Friday May 27, 2011
S&P/TSX Composite
Dow Jones
S&P 500
NASDAQ
S&P/TSX Venture
Philadelphia SOX
Crude Oil (US$/brrl)
Gas (US$/mmbtu)
Copper (US$/lb)
Gold (US$/oz)
Nickel (US$/lb)
Palladium (US$/oz)
Platinum (US$/oz)
Silver (US$/oz)
Uranium (US$/lb)
Canadian Dollar
30 Year Canada
30 Year U.S.
Volatility Index (VIX)
+24.43
+8.10
+5.22
+21.54
+23.03
+4.03
-1.09
-0.06
+0.01
-3.90
+0.23
+5.25
-10.50
-0.62
-0.25
-0.0015
-0.02
-0.06
-0.890
13775.90
12402.76
1325.69
2782.92
2072.04
428.24
100.23
4.36
4.11
1522.80
10.61
755.00
1769.50
37.30
57.50
1.0216
3.483
4.222
16.18
Know When to Fold ’Em
A Pennsylvania businessman
credited luck with helping
him win a total $15.1 million
from New Jersey casinos
during a six-month period.
Don Johnson, 49, of Bensalem, has come
forward as the previously unidentified man
whose blackjack playing at Atlantic City
casinos earned him $4.23 million from
Caesars, $5 million from Borgata and $5.8
million from Tropicana, the Press of Atlantic
City reported Wednesday.
“I’ll take luck over any other skill,” Johnson
said. “There’s no magic to this. Eventually,
someone would whack them. I’m just glad it
was me.” Johnson serves as CEO of Heritage
Development LLC, based in Wyoming, which
uses computer-assisted wagering programs
for horse racing.
“I don’t think they will let me play anymore,”
he said of the Atlantic City casinos. “But it’s
not going to change my life. If I don’t play
blackjack, I’ll just go to the horse races.”
CANADA
Initial U.S. jobless claims that came in higher than expected and Canadian
bank earnings that were lower than expected weighed on investor
sentiment Thursday. Both the Toronto-Dominion (TD) and Canadian
Imperial Bank of Commerce (CIBC) reported first-quarter profit gains,
but not enough to match expectations. National Bank (NA) posted a 13%
increase in earnings and raised its dividend. National also said it is
expanding in wealth management by purchasing Wellington West
Holdings, a mid-sized brokerage based in Winnipeg, in a deal that values
the firm at $333-million.
Lundin Mining (LUN) shares lost one-fifth of their value after the copperfocused miner said it failed to find an acceptable offer to sell all or parts of
the company. While the company said all of the proposals it received were
too low for its assets, including its coveted stake in a massive copper mine
in Africa, it’s still open to higher bids.
Investors also took in another development in the battle for control of the
operator of the Toronto Stock Exchange. The Maple Group Acquisition
Corp., a consortium of Canadian pension funds and banks, is taking its
hostile $3.6-billion bid for TMX Group (X) directly to its shareholders.
The move late Wednesday came after the stock exchange operator
accelerated a shareholder vote on its favoured plan to merge with the
London Stock Exchange.
Media company Quebecor (QBR.B) said first-quarter profits slipped to
$34.3 million, as its revenues grew 4.5%, although wireless business costs
weighed on results.
UNITED STATES
Stocks shook off early losses Thursday as technology and consumer
discretionary stocks countered the weight of weaker-than-forecast jobless
claims and first-quarter economic growth.
Microsoft (MSFT) was the Dow’s best performer, after Greenhorn Capital
hedge-fund manager David Einhorn reportedly called on Steve Ballmer to
step down, calling the chief executive an “overhang” on the company’s
stock. NetApp (NTAP) also boosted tech stocks, as the data-management
company forecast earnings that topped analysts’ projections.
Tiffany (TIF), the world’s second-largest luxury jewellery retailer,
advanced after raising its full-year earnings forecast, as profit beat
estimates, benefitting from resurgent demand from upscale shoppers.
H.J. Heinz.’s (HNZ) global expansion efforts are paying off, driving its
fourth-quarter profit up 16%. But the world’s biggest ketchup maker said it
needs to raise prices and cut jobs to continue its profitable path.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
2
ECON 101
CANADIAN Data Today: No scheduled releases.
U.S. Data Today: This morning, Personal Income (Apr) is expected to rise by 0.4%, after gaining 0.5% the previous month,
while Personal Spending (Apr) should also rise by 0.4%, after gaining 0.6% previously. The University of Michigan
Confidence Index (May) is expected to remain at 72.4, while Pending Home Sales (Apr) should fall by 1.0%, after gaining
5.1% previously.
ECON 201
U.S. Gross Domestic Product (Q1) rose 1.8%, short of the 2.2% growth expected by economists. Meanwhile, Personal
Consumption (Q1) increased by 2.2%, below the 2.8% that had been forecast.
U.S. Initial Jobless Claims (May 21) increased to 424K while economists had expected them to fall to 404K. Continuing
Claims (May 4) fell to 3,690K, better than the expected 3,700K.
India’s Food Inflation (May 14) quickened to 8.55% after coming in at 7.47% a week earlier.
German Import Prices (Apr) rose 9.4% year over year after climbing 11.3% in March.
MARKET MOVERS
Technical Indicators:
Advancing Issues
Declining Issues
Unchanged Issues
Total Issues
New Highs
New Lows
Up Volume (000s)
Down Volume (000s)
Unchanged Volume (000s)
Total Volume (000s)
TSX
738 (47%)
626 (40%)
193 (12%)
1,557
28
15
157,603
197,889
13,640
3,691,319
TSX VENTURE
538 (39%)
497 (36%)
362 (26%)
1,397
18
35
131,789
67,247
35,365
2,344,009
NYSE
2,810 (69%)
1,135 (28%)
121 (3%)
4,066
89
35
2,482,529
1,075,626
70,313
36,284,677
AMEX
452 (65%)
206 (30%)
35 (5%)
693
11
8
666,752
89,022
1,435
7,572,101
NASDAQ
1,838 (68%)
724 (27%)
123 (5%)
2,685
70
52
1,441,955
386,567
27,630
18,561,519
Source: Yahoo! Finance
Notable 52-Week Highs:
ATCO Ltd.
