Canadian & Global Business

[UrbanWaterloo]

Canadian & Global Business

http://upload.wikimedia.org/wikipedia/en/c/c9/Canadian100_bill.jpg

Important Links
Bank of Canada (http://www.bankofcanada.ca/en/index.html)
Statistics Canada (http://www.statcan.gc.ca/start-debut-eng.html)
Department of Finance Canada (http://www.fin.gc.ca/fin-eng.asp)

[UrbanWaterloo]

London Stock Exchange & TMX Merger
London & Toronto | 9 February 2011 | PDF (http://tmx.com/en/pdf/2-9-2011_TMXGroup-LSEG_TMXjoin.pdf)

http://www.londonstockexchange.com/media/img/logo_lse.gif http://www.canadiandealmakers.ca/en/meetourwinners/PublishingImages/TMX_Logo.gif

An international exchange leader strongly positioned for growth
#1 venue in the world by number of listings
#1 global listings venue for natural resources, mining, energy and clean technology
Market leader in high-performance, cost-effective cash and derivatives trading technology
Scale and reach actively managed from joint headquarters in London and Toronto, supported by international centres of excellence

London Stock Exchange Group plc (“LSEG”) and TMX Group Inc. (“TMX”) today announced an agreement to combine Europe’s and Canada’s leading diversified exchange groups in an all-share merger of equals. The merger will create a world-leading organisation and is unanimously being recommended by the Boards of both LSEG and TMX.

The combined transatlantic group (“LSEG-TMX” or the “Merged Group”) will be jointly headquartered in London and Toronto and will offer an international gateway, leading global pools of capital formation and liquidity together with a unique portfolio of highly complementary markets, products, technologies and services.

The Boards of LSEG and TMX believe that the merger is strategically compelling and will create a more diversified business with greater scale, scope, reach and efficiencies, generating substantial benefits for all stakeholders:

Global Listings Hub – A leading global listings franchise:
A flexible and deep pool of international capital and investment expertise International markets for businesses of all sizes, from venture-funded companies, through small and medium enterprises (“SMEs”) to large global corporations
The #1 listings venue in the world by number of total listings – over 6,700 companies with an aggregate market capitalisation of approximately £3.7 trillion / C$5.8 trillion
The #1 listings venue in the world for natural resources, mining, energy and clean technology companies
The #1 venue for international listings from emerging and growth markets
The #1 listings venue in the world for SMEs with approximately 3,600 combined AIM and TSX Venture Exchange listings providing deep expertise in supporting small-cap and early stage companies
Breadth of Markets – 20 trading markets / platforms across North America and Europe:
Cash equities, derivatives, fixed income and energy markets, with enhanced potential to develop new trading products and opportunities, supported by strong regional post-trade operations and information services
Information Leader – An extensive set of global information, market data and index businesses, offering customers an increased suite of products
Technology Expertise – A shared technology strategy:
Market-leading, high-performance, cost-effective cash and derivatives trading and clearing technology applied across the Merged Group
Efficient marketing and delivery to the global financial services and exchange industries


LSEG-TMX is expected to create substantial value for stakeholders and shareholders, with a robust capital structure from which to capture future growth opportunities:

Revenue Benefits – Targeting £35 million / C$56 million in year three growing to £100 million / C$160 million annual run-rate revenue benefits in year five from a variety of sources, including facilitation of cross-listings and admissions for customers (subject to regulatory approval), the wider availability of products and services via the Merged Group’s enhanced distribution and footprint, and the development of new products
Cost Synergies – Targeting annual run-rate cost synergies of £35 million / C$56 million by end of year two
Value Creation – Expected to be accretive to adjusted earnings per share (post-cost synergies) for both LSEG and TMX shareholders in the first full year following completion

Commenting on today’s announcement, Chris Gibson-Smith, Chairman of London Stock Exchange Group plc stated:

“We are today announcing the creation of a global leader in the exchange space. Building on our own shared long histories of excellence in capital markets, financial strength and cultures of internationally respected governance, I believe that together we will be able to offer shareholders and customers a business significantly greater than the sum of our parts. This merger comes at a hugely important time in the history of capital markets.”
Wayne Fox, Chairman of TMX Group Inc. added:

“Two highly successful and profitable institutions are joining forces to create a more diversified and international company. This merger of equals will benefit shareholders, issuers, customers, employees and other stakeholders of both organisations. As important, it will have a positive impact on the business communities in Canada, the UK and Italy. I look forward to working with my fellow directors and the combined team to create one of the world’s leading exchange groups.”
The Board of the Merged Group will consist of fifteen directors, eight to be nominated by LSEG (of which it is envisaged three will be from Borsa Italiana), and seven to be nominated by TMX. Wayne Fox will be the non-executive Chairman of the Board of the Merged Group, and Chris Gibson-Smith and Paolo Scaroni will be Deputy Chairmen. Chris Gibson-Smith remains as Chairman of London Stock Exchange plc.

