Their Montreal animation company may have made a TV hero out of the likes of Paddington Bear, but last week Cinar Corp. founders Ronald Weinberg and Micheline Charest were finally shown the door. The husband and wife team were fired from their executive jobs at Cinar following months of scandal: the company is being investigated for tax fraud and allegations that $183 million was improperly invested. The angry couple, however, refused to resign their board seats.
The TSE 300
takes off again
The Toronto Stock Exchange’s
300 composite index resumed the strong upward surge it began late last year, hitting an all-time high of 11,000 on Aug. 15. The bellwether index had been trailing U.S. exchanges over the last few years. But now experts are suggesting that the index, driven by the shares of telecommunications giant
Nortel Networks Corp., is making up for lost time.
While investors are staying away from American technology stocks because of concern they are overvalued, the reverse is true north of the border: foreign money is flowing into Canadian companies that many investors believe have been undervalued. Nortel— which accounts for a whopping 34 per cent of the index—was the biggest beneficiary: its shares gained $8.15 on the week, closing at $121.4.
The Bank of Canada is worried. The economy is not slowing down enough to satisfy the central banks economists that inflation is under control. With gross domestic product growing by an annual rate of 4.9 per cent in the first quarter of this year, the bank bumped up its projection for the entire year to between 4.25 and 4.75 per cent. In its latest quarterly report, it expects economic activity, while slowing, to still outstrip the country’s production capacity. In turn, core inflation—which excludes the volatile food and energy
sectors—is expected to move up to 2 per cent by early 2001. That would put it at the midpoint of the bank’s target inflation range. Analysts are now laying bets the bank will raise interest rates at the first sign of overheating.
TD scores big
Profits at the Toronto-Dominion Bank, the country’s second-largest by assets, soared far past analysts’ expectations: the bank announced that its earnings increased by 27 per cent for the quarter ended July 31, to $511 million, compared with $402 million for the same period a year earlier. The bank gave most of the credit to the smooth integration of Canada Trust, which it acquired in February.
Quebecor cuts Internet staff
Montreal communications conglomerate Quebecor Inc. said it will cut about one third of its staff at Canoe Inc., its Internet portal. The loss of 65 positions comes a month after former Canoe CEO John Paton quit the Toronto-based unit and two weeks after Quebecor announced that Canoe lost $8.1 million in the second quarter. The company said, however, that it “is more than ever committed to the Internet business.” Quebecor, meanwhile, has made a $4.9-billion all-cash offer to purchase Quebec cable company Groupe Vidéotron Ltée.
De Beers sparkles
South African diamond giant De Beers Consolidated Mines Ltd. appears to be on the brink of acquiring Canada’s first underground diamond mine. The company made a hostile bid for Winspear Diamonds Inc., owners of a diamond deposit at Snap Lake in the Northwest Territories, in June. Winspear initially rejected it as inadequate but last week recommended that shareholders accept a revised offer of $5 a share, up 75 cents. The total bid is worth about $305 million.
Bidding for Seagram
Diageo PLC of London, makers of Guinness stout and Johnnie Walker scotch, confirmed that it is collaborating with French firm Pernod Ricard SA, which owns Wild Turkey bourbon and Havana Club rum, to acquire the liquor assets of Seagram Co. Ltd. The announcement ends speculation that Diageo was planning a joint bid with Bacardi & Co. Ltd. of Bermuda. Seagram’s liquor assets are valued at about $13.5 billion.
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