Akita Drilling
Avnel Gold Mining
BCE Inc.
Brookfield Infrastructure LP
Bank of Montreal
Bank of Nova Scotia
Bank of Nova Scotia
Brookfield Soundvest Equity Fd
Centric Health
Canadian Helicopters Group
CIBC
CIBC
CIBC
ACO.X
AKT.A
AVK
BCE.PR.T
BIP.UN
BMO.PR.K
BNS.PR.L
BNS.PR.M
BSE.UN
CHH
CHL.B
CM.PR.H
CM.PR.I
CM.PR.J
$ 65.95
$ 12.34
$ 0.70
$ 23.65
$ 24.50
$ 25.75
$ 24.84
$ 24.89
$ 5.96
$ 2.48
$ 24.96
$ 25.93
$ 25.30
$ 25.00
Constellation Software
Canadian Utilities
Canadian Utilities
Calloway REIT
Horizons U.S. Dollar Currency
Dollarama Inc.
E-L Financial Corporation
Enbridge Inc.
Equity Financial Holdings
CGI Group
Great-West Lifeco
REIT INDEXPLUS Income Fund
IGM Financial
MEG Energy Corp.
CSU
CU
CU.X
CWT.UN
DLR
DOL
ELF.PR.G
ENB
EQI
GIB.A
GWO.PR.L
IDR.UN
IGM.PR.B
MEG
$ 75.51
$ 59.48
$ 59.00
$ 25.95
$ 9.80
$ 31.90
$ 21.24
$ 31.93
$ 10.74
$ 21.40
$ 25.69
$ 11.96
$ 25.88
$ 50.43
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
Mandalay Resources Corp
Miranda Technologies
National Bank of Canada
Novadaq Technologies
Northland Power Inc.
Jean Coutu Group (PJC)
Paladin Labs Inc.
Pembina Pipeline Corp.
PRT Forest Regen. Income Fund
RuggedCom Inc.
Royal Bank of Canada
Royal Bank of Canada
3
MND
MT
NA.PR.L
NDQ
NPI
PJC.A
PLB
PPL
PRT.UN
RCM
RY.PR.A
RY.PR.B
$ 0.94
$ 7.55
$ 25.08
$ 5.39
$ 16.87
$ 11.55
$ 45.08
$ 24.73
$ 3.55
$ 22.10
$ 24.61
$ 24.99
Royal Bank of Canada
Royal Bank of Canada
Royal Bank of Canada
Royal Bank of Canada
Royal Bank of Canada
Senvest Capital
Solium Capital Inc
TELUS Corp.
TransCanada Corp.
George Weston
iShares S&P/TSX Cap. Utilities
YM BioSciences
RY.PR.C
RY.PR.D
RY.PR.E
RY.PR.F
RY.PR.G
SEC
SUM
T
TRP
WN.PR.D
XUT
YM
$ 24.68
$ 24.65
$ 24.49
$ 24.38
$ 24.59
$ 89.50
$ 2.25
$ 53.00
$ 43.05
$ 24.00
$ 21.15
$ 3.70
ARF
BKI
CSD
CSD.A
CTU.A
DDS
GO
$ 13.70
$ 0.97
$ 20.11
$ 20.13
$ 9.68
$ 0.28
$ 3.14
Heritage Oil
HBP S&P500 VIX ST Future Bull+
Liquidation World
Magma Metals
Sterling Shoes Inc.
Ten Peaks Coffee Company
Yellow Media Inc.
HOC
HVU
LQW
MMW
SSI
TPK
YLO
$ 3.50
$ 11.32
$ 0.06
$ 0.24
$ 1.00
$ 2.87
$ 4.09
Notable 52-Week Lows:
Armtec Infrastructure
Black Iron Inc.
Claym Adv. Short Duration High
Claym Adv. Short Duration High
Le Chateau
Labopharm
Galleon Energy
CANADIAN EQUITIES OF INTEREST
Listed Alphabetically by Symbol
Rhodium ETF
Eastern Platinum (ELR : TSX : $1.01), Net Change -0.02, % Change: -1.94%, Volume 4,259,347
The first of its kind...This week, Deutsche Bank announced a Physical Rhodium ETF (XRHO: LN). The product is 100%
backed by physical rhodium and is designed to track the U.S. dollar spot price less fees. A note from the bank indicates that this
ETF allows investors to directly access rhodium spot returns in a “simple, secured and liquid manner.” The ETF is linked to the
rhodium spot price and is back by allocated rhodium. The global rhodium market in only 750,000 oz of demand per year – or
$1.5 billion. Therefore, with the new ETF opening up the relatively illiquid market to speculators, a significant rise in the price
of rhodium could be just around the corner. Rhodium is primarily used (80% of demand) in three-way catalysts (for engines),
and some are speculating that since the announcement of the rhodium ETF the automobile producers have likely been in the
market buying as much rhodium as they can – explaining the recent uptick in the rhodium price. In relation to producers,
rhodium accounts for approximately 10% of PGM production and even more on a revenue basis due to the rhodium price being
higher than the PGM basket price. A spike in the rhodium price could be a material boost to earnings for PGM producers.
Peru Elections
Bear Creek Mining* (BCM : TSX-V : $6.99), Net Change: -0.01, % Change: -0.14%, Volume: 333,162
Candente Copper* (DNT : TSX : $1.80), Net Change: 0.13, % Change: 7.78%, Volume: 1,147,529
Rio Alto Mining* (RIO : TSX-V : $2.65), Net Change: 0.16, % Change: 6.43%, Volume: 3,818,901
Southern Copper* (SCCO : NYSE : US$35.88), Net Change: 0.42, % Change: 1.18%, Volume: 1,711,905
Sulliden Gold* (SUE : TSX : $2.39), Net Change: 0.11, % Change: 4.82%, Volume: 1,442,372
Increasing her lead. According to the latest poll (released Thursday) conducted by Datum, gives centre-right congresswoman
Keiko Fujimori 52.9% of intentions for valid votes for President in the June 5 run-off election, and left-nationalist candidate
Ollanta Humala 47.1%. This latest poll, which surveyed 1,214 people and was conducted on Sunday, indicates an increase in
Fujimori’s lead of about one percentage point from the previous poll, conducted earlier this month. One brokerage following the
elections highlighted, "Fujimori is consistently, though slowly, opening up her lead over Humala. Significantly,
blank/undecided votes are diminishing, in line with the trend so far. Also, Fujimori is gaining ground in terms of opinion on
social aspects; 50% of interviewees believe Fujimori will improve services and education, 43.7% think she will improve
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
4
security, and 48.1% feel she will move legislation to promote land ownership rights." Going forward, the next key event is the
presidential debate between Fujimori and Humala, which will take place on Sunday, May 29, one week before the runoff.
