Telecommunications experts called for scuttling the planned Rogers Communications takeover of rival Shaw, slamming the response of Ottawa and the federal telecom regulator to the serious Rogers outage earlier this month.
The House of Commons industry committee heard testimony Monday on the outage from various experts, as well as Industry Minister Francois-Philippe Champagne, Rogers executives and Canadian Radio-television and Telecommunications Commission officials.
The experts provided a number of policy recommendations, including ways to ensure competition in the industry, and called for the Rogers-Shaw transaction to be blocked.
Rogers is pursuing a $26-billion merger with Shaw, but the deal still requires approval of the Competition Bureau and Champagne’s office.
The July 8 outage crippled the Rogers network and affected millions of customers across Canada, including people trying to contact emergency services.
All four experts who testified Monday criticized the CRTC’s response to the outage, including its decision to not pursue a full public investigation.
Carleton University communications professor Dwayne Winseck said the CRTC is responsible for the effect of the outage on access to emergency services, adding that “perhaps it should be required to rethink its relatively permissive approach to regulating critical services.”
CRTC head Ian Scott was asked during his appearance whether the telecom regulator needs any additional powers.
Scott said he couldn’t think of any provisions that might have prevented the outage. “With respect to network outages and network reliability, I think this is a situation that can be addressed by the industry.”
Geist criticized Scott’s response.
“It was, I thought, remarkable and exceptionally discouraging to watch the chair of the CRTC come give a virtual shrug when posed with questions about the role that new regulations could play,” Geist said.
John Lawford, executive director of the Public Interest Advocacy Centre, said part of the problem with the CRTC is that it does not impose quality of service requirements.
Rogers submitted a letter to the CRTC on Friday, explaining how the outage happened and the degree to which its network was incapacitated.
Scott said the commission is in the process of reviewing the submission and determining next steps.
“Rogers said they will do better. The CRTC will make sure they do,” Scott said in his testimony.
Scott said it’s still to be determined whether penalties will be imposed, but cautioned that as per current legislation, penalties are meant to encourage compliance rather than be punitive.
Conservative MP Tracy Gray questioned the CRTC officials on their preparation for an outage’s affect on 911 calls, given the Rogers lapse limited Canadians’ ability to access emergency services.
“It’s very difficult to prepare for something that’s truly unprecedented,” Scott said.
Rogers Communications CEO Tony Staffieri also faced questions Monday from MPs about whether a lack of competition in the telecom sector might have contributed to the massive outage, which came as the company awaits government approvals for its purchase of Shaw.
Liberal MP Nathaniel Erskine-Smith asked Staffieri whether the concentration of customers in a single company is a challenge to network resiliency.
“We work every day in a very competitive environment and we work hard to bring the best value in money for customers,” Staffieri said.
“You’re saying that with a straight face?” responded Erskine-Smith.
In his opening remarks, Staffieri said the outage reflects a failure on the part of Rogers. “On that day, we failed to deliver on our promise to be Canada’s most reliable network.”
The CEO further outlined some of the technical causes of the outage and what the company is doing to prevent additional failures, including a plan to separate the wireless and internet networks.
MPs also directed questions to Champagne on government action in response to the outage.
New Democrat MP Brian Masse pressed Champagne about passing legislation to make the internet a public utility, saying that COVID-19 had shown the internet to be an essential service.
Without more government power to regulate the internet, Masse told the committee hearing, “we have to rely on any minister being buddy-buddy with a bunch of CEOs.”
Champagne defended his meeting with the telecom CEOs, and while he did not say whether he would support legislation to make the internet a public utility, he said he was open to working across party lines and taking in the committee’s recommendations.
Masse asked Staffieri if he would support a bill of rights for consumers, but the Rogers executive did not answer directly.
“We are very much focused on what we need to do to ensure the resiliency and redundancy of our networks,” Staffieri said.
Champagne said on the day of the outage he contacted Staffieri to inquire about the situation but the conversation was not between a CEO and a cabinet minister. Rather, Champagne was speaking on behalf of Canadians.