The executive Board members of LSEG-TMX will be:

CEO - Xavier Rolet, CEO of LSEG (based in London)
President - Thomas Kloet, CEO of TMX (based in Toronto)
CFO - Michael Ptasznik, CFO of TMX (based in Toronto)
Director - Raffaele Jerusalmi, CEO of Borsa Italiana (based in Milan)

The executive management and senior leadership of the Merged Group will be drawn from a balance of leaders from both organisations and will be represented in its joint headquarters of London and Toronto as well as other core centres, including Calgary, Colombo, Milan, Montreal, Rome and Vancouver. Based in Toronto, the President, reporting to the CEO, will manage the Merged Group’s business units, as well as drive the implementation of strategy, mergers & acquisitions, partnerships and strategic ventures.

The merger recognises the existing centres of excellence within the Merged Group and reinforces these strengths by assigning global responsibility across its geographic footprint, with global leadership in: Toronto for primary markets (listings and other issuer services across the Merged Group); Montreal for derivatives; and Calgary for energy. London will continue as a key centre for international listings with global responsibility for technology solutions, information services and post-trade services. For its part, Milan will be the centre for fixed income and equities trading, and European post-trade. Montreal, Toronto, Milan and Colombo will remain centres of excellence in the development of technology for the Merged Group and for the expanding external technology services business.

Xavier Rolet, CEO of London Stock Exchange Group plc said:

“This is an incredibly exciting merger with considerable growth opportunities. We are creating the world's largest listings venue for the commodities, energy and natural resources sectors, as well as the premium market for small, mid-size and growth companies. This new international leader, marrying the right cost structure, financial strength, technological expertise and product portfolio, will be strongly positioned to capitalise on growth opportunities in emerging markets and deliver them to our customers in North America, Europe and beyond. Together, we will also be uniquely positioned to offer high-performance, low-cost technology solutions to our exchange clients around the world. We are aiming at nothing less than becoming a true powerhouse in the global exchange business.”
Thomas Kloet, CEO of TMX Group Inc. added the following:

“We are creating an international group with deep expertise, undeniable leadership in key sectors and the ability to compete and win on the global stage. Canadian customers will benefit from access to one of the world’s deepest capital pools while European issuers will have an effective gateway to North American financial markets. With some of the most valuable and respected brands in the exchange world, this merger will open new growth opportunities for each of our businesses and all of our stakeholders. This merger brings together talented market professionals across a wide geography, positioning the group for continued leadership in financial markets.”
LSEG-TMX will operate a broad and highly diversified portfolio of successful businesses and brands across multiple geographies, providing trading and post-trade services in cash equities, derivatives, energy and fixed income, and offering global information services and technology solutions. In addition, with access across the company to the cutting-edge SOLA derivatives trading platform and MillenniumIT assets, the Merged Group will offer the marketplace best-in-class capabilities and applications as well as a strong and efficient platform through which to market technology to the global exchange and financial services industries.

Under the terms of the Merger Agreement, TMX shareholders will receive 2.9963 LSEG ordinary shares for each TMX share. LSEG shareholders will therefore own 55% and TMX shareholders will own 45% of the enlarged share capital of LSEG, the holding company of the Merged Group, which will be renamed after closing. The Merged Group will be listed on both the London Stock Exchange and the Toronto Stock Exchange. The various operating exchanges in the Merged Group will continue under their existing recognised brand names.

For the last twelve months ended 30 September 2010, LSEG reported revenues of £633 million / C$1,027 million, whereas for the last twelve months ended 31 December 2010 TMX reported revenues, adjusted for differences between LSEG and TMX in the accounting treatment of initial and additional listing fees billed, of £394 million / C$626 million. For the same periods, LSEG reported cash generated from operations of £340 million / C$551 million and TMX reported cash flows from operating activities of £176 million / C$280 million.

Completion of the merger is subject to customary regulatory and other approvals, including approval by LSEG and TMX shareholders and court approval in Ontario. Each of LSEG’s and TMX’s markets will continue to be regulated in accordance with local requirements by their existing regulators. Provisions made to satisfy the requirements of the Investment Canada Act as well as Canadian provincial securities regulators will be made public.

[Waterlooer]

TSX And LSE To Merge
Feb 9, 2011 | 570 News | Link (http://www.570news.com/radio/570news/article/181070--tsx-and-lse-to-merge)


It will be the biggest resource stock exchange in the world.