Separately on Thursday, MarketWatch.com reported that an exchange offering stocks from Chile, Colombia and Peru is slated
to start operating next week, seeking to capitalize on surging investor interest in the region. The Mercados Integrados
LatinoAmericanos exchange, scheduled to begin operating on May 30, will tie together the three countries that “really are the
emerging part market of Latin America,” according to Bruno Del Alma, chief executive of exchange-traded fund firm Global X
Funds. The combination of the exchanges, dubbed MILA, “was a big factor in terms of us thinking about the region, but it
underpins a much broader story about both the growth rates and growing political and economic integration across those three
markets,” he said.
Copper Sector
Failing Grade…While copper has traded down from an all-time high of $4.65 into the $4.00 range, production issues continue
to plague some of the world’s largest producers. Yesterday, Chilean copper giant Codelco announced that workers at their
Teniente Mine started labour action. Teniente produces 400,000 tonnes of copper annually and is Chile’s fourth-largest copper
mine. In the press release, Codelco noted that operations are continuing, however, at a slower pace. The announcement falls on
the back of Wednesday’s announcement from BHP Billiton (BHP), who commented that production at their 57.5%-owned
Escondida mine would be down by 4.2% compared to the same period last year. Escondida is the world’s largest copper mine,
producing approximately 1,000,000 tonnes of copper annually. BHP blamed the shortfall on lower grades, and maintenance
work at the mines crushing and conveyor belt systems. Lower grades are a continuing theme amongst producers. Some of the
globes largest copper mines have been in production for decades and have exhausted all their high-grade ore. This creeping
copper grade decay will be a lasting theme in global copper markets.
CIBC* (CM : TSX : $81.15), Net Change: -3.30, % Change: -3.91%, Volume: 2,661,291
National Bank of Canada* (NA : TSX : $80.70), Net Change: -0.17, % Change: -0.21%, Volume: 470,670
TD Bank* (TD : TSX : $84.02), Net Change: -1.27, % Change: -1.49%, Volume: 2,394,374
Three banks for Thursday. TD reported Q2/11 adjusted EPS of $1.59, versus Canaccord Genuity's estimate of $1.58 and
consensus of $1.60. Earnings up 16% YoY. Relative to Canaccord Genuity estimates, Q2/11 revenue was up 7% and weaker
than expected – almost entirely trading related. Trading revenue of $299 million was down 19% YoY and lower than Canaccord
Genuity estimates of $350 million. In TD's domestic retail business, earnings were up 11% - a good result, but much lower than
the 20% plus growth the Street has seen over last few quarters. CM reported a weak Q2/11 result, with adjusted EPS of $1.75,
versus Canaccord Genuity's estimate of $1.81 and consensus of $1.81. Earnings were up 20% from a weak Q2/10, but down
11% from Q1/11. Domestic retail earnings were $553 million, up 14% YoY, but down 12% versus last quarter. Wholesale
banking reported net income of $112 million for the quarter, down $24 million from the prior quarter, mainly due to lower
corporate and investment banking revenue was partially offset by lower non-interest expenses. Underwriting was much weaker
than expected. Bottom line, CM did not have a strong quarter. NA reported an in-line Q2/11 result, EPS was $1.69, the Street
was at $1.68, while Canaccord Genuity was at $1.70. Relative to Canaccord Genuity estimates, NA's revenue was slightly
higher than expected on good underwriting and advisory revenue (up 35% YoY). Most revenue lines were in line with
Canaccord Genuity forecasts. PCLs were slightly lower than expected, but this was offset by higher expenses. Operating
leverage sunk to negative territory, this was surprising given the very strong cost control NA had exhibited over the last few
quarters. NA increased its quarterly dividend by 7.6% to $0.71 from $0.66 – this was in-line with expectations. Finally, NA
announced plans to purchase Winnipeg broker Wellington West for $273 million with common shares and cash.
Churchill* (CUQ : TSX : $18.70), Net Change: -0.81, % Change: -4.15%, Volume: 116,811
More seasonal than usual? Investors fled Churchill Corp. as weak Q1 results overshadowed the announcement of the
company’s first-ever quarterly dividend. For the quarter, the company reported revenue of $305 million, missing both
Canaccord Genuity Infrastructure Analyst Yuri Lynk’s estimate of $324 million and the consensus of $343 million. Gross
margin was 12.5%, in line with his 12.0% estimate; however, SG&A came in at $22.0 million, or $1.5 million more than his
forecast. This resulted in EBITDA coming in at $16 million versus Lynk’s $18 million and the Street at $21 million. By way of
comparison, Churchill generated $29 million in EBITDA in Q4/10 and $11 million last year. On the bottom line, EPS came in
at $0.24, again, consistent with Lynk’s $0.25 estimate but way below the Street at $0.35. Commenting on the seemingly big
miss, Lynk notes that his estimates were under IFRS and, thus, he took into account the fact maintenance at Broda had to be
expensed as incurred whereas under Canadian GAAP, the expense was previously spread over the whole year. This resulted in
Churchill’s first quarter being more seasonal than usual as equipment maintenance work is performed. Looking ahead,
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
5
management’s outlook was mainly unchanged in terms of gross margin. Management noted gross margin should not begin to
improve until late 2011 and into 2012; consistent with earlier "soft guidance." On a positive note, Churchill declared a quarterly
dividend of $0.12 per share (2.5% annual yield and 27% payout ratio) payable July 15. Lynk expected the dividend to
accompany Q2 or Q3 results and views the fact the Board is comfortable paying it now as clearly positive. Lynk add that it his
impression that the pace of new awards at Stuart Olson Dominion is accelerating with activity levels quickly approaching past
peak levels. Churchill remains one of Lynk’s Focus List picks.