This report by The Canadian Press was first published July 25, 2022.
More price pressure on gold, silver as USDX, bond yields spike up – Kitco NEWS
(Kitco News) – Gold and silver prices are lower in midday U.S. trading Monday. Gold prices hit a nearly 2.5-year low and silver a more-than-two-week low today. Rising government bond yields and a very strong U.S. dollar index are the main bearish factors pushing the precious metals markets down. October gold was last down $12.70 at $1,632.80 and December silver was down $0.17 at $18.73.
The global marketplace experienced rough waters Monday, in a continuation of keener risk-off trading attitudes seen late last week. U.S. and/or global economic recession worries are rising rapidly. Global stock markets were mostly lower overnight. U.S. stock indexes are mixed at midday but not far above last week’s three-month lows. The Wall Street Journal today reported this year has been the worst year since 1930 for a “buy-the-dips” strategy in U.S. stock trading and investing. FOREX volatility and rising government bond yields are in the spotlight Monday.
The U.K.’s big plan to sell more government bonds in an effort to finance better economic growth has helped to prompt a rout in global government bond markets. “The bond vigilantes are back and the British pound is the target,” read a Barron’s headline today.
Broker SP Angel in an email dispatch this morning said gold saw a “minor flash crash” overnight. “The metal continues to get hammered” by the U.S. dollar. Foreign exchange volatility is rising, with the British pound passing its record low in 1984 and presently trading around $1.04 to the dollar. The Chinese yuan is nearing 2008 lows. “Traders are ramping up short positions on gold, with fund managers more bearish on the metal than any other time over the past four years, according to a Bloomberg report. Rising U.S. Treasury yields have been a major headwind to the gold and silver markets. “Gold ETF outflows continue, with holdings near their 2-year lows,” said the broker.
The key outside markets today see Nymex crude oil prices weaker, hitting a seven-month low and trading around $78.00 a barrel. The U.S. dollar index is higher and pushed to another 20-year high today. Meantime, the yield on the 10-year U.S. Treasury note is rising and presently fetching 3.771%. The 2-year Treasury note yield is 4.74%.
Technically, October gold futures prices hit a nearly 2.5-year low today. The gold futures bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,700.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,600.00. First resistance is seen at the overnight high of $1,646.40 and then at $1,652.00. First support is seen at today’s low of $1,624.40 and then at $1,615.00. Wyckoff’s Market Rating: 1.0
December silver futures prices hit a two-week low today. The silver bears have the firm overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $20.00. The next downside price objective for the bears is closing prices below solid support at $18.00. First resistance is seen at today’s high of $19.045 and then at $19.40. Next support is seen at today’s low of $18.435 and then at $18.00. Wyckoff’s Market Rating: 2.0.
December N.Y. copper closed down 375 points at 330.50 cents today. Prices closed near mid-range today and hit a nine-week low. The copper bears have the firm overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Copper bulls’ next upside price objective is pushing and closing prices above solid technical resistance at the September high of 369.25 cents. The next downside price objective for the bears is closing prices below solid technical support at the July low of 315.55 cents. First resistance is seen at 340.00 cents and then at 347.25 cents. First support is seen at 325.00 cents and then at 315.55 cents. Wyckoff’s Market Rating: 2.0.
Scotia CEO appointment 'surprising' but no major strategy shift expected: Analysts – Yahoo Canada Finance
Bank of Nova Scotia’s decision to name a new chief executive officer from outside its senior ranks is unusual, according to analysts, but many do not expect that to lead to a major shift in the Canadian bank’s business strategy.
On Monday, Bank of Nova Scotia (BNS) (BNS.TO) announced Brian Porter will retire as president and chief executive as of January 31, 2023 after nearly ten years at the helm. He will be succeeded by Finning International’s Scott Thomson, who already sits on the lender’s board of directors.
