Jan 24, 2023
The Daily Chase: Competition Bureau appeals Rogers-Shaw deal; Magna cuts 2022 outlook
First Look With Surveillance: UK Deficit, BOE Expected
Competition Commissioner Matthew Boswell is getting one last chance to try to scuttle Rogers Communications' planned $20-billion takeover of Shaw Communications, with the Competition Bureau's appeal set to be heard before the courts later this morning. Boswell's looking to overturn an earlier decision that greenlit the deal, which he argues is deleterious to telecom competition, arguing there were errors in how the Competition Tribunal assessed the planned $2.85-billion sale of Shaw's Freedom Mobile unit to Quebecor's Vidéotron. The hearing is set to be heard in a single day, with the decision date unclear on a ruling, though it's worth noting that the outside date for the deal to close (barring another amendment) is set for Jan. 31.
TSX HITS SEVEN-MONTH HIGH
Don't look now, but the S&P/TSX Composite Index has just hit its highest level since June 8th of last year, as the New Year's rally pushes stocks higher. To wit, Toronto's benchmark composite has closed lower in all of three sessions so far this year, and is coming off a 128 point advance in yesterday's trade. Back to that June timeline – since that earlier high, Bombardier, Boyd Group Services and Enghouse Systems have been leading the way, with the former up a whopping 123 per cent.
IN CONVERSATION WITH RBC CEO DAVE MCKAY
Now, this one sort of speaks for itself as Jon Erlichman sits down with the head of Canada's largest bank. Expect to hear McKay's thoughts on the macroeconomic environment, given recessionary fears and rising rates, and I'm keen to hear his thoughts on how he thinks highly-indebted consumers will deal with the pinch of the combination of that higher cost of borrowing alongside inflation running at three times the Bank of Canada's target rate. Stay tuned for that full conversation at 1:10 p.m. EST.
MAGNA CUTS 2022 MARGIN OUTLOOK
We'll be keeping a close eye on shares of Magna after the company lowered its adjusted EBITDA margin outlook for last year. The company says it expects margins to come in at about 4.3 per cent for fiscal 2022, below the 4.8-5.0 per cent range it originally forecast back in November. The auto parts firm says a number of factors are at play, including underperformance at certain facilities and higher labour inefficiencies due to unpredictable production schedules on the part of customers.
VETERAN CIBC EXEC TAKES TOP JOB AT ELEMENT FLEET
Well, it didn't take too long to find out where veteran CIBC executive Laura Dottori-Attanasio was headed after her somewhat surprising plan to depart the lender. Dottori-Attanasio is heading to Element Fleet Management, where she'll take over the CEO role from Jay Forbes as of May 10 (Dottori-Attanasio will initially start as company president as of Feb. 15, so there's a transition period.) TO the point of “somewhat surprising”, Dottori-Attanasio served in a number of senior and executive roles at CIBC over 14 years – including a stint as head of personal and business banking and earlier as Chief Risk Officer –was widely considered as a possible successor to Victor Dodig, so some eyebrows were raised when she announced her exit earlier this month.
METRO TOPS PROFIT ESTIMATES, HIKES DIVIDEND
Looks like a solid quarter out of Metro, which exceeded analyst expectations on both the top and bottom line in Q1. Sales increased across the board, with grocery same-store sales up 7.5 per cent and sales at pharmacies open at least a year 7.7 per cent higher. The company says the former was primarily inflation-driven, while the latter appears to be reflective of more Canadians heading back to work and having more active social lives, with over-the-counter products, cosmetics and health and beauty products driving the increase. Metro is also increasing its quarterly dividend 10 per cent to $0.3025.
OTHER NOTABLE STORIES
- Shares of 3M are under pressure in the premarket – down about four per cent – after the company missed quarterly earnings estimates and announced plans to cut 2,500 jobs.
- General Electric is forecasting a lower-than-expected adjusted profit for 2023 – a range of US$1.60-$2.00 against street expectations for US$2.37 – as the company faces persistent problems at its money-losing renewable energy unit.
- Similar story over at Verizon, where profit expectations missed Wall Street estimates, as the company's costly wireless promotions weigh on the bottom line.
- Notable data: S&P Global PMIs
- Notable earnings: Microsoft, Canadian National Railway, Texas Instruments, Verizon Communications, Johnson & Johnson, Halliburton, General Electric, Metro Inc., 3M, Lockheed Martin
- Federal Court of Appeal will hear the Competition Bureau's appeal of the Competition Tribunal's decision to allow Rogers Communications proposed takeover of Shaw Communications