Galleon Energy* (GO : TSX : $3.15), Net Change: -0.33, % Change: -9.48%, Volume: 1,361,136
Ready, set, GO. Galleon tumbled after reporting a Q1 loss and the resignation of its President and CEO, effective immediately.
Average production for the quarter came in at 13,048 boe/d, comprised of 4,148 b/d of oil and NGLs and 53.4 mmcf/d of natural
gas. This was in-line with analyst estimates of 13,075 boe/d (3,837 b/d and 55.4 mmcf/d) and represented a decline of 3.7% over
last quarter. A Bay Street analyst notes that in addition to delays in accessing completion crews, a shift in the company’s capital
spending focus contributed to lower total volumes. With the higher quality production base, the company generated CFPS of
$0.32, well ahead of the $0.28 analysts expected. Importantly, Galleon is altering its 2011 spending to increase its focus on an
emerging Montney light oil project in its Eastern Montney Business Unit. The analyst notes that the company has delivered
good results to date on this new opportunity and has another 16 horizontal wells planned this year. While production additions
from this new play are expected to be weighted towards the latter portion of the year it is expected to boost the company’s oil
weighting heading into 2012. Based on the shifting capital budget, management lowered its 2011 forecast to 12,640 boe/d from
prior guidance of 14,500 boe/d. Notably, the impact of lower production should be partially offset by the increase in oil
weighting both this year and next. Along with Q1 results, the company announced that President and CEO Steve Sugianto had
resigned. The analyst did not see this as particularly surprising as Sugianto “had assumed a less public role when the value
maximization process was completed last year, and GO has formed a search committee to find a new President & CEO for the
company”.
Hana Mining (HMG : TSX-X : $2.41), Net Change: -0.24, % Change: -9.06%, Volume: 807,266
In the Banana Zone. Hana Mining was lower after announcing it was postponing the completion of its preliminary economic
assessment (PEA), which was expected this month (and already delayed from March). The reason given is that the December
2010 NI43-101 compliant resource for the Banana Zone "may underestimate copper and silver grades", and "the company is
currently in the process of remodelling the resource estimate". It seems there are two ways to look at this: 1) Positive bias – the
market was disappointed with the grade of the December 2010 resource, so the possibility of higher grades is positive; 2)
Negative bias – the company may have concluded that the PEA would disappoint the market, so has gone back to the drawing
board to try to improve economics. Either way, Canaccord Genuity Base Metals Analyst Gary Lampard is bullish on the story
based on valuation. He also see potential upside from: 1) Additional high-grade resource discoveries away from the Banana
Zone; 2) Underground mining development beyond an economic stripping ratio; and 3) The Chalcocite zone of the Banana
Zone, should the material prove to be economically leachable, with sufficient power availability for on-site electro winning.
Lundin Mining* (LUN : TSX : $7.08), Net Change: -1.48, % Change: -17.29%, Volume: 52,341,396
It's status quo. Lundin has concluded its previously-announced strategic process to explore alternatives for the creation of
shareholder value. While the company received a number of non-binding expressions of interest with respect to both its assets
and the company, the Board of Directors, have determined that these proposals did not adequately value Lundin or its assets. As
such, the Board of Directors, believe the best way to create shareholder value is to continue to manage and develop the
company's assets and to actively seek growth opportunities. In a related announcement, Lundin stated that, in accordance with
previously-announced plans to retire during H1/11, company CEO Phil Wright will be stepping down as effective June 30,
2011, at which time Paul Conibear, currently Lundin's SVP Corporate Development, will be appointed as Interim CEO. The
Board has appointed a search committee to recruit a permanent CEO and an executive recruiting firm has been retained. Finally,
Lundin announced that the Shareholder Rights Plan adopted on March 29, 2011 will expire in accordance with its terms on May
31, 2011. Earlier this month (May 10, 2011), in conjunction with its Q1/11 results, the company indicated that there had been
very good interest in Tenke, good interest in the European assets, and good interest in selling Lundin as a whole. The company
also disclosed that it had yet to approach Freeport McMoran (FCX) in regards to the right of first refusal FCX has on Tenke.
In conjunction with its Q1/11 results, Lundin also re-affirmed its previously issued 2011 contained production guidance of
110,600 tonnes of copper (including Tenke), 120,000 tonnes of zinc, and 44,000 tonnes of lead. The guidance represents yoy
increases of 0.7%, 33.1%, and 11.2%, respectively. Nickel production at Aguablanca, which was suspended in December 2010
due to a pit-slope failure, is not anticipated to restart until early 2012. While unit cash cost guidance remains at $0.20/lb of zinc
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
6
at Zinkgruvan, cost guidance was modestly increased at Neves-Corvo to $1.40/lb (from $1.30/lb). Lundin has experienced
delays in accessing the remaining high-grade Corvo area at Neves-Corvo and now expects to move more tonnes at a lower grade
to reach its previously released production guidance of 76,000 tonnes of Cu and 25,000 tonnes of Zn.
Orezone Gold* (ORE : TSX : $4.10), Net Change: 0.03, % Change: 0.74%, Volume: 215,469
In the Zone…Orezone Gold released infill drill results from its Bombore gold project in Burkina Faso. The results include 27
core holes (4,303 m) and 205 reverse circulation holes (10,450 m), mainly from the Siga South area. Results were positive as
the grades were approximately 65% higher than the resource model. Core drilling also returned higher grades with widths being
about 25% less. The results continue to demonstrate the potential to improve both grade and resource size at Bombore. The
company is expected to release an updated resource estimate by Q4/11, with a Preliminary Economic Estimate (PEA) expected
shortly. Orezone CEO noted, "If the trend continues we can expect an increase in the size and grade of the oxide resources, with
the potential to lower strip ratios and improve economics." Bombore is the largest undeveloped gold project in Burkina Faso,
with a current gold resource 1.6 million ounces of Indicated resource and 1.9 million ounces of Inferred Resource. Canaccord
Genuity Mining Analyst Nicholas Campbell remains positive on the name and expects the upcoming PEA to de-risk the project
as it will provide clarity around capex, operating expenses and the production potential of Bombore.
