com heyday, survived a mortifying slump after the dot-com meltdown in which the company racked up more than $5 billion in losses. Sun had posted five straight profitable quarters before the latest setback.

The stock hasn't been able to get back to the $20 range where it stood after Sun executed a 1-for-4 reverse stock split in November. The move was designed to shed the stigma of the slumping shares, but investors viewed it as a sign of trouble.

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