Home Capital suspends dividend as deposits continue to fall
The ongoing woes of mortgage lender Home Capital (HCG.TO) continue to send ripples across the Canadian stock market - and BNN is the channel that will keep you up-to-date all day.
In what looks like a solid vote of confidence, Home Capital has recruited three prominent directors: Former Ontario Teachers' Pension Plan CEO Claude Lamoureux; Paul Haggis former CEO of OMERS, a giant pension plan for more than 470,000 local government workers; and former merchant Sharon Sallows, a veteran in corporate turnarounds.
The Canadian dollar has poked its nose above 73 cents U.S. this morning but it’s still down from late January - when it traded above 76 cents in - amid concerns about the overheated housing market. The decline has encouraged foreign money managers to bet against Canada.
And a rising chorus of trade rhetoric hasn’t helped, with U.S. Commerce Secretary Wilbur Ross complaining that threats of retaliatory actions by Canada "are inappropriate." The Prime Minister says Ottawa will looking into preventing U.S. thermal coal exports from using B.C. ports in response to U.S. duties on softwood lumber.
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CIBC economist Benjamin Tal warns that “short Canada” sentiment is on the rise. “We’ve spent hours over the past few weeks talking to bloodthirsty global investors that are largely influenced by Trump’s tweets on NAFTA and the Home Capital saga,” he says in a note headlined "Who Stands for Canada?"
Tal is calling on the Bank of Canada, which releases an interest rate statement on May 24, to reassure the markets that the Canadian economy is robust. “Soon enough, we’ll get confirmation that GDP growth in the first quarter of the year has powered ahead to an annual rate of around 4 per cent.”
And he insists that Home Capital’s troubles are “not the ultimate test of Canadian housing. The situation is contained, and the quality of the assets is solid. Any reference to that reality from the Bank will carry a lot of weight.”
We’re talking cannabis at 11:40 a.m. ET with Chuck Rifici, CEO of Cannabis Wheaton Income (CBW.V), which bills itself as “the world's first marijuana streaming company.” The company plans to invest in harvests across Canada from partners “comprised of licensed producers of cannabis and late-stage LP applicants.”
Rifici, a well-connected federal Liberal, is a co-founder of Tweed Marijuana, which is now industry giant Canopy Growth (WEED.TO) We’ll ask him how he seized on the Wheaton name and whether he ran the ideas past the folks at giant streamer Silver Wheaton (SLW.TO).
Meanwhile, his erstwhile colleagues at Canopy plan their own streaming operation.
Every morning Commodities host Andrew Bell writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.