Painted Pony Petroleum* (PPY.A : TSX-V : $11.37), Net Change: 0.78, % Change: 7.37%, Volume: 1,482,626
Off to the Races…Painted Pony Petroleum announced drilling success at three of its 50%-owned Montney wells on its
Blair/Town block in northeast B.C. At the Blair d-5-K/94-B-16 location the company completed its first three well production
pad, with each horizontal well bore targeting a different horizon. The upper horizon produced 6.4 mmcf/d at 760 psi after ten
days, the middle horizon produced 5.8 mmcf/d at 1,100 psi over ten days and the lower produced 7.7 mmcf/d at 1,100 psi over
five days. All three wells were completed during spring break-up and tied into existing infrastructure. In the operational update
the company announced Q1/11 production of 4,000 boe/d, up from 3,443 boe/d in Q4/10. The company also announced that
they would be shutting-in approximately 650 boe/d of gas production for 21 days due to scheduled maintenance.
Additionally they noted that the abnormally long spring break-up this year has shut-in approximately 15% of their oil
production in the Bakken. A Bay Street analyst commented that this announcement is incrementally positive for Progress
Energy Resources (PRQ) as they hold the dominant land position in the Blair/Town area and it also confirms the
upper/middle/lower productivity in the area.
Quebecor* (QBR.B : TSX : $34.10), Net Change: 1.05, % Change: 3.18%, Volume: 266,413
Patience required. Quebecor reported disappointing Q1/11 results yesterday. At $991 million, consolidated revenue was
slightly below Canaccord Genuity Telecommunications and Cable Analyst Dvai Ghose's $1,004 million forecast and consensus
of $1,012 million, but up 4.5% on a YoY basis. At $294 million, consolidated EBITDA was below Ghose's $305 million
forecast and consensus of $304 million due to lower-than-expected News Media margins and higher-than-expected wireless
start up losses. As a result of the lower-than-expected EBITDA, recurring EPS of $0.56 was also below Ghose's $0.61 estimate
and consensus of $0.58 and down from $0.67 in Q1/10 due to wireless dilution. At $215 million, consolidated capex was well
above Ghose's $172-million forecast and consensus of $196 million and was up 39.5% YoY due to the wireless build. Videotron
reported lower-than-expected cable subscriber growth, but wireless beat expectations. Videotron surprisingly reported a net loss
of 3,000 basic cable subscribers. This was first reported decline in basic cable subscribers since Q2/05. Ghose had expected
5,000 net additions and consensus assumed 3,600 net additions. In addition, at 11,500, Internet net additions were below
Ghose's 15,000 estimate and consensus of 16,700 and was down from 21,000 in Q1/10. The 15,500 cable telephony additions
were also below Ghose's 17,000 forecast, consensus of 19,100 and the 29,000 in Q1/10. Videotron is clearly being more
impacted by maturation and competitive pressures than previously assumed. However, Ghose is still surprised at the basic cable
subscriber losses in light of the fact that Bell Canada (BCE) only reported 7,663 video subscriber additions in Q1/11, although
it did add 12,000 video subscribers in Ontario and Quebec. Nonetheless, BCE added 21,000 video subscribers in Q1/10. On the
positive side, the 28,600 Videotron wireless net additions easily beat Ghose's 20,000 estimate and was above consensus of
26,100. Quebecor is expected to remain out of favour in the current dividend-seeking investment environment as wireless losses
could be quite significant in 2011. However, Ghose continues to recommend Quebecor shares for patient value investors due to:
1) the fact that FCF is expected to improve significantly from 2012 as wireless losses are expected to peak in 2010-11; and 2)
the stock is only trading at a prop. EV of 5.5x 2012E EBITDA including wireless losses and 4.8x excluding wireless
investments and losses. In the short term, Ghose says investors may find better near-term returns from TELUS (T) or even BCE
due to their strong FCF yields and dividend growth potential.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
7
RioCan REIT* (REI.UN : TSX : $25.52), Net Change: -0.03, % Change: -0.12%, Volume: 552,581
Homburg Canada REIT* (HCR.UN : TSX : $12.85), Net Change: -0.09, % Change: -0.70%, Volume: 46,064
Morguard REIT* (MRT.UN : TSX : $15.69), Net Change: 0.06, % Change: 0.38%, Volume: 54,381
In the cross hairs…Target (TGT) announced it will open 105 stores in Canada as part of an initial selection process. Stores
will be located in all 10 provinces with Ontario having the most locations at 45. In the coming days, Target expects to finalize
the acquisition of these initial sites by paying half of the $1.825-billion purchase price. As part of the transaction to acquire 220
leaseholds from Zellers, Target had the right to select up to 110 sites in conjunction with the first payment and will continue to
select additional leases in advance of the second payment due this fall. Three Canadian REIT’s will initially be landlords at the
new stores. RioCan REIT will host the most locations with 21, followed up by Morguard REIT with 12 stores and Homburg
REIT with three. REIT investors had been anticipating this announcement in the hopes that this large new anchor tenant would
add to the stability of their real estate portfolios. However, it should be noted that Target may initially expect expensive
renovations from the landlords, which would add to costs for the REITs at the outset. Target expects the first new locations to
open in 2013.
TAG Oil* (TAO : TSX-V : $6.31), Net Change: 0.46, % Change: 7.86%, Volume: 210,505
TAG, you're expected to go higher. On Wednesday, a Bay Street brokerage came out with an aggressive target price for shares
of TAG Oil, and, in turn, the stock jumped higher Thursday. A couple weeks ago, investors were bidding up shares of TAG
after the New Zealand-focused oil and gas company announced its fifth discovery. TAG reported that the Sidewinder-4
exploration well, located in TAG's 100%-controlled New Zealand Petroleum Exploration Permit 38748, has been confirmed as
a light oil and gas discovery. Along with the three previous Sidewinder discoveries, it is TAG's fifth exploration success in the
Taranaki Basin in the past six months. Management highlighted that the results from the Sidewinder-4 well indicate that the
targeted oil-and-gas-charged Mt. Messenger Formation sandstones extend significantly to the east of the Sidewinder-1
discovery well. The interpreted total hydrocarbon column at Sidewinder now exceeds 60 metres (196 feet) in thickness, with no
water column evident in any of the Sidewinder wells. Together, the four Sidewinder wells drilled to date indicate that the size
and scope of the Sidewinder discovery area is much larger than originally anticipated. Furthermore, management stated that the
entire permit remains lightly explored and prospective for further oil and gas discoveries, with numerous drill-ready prospects.