“The appointment of a Canadian bank CEO from outside of the organization/industry is surprising,” said John Aiken, head of research in Canada and senior analyst at Barclays, in a note to clients Monday. Aiken has an equal weight rating on the company and a 12-month price target of $86.00 per share.
“That said, with Mr. Thomson’s involvement in the board (and several committees), we do not expect the transition to be jarring and the move leads us to believe that there should not be an immediate shift in Scotia’s strategy as Mr. Thomson has been involved in developing it at the board level.”
Thomson has held a board seat at the bank since 2016 and will leave his role at Finning, which is the world’s largest dealer in Caterpillar equipment, in mid-November.
“I am confident that Scott Thomson will guide the bank through the next phase of its growth and development. He is a results-driven and proven leader who executes with purpose and shares values that are aligned with those of the bank,” Brian Porter said in a release Monday.
The timing of the transition is less than ideal, according to Nigel D’Souza, a financial services analyst at Veritas Investment Research.
“The timing of the announcement seems sub-optimal given current macroeconomic uncertainty and market volatility,” D’Souza said in an email to Yahoo Finance Canada. He also called the decision to promote an external candidate “atypical.”
The CEO transition comes amid a downturn in financial markets and during a time of heightened concerns about a looming recession brought on by high inflation and soaring interest rates.
Bank of Nova Scotia shares traded at a 52-week low on Monday. The stock price has also significantly underperformed its big bank peers over five years. As of early Monday, Bank of Nova Scotia shares were down about 15 per cent over that time span, while its four rivals were up by an average of 22 per cent.
Part of the issue has been concerns over the company’s relatively large international banking exposure. In recent years, Bank of Nova Scotia has sold assets to narrow its focus on specific Latin American regions.
However, Thomson’s expertise in Latin America could stand to benefit the bank.
“During his tenure as CEO of Finning, Mr. Thomson has led the company through challenging market conditions, and managed to significantly improve the company’s earnings capacity, driving increased return on invested capital, particularly in Latin America,” Aiken said.
Despite the issues in Latin America, the bank is likely to largely stay the course on its strategy, analysts said.
“Based on our initial discussion with management, investors should not expect any material changes to BNS current strategy, with the LatAm region remaining a heavy focus for future growth,” said Mike Rizvanovic, an analyst at Keefe, Bruyette & Woods, in a client note on Monday.
“While the broad strategy is likely to stay intact, we believe the new CEO will look to improve the bank’s execution, particularly with BNS’ share price having materially underperformed its Big Six peer group over the past five-year period.”
Rizvanovic has a market perform rating on the stock and a 12-month price target of $86.00 per share.
Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.
U.S. stocks, commodities drop; U.S. Treasury yields surge – BNN Bloomberg
US stocks fell in a volatile session exacerbated by sharp moves in the UK currency and bond markets, as hawkish central banks across the globe continued to subdue sentiment.
The S&P 500 ended Monday’s session at its lowest level since December 2020. The Cboe Volatility Index spiked past 30, a level it hasn’t closed above since June. US Treasury yields rose, with the 10-year rate climbing as much as 21 basis points to 3.898 per cent, its highest level since April 2010.
The Bloomberg Commodity Spot Index, a key gauge for raw materials prices, tumbled to the lowest in eight months as fears of a global recession intensified. The pound dropped after the Bank of England said it may not act before November to stem a rout that took the sterling to a record low. The dollar soared to yet another record high.
Markets were on the edge after a selloff of risk assets deepened last week as the UK’s plan to lift its economy fueled fears that heightened inflation would push rates higher and ignite a global recession. UK markets were in focus on Monday as the pound remained volatile after crashing to an all-time low, with the Bank of England’s comments doing little to reassure traders that were waiting for a broader policy response to the fallout from the goverment’s massive tax cuts.
Federal Reserve officials added to the hawkish rhetoric. On Monday, Boston Fed President Susan Collins said additional tightening is needed to rein in stubbornly high inflation and cautioned the process will require some job losses. Atlanta Fed President Raphael Bostic also said the central bank still has a ways to go to control inflation.
