These are stories Report on Business is following today. get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
RIM plans tablet, report saysResearch In Motion ltd. RIM-T plans to unveil a tablet computer in November, Bloomberg News reports, following on the heels of the success of the iPad from Apple Inc. AAPL-Q. Quoting sources, the news agency said today the computer would have about the same dimensions as the iPad and would include Wi-Fi and Bluetooth wireless ability. the Waterloo, Ont.-based company plans to call the device the Blackpad, it said, and has already acquired rights to blackpad.com.
Apple has sold 3 million iPads since its U.S. launch, and, one analyst told Bloomberg, RIM “can’t wait for a second generation of devices from Apple or they’ll fall too far behind.”
RIM is widely expected to also unveil a new BlackBerry next week at a new York event. the 9800 smart phone is expected to be touch screen and have a slider keyboard.
Separately, late yesterday, IDC reported that RIM’s shipments in the second quarter rose 40 per cent from a year earlier to 11.2 million, and it boosted its market share to 3.5 per cent from 2.9 per cent, ranking it fourth among mobile phone manufacturers, behind Nokia, Samsung and LG Electronics.
“Research In Motion posted the highest year-over-year gain (40 per cent) of all the top five vendors, a feat accomplished by its singular focus on the smart phone market,” IDC said.
- Read the Bloomberg story
- RIM aims to take bite out of Apple
- In pictures: You’ve come a long way, BlackBerry
- BlackBerry v. iPhone: the ultimate showdown
Canada’s recovery slows to a crawlCanada’s economy expanded just 0.1 per cent in may, the second month in a row of virtually no growth, leaving just one to pick up steam if the second quarter’s going to be anything worth talking about. Goods-producing industries rose 0.6 per cent in the month, led by the energy industry, while manufacturing edged up and the construction and utilities sectors fell back, Statistics Canada said today. Here are the highlights:
- Services industries dipped 0.1 per cent, largely because of wholesale trade and a slowdown in the housing sector.
- The finance and insurance sector grew, as did activity among retailers.
- Mining, oil and gas rose 3.4 per cent, the third straight month of significant growth.
- Construction activity fell 1.6 per cent, driven by a drop of 3.8 per cent in home building.
- Home sales fell “significantly” in many regions of Canada, leading to a drop of 11.3 per cent among real estate agents and brokers. it was the fifth straight month of decline.
Unless June comes in like a lion, said BMO Nesbitt Burns economist Benjamin Reitzes, expect growth to slow further in the third quarter of the year. “While May’s modest GDP growth was a step up from the prior month, it’s clear that Canada’s economic momentum is ebbing,” he said. “Even so, the details of the report weren’t entirely soft, with most sectors seeing modest gains outside of construction and wholesale. while growth and inflation look poised to undershoot the [Bank of Canada’s] forecast, we continue to anticipate a [quarter of a percentage point] rate hike in September, though a softening outlook will prompt a pause in the last two meetings of 2010.”
However, added CIBC World Markets economist Krishen Rangasamy, “despite soft GDP prints for April and may, we’re not declaring [the second quarter] a writeoff just yet. If, as we expect, the quarter ended with a flourish, that should keep Canada on track towards growth of around 2.6 per cent.
U.S. also losing steamThe U.S. rebound is also losing steam, with economic growth slowing in the second quarter to 2.4 per cent annualized, partly because of the country’s fat trade deficit. That’s the slowest in almost a year, and compares to a 3.7-per-cent pace in the first three months of 2010. There are fears that the U.S. slowdown is spilling into Canada, given the ties among the two economies, and that this will continue to weigh on Canadian growth going forward. the U.S. pace of growth is also nowhere near what’s needed to help push down unemployment in the U.S.
Beata Caranci, Toronto-Dominion Bank’s deputy chief economist, said the “real story” came in revisions to previous data. the U.S. government revised first-quarter growth up a full percentage point to 3.7 per cent, but this was because of revisions that showed a deeper recession than believed, with a peak-to-trough contraction of 4.1 per cent rather than 3.8 per cent.
As for the second quarter, today’s report “supports the notion that a mid-cycle slowdown is well entrenched,” Ms. Caranci said. “The U.S. will not have a traditional period of pent-up consumer demand-driven growth. Real consumer spending has held below 2–per-cent growth in each of the past three quarters, when traditionally we would expect to see it in the 33 to 5-per-cent range. we expect consumer spending to lumber along in a 1- to 2.5-per-cent range over the quarters to come.”
IMF warns on U.S. banksThe International Monetary Fund says the U.S. financial system is recovering from one the biggest crises in almost a century, but it remains fragile and in need of repair.