TAG is now preparing to commence the flow testing of the Sidewinder-2, Sidewinder-3 and Sidewinder-4 wells in a few weeks’
time. All wells are expected to be placed onto production through the Sidewinder Production Station, currently under
construction with anticipated completion by mid-year 2011.
U.S. EQUITIES OF INTEREST
Listed Alphabetically by Symbol
Big Lots (BIG : NYSE : US$31.44), Net Change: -0.89, % Change: -2.75%, Volume: 6,511,470
Headed North. Big Lots reported an in-line first quarter; however, shares slid after the discount retailer cut its full-year earnings
and sales outlook due to weakness seen near the end of the quarter. First quarter earnings were $0.70 per share on revenue of
$1.23 billion, generally in line with the $0.69 on $1.23 billion expected by analysts. Big Lots, which caters to low income and
price conscious shoppers, has recently been challenged by rising fuel and food costs which are keeping consumers at home. This
resulted in a slowing of sales, a trend the company expects to persist throughout the year. Same-store sales are expected to be
flat or -2% for the balance of the year, prompting management to cut its full-year earnings guidance to $2.75-2.90 per share,
down from the $3.05-3.15 forecast in March. For the current quarter, management estimates earnings will be $0.38-0.48, short
of the consensus estimate of $0.53. Shares of Big Lots received a boost earlier this year as rumours that several buyout firms
were interested in purchasing the company, but according to sources close to the company, management did not see an offer that
they felt gave fair value to the company. In fact, in news separate from the earnings call, Big Lots announced it will be
purchasing Canadian retailer Liquidation World (LQW) for $1.8 million in stock, making its first venture outside of the U.S.
The company estimates it will costs an additional $36 million to repay Liquidation World’s outstanding debt and cover other
costs associated with the transaction.
Computer Sciences (CSC : NYSE : US$38.38), Net Change: -5.71, % Change: -12.95%, Volume: 14,029,718
After pre-announcing Q4/11 earnings on May 2, the IT consulting company reported EPS of $1.09 and revenues of $4.2 billion,
missing both of Credit Suisse’ forecasts. North American Public Sector (NPS) revenues declined 6.5% in the most recent
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
8
period, with bookings down 36% due to Federal budget delays, contract protests, and an extended procurement process.
Although the NPS segment continues to face headwinds going into F12 along with $100 million in F11 revenues from
discontinued operations, management said it expects to achieve 0-3% revenue growth next year, with 5-8% revenue growth in
the commercial segment. Furthermore, although adjusted operating margins declined in Q4, CSC expects margins to improve
from 7.6% in F11 to 8.75-9.25% in F12. For the full year, CSC forecast $4.70-4.80 per share in earnings and $16.5-17.0 billion
in revenues, which were actually better than Credit Suisse’s forecasts. Despite this upside, the firm remains cautious about
CSC’s growth potential, given all of F12’s pending uncertainties including the National Health Services MOU, an audit
committee investigation into the Nordic issue, a dilutive iSoft acquisition that is not yet factored into guidance, a change in
accounting standards from GAAP to IFRS, headwinds for the Federal business and low-H1/12 guidance due to restructuring.
Management is hoping to execute on their business model, but Credit Suisse’ confidence in its ability is still low. Accordingly,
the firm is lowering its F12 EPS forecast by $0.28 to $4.70 and F13 by $0.47 to $5.12. It remains neutral on the story.
Guess? (GES : NYSE : US$44.57), Net Change: 4.47, % Change: 11.15%, Volume: 8,152,563
Guess what? Shares of fashion retailer Guess? received a boost after the company posted a quarterly profit that exceeded
market expectations on strong growth in Europe and Asia. Despite rising commodity costs, the California-based company
reported first-quarter profit of $42.7 million, or $0.46 per share, surpassing the average estimate of $0.44 per share. Sales across
its stores increased with Asia and Europe reporting robust results, increasing 24% and 12% in revenue, respectively. Positive
feedback from the two regions, which together contribute about 45% to total revenue, led the company to announce plans to
open 81-86 stores in Europe, which is stabilizing after the financial crisis, while an additional 56 stores are expected to be
launched in Asian markets like Korea and China later this year. Looking ahead to the second quarter, the company, which
typically issues a conservative profit outlook, expects earnings of $0.77-$0.83 a share on revenue of $645-$660 million, a range
that is mostly in line with analysts’ estimate of $0.79 on revenue of $650.48 million. Guess?, best known for its jeans, plans to
selectively raise prices across categories like basic denims and dresses to offset pressure from rising raw materials cost.
Microsoft (MSFT : NASDAQ : US$24.67), Net Change: 0.48, % Change: 1.98%, Volume: 77,725,457
He’s no Albert Einhorn. Greenlight Capital President David Einhorn is pressing Microsoft’s board to replace CEO Steve
Ballmer, suggesting the software maker suffers from “Charlie Brown” management. “It’s time for Microsoft’s board to tell
Steve Ballmer, ‘All right, we see what you can do, let’s give so-and-so a chance,’” commented Einhorn at an investor
conference Wednesday. “His continued presence is the biggest overhang on Microsoft’s stock.” Ballmer, 55, has come under
increased scrutiny from shareholders as the company loses market share to Apple (AAPL) and Google (GOOG) in mobile
phones, and as Apple’s iPad takes sales from personal computers running Microsoft’s Windows. Last year, the board docked
Ballmer some of his potential bonus for falling short in the mobile industry and new forms of computers. Despite knocking
Ballmer, Einhorn recommended Microsoft shares because the stock trades at a “remarkable discount” to the S&P 500
Index. Even though Microsoft outperforms the average S&P company, its shares have underperformed the index in four of the
five last quarters. Microsoft is Greenlight’s eighth-biggest holding among U.S. stocks. According to regulatory filings, the New
York-based hedge fund added 1.39 million Microsoft shares last quarter, for a total of 9.07 million. That stake is worth $230.2
million at current prices.