“On the macro front, it feels like a remake of West Side Story, with a gang of central bankers going after the job market, which refuses to let go,” said Mike Bailey, director of research at FBB Capital Partners. “Powell and now Andrew Bailey at the BOE are trying to slow the economy down, but my sense is employers are keeping as many workers as they can to avoid being left out in the cold when we recover from the next recession. So we almost have an arms race with central bankers raising rates and employers holding on to workers.”
US markets will continue to remain challenged by uncertainty until companies start to report their third-quarter earnings next month, which will provide greater detail on the health of corporate revenues and profit, wrote John Stoltzfus, chief investment strategist at Oppenheimer. Any company or industry that needs lower rates could be in trouble, FBB’s Bailey says.
Investors will also be keeping an eye on the economic data stream for hints of prices cooling, Art Hogan, chief market strategist at B. Riley, wrote in a note.
“What the market will need to see now to get out of the current conundrum is for inflation inputs to start coming down noticeably,” said Hogan. “We will get a read on the Fed’s preferred inflation indicator this Thursday when the second quarter core PCE is reported. Along with that investors will keep a close eye on the economic data stream for hints of prices paid coming down.”
Trading this week will be punctuated by a number of economic reports including US initial jobless claims and gross-domestic-product data, along with PMI figures from China. Choppiness in price moves is likely with a steady stream of Federal Reserve officials speaking through the week.
The plunge in UK gilts sent 10-year yields above 4 per cent for the first time since 2010. Traders ramped up wagers on the scale of interest-rate hikes in the short term, with money markets pricing in more than 200 basis points of increases by the central bank’s next meeting in November.
Meanwhile, Christine Lagarde said the European Central Bank will consider shrinking its balance sheet only once it has completed the “normalization” of interest rates. Raising borrowing costs is the most appropriate and effective tool for now to combat record-high euro-area inflation, the ECB President said on Monday.
Geopolitical risks from the war in Ukraine to escalating tensions over Taiwan and unrest in Iran also continue to weigh on market sentiment. The OECD cut almost all growth forecasts for the Group of 20 next year while anticipating further interest-rate hikes. And a gauge of German business confidence deteriorated.
Key events this week:
- Fed official Loretta Mester speak at events, Monday
- China industrial profits, Tuesday
- US new home sales, Conference Board consumer confidence, durable goods, Tuesday
- Fed Chair Jerome Powell and Charles Evans speak at events, Tuesday
- Fed’s Mary Daly, Rafael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
- Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
- US initial jobless claims, GDP, Thursday
- Fed’s Loretta Mester, Mary Daly speak at events, Thursday
- China PMI, Friday
- Euro zone CPI, unemployment, Friday
- US consumer income , University of Michigan consumer sentiment, Friday
- Fed’s Lael Brainard and John Williams speak, Friday
Some of the main moves in markets:
- The S&P 500 fell 1 per cent as of 4:03 p.m. New York time
- The Nasdaq 100 fell 0.5 per cent
- The Dow Jones Industrial Average fell 1.1 per cent
- The MSCI World index fell 2 per cent
- The Bloomberg Dollar Spot Index rose 1 per cent
- The euro fell 0.7 per cent to US$0.9617
- The British pound fell 1.5 per cent to US$1.0697
- The Japanese yen fell 0.9 per cent to 144.56 per dollar
- Bitcoin rose 1.4 per cent to US$19,173.2
- Ether rose 2.9 per cent to US$1,329.58
- The yield on 10-year Treasuries advanced 21 basis points to 3.89 per cent
- Germany’s 10-year yield advanced nine basis points to 2.11 per cent
- Britain’s 10-year yield advanced 42 basis points to 4.24 per cent
- West Texas Intermediate crude fell 2.3 per cent to US$76.92 a barrel
- Gold futures fell 1.3 per cent to US$1,633.60 an ounce
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