The operator of the Toronto Stock Exchange and the London Stock Exchange have announced they're merging.

The announcement came down around 2 am Wednesday morning, just hours after the two said there were in merger negotiations.

The merger, which is subject to regulatory approvals, is unanimously being recommended by the boards of both exchanges. The T-M-X Group and the L-S-E say the combined company would be worth over $6-billion, subject to regulatory approvals.

L-S-E shareholders would hold just over 50% of the combined company.

The new entity will need the blessing of Industry Minister Tony Clement. He recently rejected B-H-P Billiton's $39-billion takeover bid for Saskatoon's PotashCorp because he didn't believe it would be a benefit to Canada.

[UrbanWaterloo]

Bank of Canada maintains overnight rate target at 1 per cent
1 March 2011 | Link (http://www.bankofcanada.ca/en/fixed-dates/2011/rate_010311.html)

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding broadly in line with the Bank’s projection in its January Monetary Policy Report (MPR), although risks remain elevated. U.S. activity is solidifying and remains supported by stimulative fiscal and monetary policies. Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which could be further reinforced temporarily by supply shocks arising from recent geopolitical events.

The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand. While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes. Business investment continues to expand rapidly as companies take advantage of stimulative financial conditions and respond to competitive imperatives. There is early evidence of a recovery in net exports, supported by stronger U.S. activity and global demand for commodities. However, the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.

While global inflationary pressures are rising, inflation in Canada has been consistent with the Bank's expectations. Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the economy.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information Note
The next scheduled date for announcing the overnight rate target is 12 April 2011. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011.

[benjaminbach]

GDP grew at a 3.3% annualized rate in Q4 2010

[UrbanWaterloo]

Here's the report benjaminbach is referring to...


Canadian Economic Accounts
4Q2010 and December 2010 | Link (http://www.statcan.gc.ca/daily-quotidien/110228/dq110228a-eng.htm)

http://www.statcan.gc.ca/daily-quotidien/110228/c110228a.gif http://www.statcan.gc.ca/daily-quotidien/110228/c110228d.gif

Real gross domestic product (GDP) rose 0.8% in the fourth quarter, led by exports, following a 0.4% gain in the previous quarter. Final domestic demand advanced 1.2%. On a monthly basis, real GDP by industry increased 0.5% in December.

Higher demand for exports (+4.0%) contributed the most to the fourth-quarter growth in GDP.

Final domestic demand expanded as consumer spending increased 1.2%. In particular, purchases of durable goods grew 2.9%, far outpacing the third-quarter growth of 0.6%.

Businesses reduced inventories by $5 billion in the fourth quarter, after strong build-ups in the two previous quarters.

Business investment in plant and equipment expanded for the fourth consecutive quarter, while investment in housing fell for the second time in a row.

All major industrial sectors, with the exception of manufacturing, increased their output in the fourth quarter. Service-producing industries increased 0.9% while goods production increased 0.5%. The largest contributing sector was mining and oil and gas extraction. The public sector (education, health services and public administration combined), wholesale and retail trade, real estate and construction also contributed to the overall increase. Manufacturing declined following five consecutive quarterly increases.

Expressed at an annualized rate, real GDP in the fourth quarter grew 3.3%, after expanding 1.8% in the third quarter. By comparison, real GDP in the US grew 2.8% in the fourth quarter.

For the year 2010 as a whole, real GDP grew 3.1%, following a 2.5% decline in 2009.

[UrbanWaterloo]

Is it just a coincidence that the New York Stock Exchange's most reliable stock over the last decade is related to the railroad industry? Or is it an indicator of the renaissance of rail? For Reference: Webtec Website (http://www.wabtec.com/home.asp)

The Only NYSE Stock to Gain Every Year for 10 Years
Mar 24, 2011 | CNBC | Link (http://www.cnbc.com/id/42248737)


Wabtec, the technology-based products and services company for rail, transit and industry, is the only stock on the NYSE [NYX 35.08 0.49 (+1.42%) ] to go up in each of the last ten years.

...On Tuesday, Wabtec signed a $27 million contract to provide Metrolink, a commuter rail agency that serves a 512-mile system in Southern California. The company will provide technology called Positive Train control, which uses GPS to monitor the speed and location of freight and passenger trains.

Earlier this month, Xorail, a subsidiary of Wabtec, signed a $165 million contract with MRS Logistica in Brazil (1,000 miles of track that connect Rio de Janeiro, Minas Gerais and Sao Paulo) to design and install Communications-Based Train Control...

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