NetApp (NTAP : NASDAQ : US$55.31), Net Change: 3.58, % Change: 6.92%, Volume: 18,952,991
NTAPping into new markets. NetApp’s fiscal fourth-quarter earnings rose 11% and the storage company issued a strong
outlook for the current quarter as it experiences robust demand and market share gains. Revenue of $1.43 billion (up 22% year
over year) compared to Canaccord Genuity Technology Analyst Paul Mansky’s $1.41-billion estimate, consensus of $1.39
billion, and guidance of $1.35-1.41 billion, driven primarily by product strength in North America, notably the U.S. Public
sector. Coupled with a 38-bp gross margin improvement and near-record EBIT margin of 19.1%, EPS of $0.59 topped
Mansky’s estimate by $0.05 and consensus by $0.06. Normalizing for the impact of a recent revenue recognition change and
lower share count, EPS was actually $0.55 (just $0.02 better than consensus). Chief Executive Tom Georgens on Wednesday
said NetApp is no longer facing demand shortfalls and noted the company achieved the largest market share gains in its history
in the just-ended fiscal year. “The issues we were facing at the end of the last quarter are substantially resolved,” he said “And
demand has been remarkably constant despite very volatile headlines relative to southern Europe” and other macro concerns
like the disaster in Japan. Helping smooth out demand further, NetApp completed the purchase of microchip maker LSI’s (LSI)
Engenio external storage system business for $480 million this month, in a bid to expand into the rapidly growing bandwidthintensive video and high-performance computing markets. The July quarter will include Engenio, with guidance calling for sales
of $1.46-1.55 billion (up 32% year over year at mid-point) versus Mansky’s prior $1.49-billion estimate and consensus of $1.35
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
9
billion. Notably, EBIT margin of 18.0-18.5% is much better than post-Engenio expectations, translating to EPS of $0.52-0.57
versus his prior $0.49 forecast and stand-alone consensus of $0.50. Mansky is reiterating his bullish rating following strong
April results and, more importantly, a robust outlook for July – consistent with his upgrade thesis from two weeks ago. With
core estimates getting their second positive revision in as many weeks, the company is on track to log more than 30% annual
revenue growth with expanding operating margins throughout; historically, a recipe for multiple expansion.
RadioShack (RSH : NYSE : US$15.37), Net Change: -0.25, % Change: -1.60%, Volume: 4,308,557
It is what it is. Shares of Radio Shack fell after Goldman Sachs downgraded the stock, with the brokerage saying that a
maturing smartphone market with increasing competition could weigh on the electronics retailer. In a note to clients, Goldman
wrote, “Smartphone penetration reached 35% in 2010, and is headed to 47% in 2011, well above levels typically associated with
consumer electronics product cycle maturity.” The company has been shifting its focus to wireless products of late, after
demand for its electronic accessories began to dwindle. Radio Shack has faced competition in the handheld market from larger
rivals such as Best Buy (BBY) as well as carriers which provide the phones directly to consumers. Additionally, online retailers,
such as Amazon (AMZN), have also jumped into the mix, offering phones for purchase on the internet. The Goldman report
also believes consensus estimate for current-quarter results are too high, as they imply earnings improvement despite the costs
associated with the launch of Radio Shack kiosks at Target (TGT), while unwinding kiosks elsewhere. Additionally, the
brokerage notes that Radio Shack will be facing tougher comps as it laps the launch of Apple’s (AAPL) iPhone, with the next
version of the iPhone not expected until later this year. Shares of Radio Shack have slid about 21% since Goldman initially took
a bullish stance on the stock in January 2010.
Sigma Designs (SIGM : NASDAQ : US$8.74), Net Change: -2.26, % Change: -20.55%, Volume: 2,756,694
Nothing standard about this deviation. Sigma Designs slid to a first-quarter loss as revenue declined and operating expenses
crept higher. The net loss for the three months through April 30 amounted to $5.7 million, or $0.18 per share, reversing net
income of $1.1 million, or $0.04 per share, a year earlier. Research and development expenses rose 15% to $21.6 million, while
total operating expenses were up 15% to $35.5 million. The company said it faced increased payments for design tools and
software during the quarter. Excluding some items, adjusted earnings came in at $2.3 million, or $0.07 per share, which was still
below analysts’ expectation of $0.17 per share. Revenue fell 7% to $60.6 million from $65.2 million, with analysts looking for
$63 million. Management described the results as “disappointing”, though they were within guidance. CEO Thinh Tran assured
investors he is confident in the company’s mid- and long-term opportunities. Sigma Designs offers semiconductors with a suite
of real-time software that enables synchronous processing of video, audio, and graphics streams. The products are often used in
entertainment and control products for homes. According to Tran, “Our new generations of media processors, the SMP8650
series and SMP8670 series are being well received by the marketplace and we are encouraged by the design-ins with both
service providers and OEMs.”
Semtech (SMTC : NASDAQ : US$28.26), Net Change: 0.97, % Change: 3.55%, Volume: 1,231,604
Up. Shares of Semtech jumped after the analog and mixed-signal chipmaker posted a forecast-beating quarterly profit helped by
strong gross margins, prompting the company to project second-quarter results ahead of market estimates. For the quarter ended
May 1, Semtech posted a profit of $22.6 million or $0.34 per share, doubled from prior-year’s earnings of $10.8 million, or
$0.17 per share. The company has continued to see strength in revenue growth as of late. Excluding special items, it earned
$0.45 a share, beating the $0.43 consensus estimate. Quarterly sales jumped to $122.4 million while gross margins increased to
60.4% compared with 56% last year. The company, whose chips are used for power management and other functions in devices
such as cellular phones, notebooks and desktops, forecast second-quarter adjusted earnings of $0.47-0.49 a share on sales of
$127-131 million, ahead of analysts’ estimate of $0.46 a share on revenue of $125 million.