“Bank balance sheets remain fragile and capital buffers may still be inadequate in the face of further increases in nonperforming loans,” the group said in a report today. “The economy and financial system remain vulnerable to an unexpected weakening of demand, credit quality in the commercial real estate (CRE) sector, and housing prices. recent months have also illustrated, both domestically and internationally, heightened risks of a sharp deterioration in market perceptions of sovereign risk.”
The IMF also cited several “significant” economic risks:
Sluggish growth as the short-term outlook could deteriorate with a slower-than-anticipated recovery.
Even worse real estate conditions as “a sharp rise in mortgage rates or a new wave of foreclosures could create a self-reinforcing price dynamic between low property prices, tight financial conditions, and a further rise in delinquencies and foreclosures.
Mounting government deficits and debt: “Especially in light of recent events in Europe, an erosion of market confidence could trigger higher interest rates and impair the process of balance sheet repair.”
Spain’s jobless rate tops 20 per centUnemployment in Spain has now surpassed the 20-per-cent mark, hitting a 13-year high of 20.09 in the second quarter. while the jobless rate rose, the number of people working also jumped, showing a large addition to the work force. across the euro zone as a whole, unemployment held fast at 10 per cent, for the fourth month in a row, despite a dip in Germany’s jobless rate. while Spain had the highest rate among the 16 countries that share the common currency, Austria had the lowest at 3.9 per cent. Data today also showed that inflation in the euro zone rose on an annual basis in July to 1.7 per cent from 1.4 per cent.
China reaches milestone, official saysA leading Chinese official says his country has now overtaken Japan to become the second-biggest economy in the world next to the United States. This milestone, according to the Reuters news agency, was made in passing in an interview posted on the wesite of the State Administration of Foreign Exchange. “China, in fact, is now already the world’s second-largest economy,” the country’s chief currency regulator, Yi Gang, said.
China, whose economy has surged in the post-recession period to become the global engine of growth, soared past European countries over the past several years, and could overtake the U.S. by 2025, according to other projections. However, Reuters noted, its per-capita income of some $3,800 (U.S.) a year pales in comparison to that of the U.S. and Japan.
Brookfield to become pure office companyThe Brookfield empire is shuffling assets in a series of proposed deals that would turn Brookfield Properties Corp. BPO-T into a pure office property company. Here’s the plan announced today:
- Brookfield becomes a global office property player by buying a stake in a big portfolio of Australian properties from its parent company, Brookfield Asset Management BAM-T. it will pay the equivalent of $1.4-billion (U.S.) for a stake in 16 office properties, valued at $3.4-billion, in Sydney, Melbourne and Perth.
- Brookfield also plans to sell its residential land and housing operations, saying it will begin talks with Brookfield Homes Corp. BHS-N to merge those businesses. If that goes ahead, Brookfield Properties’ interest would be converted into stock that it would offer to its shareholders. BAM, which owns 82 per cent of Brookfield Homes, is commiting to buy any shares of the merged group not taken up.
- Brookfield Properties would then change its name to Brookfield Office Properties. the deals would mark the culmination of a process that began with the creation of Brookfield Homes in 2003.
For Brookfield Properties, UBS Securities Canada analyst Ross Nussbaum called it a “questionable restructuring,” describing it as a “net negative” for shareholders, though with a couple of positive aspects. “While we’re not fans of the shift to a global strategy, there are a few positives of this restructuring including reduced exposure to lower Manhattan … a market that is likely to remain challenging over the next several years. Additionally, selling the Canadian housing business should be well received, though the structuring, timing, and pricing are critical unknown variables.”
Insurers to fight new rulesCanadian insurers are expected to come out fighting against a new set of proposed accounting rules that has just been released, the Globe and Mail’s Tara Perkins reports. the London-based International Accounting Standards Board has issued a draft of changes to the accounting regime for insurance contracts. “a fundamental review of insurance accounting was long overdue, with current practice resulting in financial information that is impenetrable to all but the most expert of users,” said Sir David Tweedie, chairman of the IASB.
The exposure draft is open for comment until the end of November, and Canada’s life insurers are expected to work hard before then to convince the accounting standard setters that they believe that aspects of the new rules will do more harm than good.
From today’s Report on Business
- Shell joins global energy asset selloff
- Economists weigh in on census debate
- Michigan spill halted, but Enbridge reputation still sullied
- Canada’s anti-attack ad culture
- Coffee prices on the rise
And, read our Streetwise blog and Your Business section
RIM plans iPad-rival dubbed Blackpad for fall, report says – The Globe and Mail