Tiffany & Co. (TIF : NYSE : US$76.04), Net Change: 6.00, % Change: 8.57%, Volume: 7,902,447
Sterling strength. Tiffany & Co.'s fiscal first-quarter earnings increased 26%, as the luxury jewellery retailer continued to post
double-digit sales growth, sending its shares to an all-time high. Despite having to hike prices to offset rising diamond and
precious metals costs, the company noted there has been no “meaningful resistance” from customers. Total same-store sales
increased 20%, or 15% on a constant-exchange-rate basis, as every geographic segment saw double-digit sales growth,
including a 19% increase in the Americas, a 37% climb in the Asia-Pacific region and a 25% rise in Europe. Tiffany had earlier
warned that store closings caused by the Japan earthquake and tsunami would affect earnings by $0.05 a share. However, those
stores have since re-opened and Japan sales increased 7% to $123.4 million. For the quarter ended April 30, Tiffany reported a
profit of $81.1 million, or $0.63 a share, up from $64.4 million or $0.50, a year earlier, and beating Wall Street’s forecast of
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
10
$0.57. Tiffany raised its full-year outlook on the basis of Q1 strength, saying worldwide sales growth in the early part of the
current quarter is exceeding expectations, with solid performance in most regions. Full-year profit outlook is up $0.10, as the
company now expects to earn between $3.45-3.55 per share, compared with the average forecast of $3.33. Tiffany is benefiting
from more discretionary spending by upper-end consumers, who are buying premium diamond and gold jewellery while the
company is also appealing to more middle-range consumers, with finely crafted, but less expensive silver products. Still,
because of the uncertain U.S. economic environment, lower-end silver jewellery spending may remain a challenge for awhile.
Yahoo! (YHOO : NASDAQ : US$15.98), Net Change: -0.17, % Change: -1.05%, Volume: 23,970,969
Now that’s a party. At Wednesday's Investor Day, Yahoo! guided that 2011 financials are trending below 2010 forecasts and
even longer-term margins will miss their targeted range, but the Internet portal believes most other financial metrics are on
track. Canaccord Genuity Technology Analyst Heath Terry notes that after taking questions on issues in China, the day focused
on efforts to drive engagement, improve advertiser experience, the search alliance’s issues, and new products. Management
opened by discussing the situation in China, but, citing ongoing negotiations with Alibaba, provided little new information.
Yahoo! is focused on preserving the value of Alipay both through Taobao and the potential growth of off-Taobao transactions.
Across the pond, Yahoo! ruled out a sale of its Yahoo! Japan stake and is evaluating a spin-off, a tracking stock, or a value
sharing structure. As for recent initiatives, the company said its new content and personalization platform is driving increased
engagement and click-throughs across a variety of internal metrics. Moreover, Yahoo! is starting to see some search
improvement and believes its Microsoft (MSFT) RPS guarantee through Q1/12 will provide protection until the marketplace
starts to work. Yahoo! updated guidance based on last year’s F10-13 financial plan, reiterating F11 growth. The plan is mostly
on track though margins are expected to be below the 27-33% target. Overall, Terry thinks Yahoo! is clearly making structural
and technological progress, though traffic figures suggest it has had little impact on the company’s growth. While there is value
at Yahoo!, he continues to believe that it will be offset by the operational difficulties and the uncertainty of direct value from the
assets on the balance sheet.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.
– Canadian and U.S. Comments for Friday May 27, 2011
11
COFFEE BEANS
– The [Vancouver] police department estimated it could spend as much as $650,000 policing the playoffs, with $500,000 of
that reserved for a possible run in the final round for the Stanley Cup. (Sportsnet)
– Internet advertising revenues in the U.S. hit $7.3 billion for the first quarter of 2011, representing a 23% increase over the
same period in 2010, according to figures released by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers
(PwC). This marks the highest first-quarter revenue level ever for the industry and a significant increase over last year’s firstquarter revenue level, which had been the highest on record to date.
– A U.K woman was refused service at a McDonald’s (MCD) drive-through amid safety concerns over her vehicle – a horse
and carriage. Debbie Murden, 42, from Pinxton, was turned away from a branch of the fast-food giant in Alfreton, Derbyshire,
after staff said it was unsafe to serve her. But Miss Murden said she often took her Welsh Cob and carriage to other restaurants,
and later the same day was served by a different fast-food chain. (BBC)
– Making tea and coffee for office colleagues could help workers get on in their careers, a study suggests. A survey of 1,600
office workers found most believed there was a direct correlation between making drinks and being promoted. The study by
office supplies firm Viking also found more than half of workers were reluctant to offer to make a round of tea or coffee
because colleagues had become more demanding with their orders. (Reuters)
– An official with an Indonesian telecom company says renting out space on mosque minarets for base transceiver station
equipment is a “win-win prospect.” Eko Wahyu Nurhidayat, the local field operations manager for XL Axiata in Malang, said
erecting BTS towers usually takes about nine months and involves obtaining several permits, but renting tower space at
mosques allows the company to save on material costs as well as help the mosques financially. The practice has become
common in Malang since Hutchison CP Telekom, which runs cellphone operator Three, became the first to rent out a Sabilillah
Mosque minaret for BTS equipment in 2006. (The Jakarta Globe)
– The U.S. National Pinball Museum in Washington is being forced to close after just five months. The museum features 200
pinball machines, some of which visitors can play, as well as displays detailing the art and history of the game. Owner David
Silverman said he was being asked to leave to make way for mall renovations. (Reuters)
– A Chinese farmer has given his chickens specially made glasses to stop them from fighting. Zhang Xiaolong says his
aggressive roosters have become much more peaceful since he gave them the plastic glasses. The glasses are actually blinkers,
which prevent the birds seeing straight ahead, making direct confrontation more difficult. Instead, they have to look around the
sides, which makes them more cautious. (BBC)
– On Wednesday night, American Idol smashed viewing figure records. The show received more than 122.4 million votes. This
is the highest number of votes recorded in the history of American Idol and marks a new world record for a reality TV vote.
The record came in support of the two Idol finalists, Lauren Alaina and Scotty McCreery, who both put on show stopping
performances but it was Scotty McCreery who was later crowned American Idol winner. Casting those votes on Wednesday’s
show were over 29 million viewers, making it the biggest entertainment show on American TV this year.
THE LAST DROP: The pastor who incorrectly predicted the Rapture for Saturday said he had a very tough weekend. To
make it worse, his friends keep calling him, saying, “Hey, it’s not the end of the world!”
– Conan O’Brien
* Canaccord Genuity and its affiliated companies may have a Corporate Finance or other relationship with the company and
may trade in any of the Designated Investments mentioned herein either for their own account or the accounts of their
customers, in good faith and in the normal course of market making. The authors have not received, and will not receive,
compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage
contained in the Morning Coffee.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.