Five things you need to know before you start your work day on Feb. 6
Good morning! Editor Nicole MacAdam (@nicole_mac1) here with your morning snack of business news, including why critics of the planned takeover of a Canadian construction company by a state-owned Chinese firm are concerned.
A sell off, and lingering questions
Investors will be watching this morning to see whether the volatility that has gripped markets in recent days continues. The Dow Jones industrial average plunged as much as 1,500 points yesterday, erasing its gain for the year, as the market extended a slump that began Friday. The TSX was off 1.7 per cent on the day.
Bottom line: The big question for investors is whether the global economy is moving away from the slow growth, low inflation and low interest rates that prevailed over the last decade.
Quote: “I think sentiment was a little too optimistic. What was driving the market up in January? It wasn’t the fundamentals, as good as they were, it was excessive confidence,” Brad McMillan, chief investment officer for Commonwealth Financial Network, said.
Lululemon CEO is out
Lululemon, a brand that based its corporate ethos around personal development and communal fitness classes, shocked the industry late Monday when it announced CEO Laurent Potdevin had resigned for breaching the retailer’s code of conduct, reports Hollie Shaw.
Bottom line: It’s not a cheap exit: in a regulatory filing after markets closed Monday, Lululemon said it had agreed to pay Potdevin payments totalling US$5 million as part of his separation agreement, dated Feb. 2. Lululemon says its board of directors has immediately begun searching for a new CEO.
A ‘stepping stone’ for Beijing
As Ottawa reviews the proposed deal by the state-owned China Communications Construction Co. to buy Aecon Group, critics are urging the government to look past short-term interests of investors and consider the broader implications of Chinese capital inflows into sensitive assets, writes Jesse Snyder.
Bottom line: The forthcoming decision comes amid growing allegations of China increasingly peddling influence abroad. Australia, which has seen the most acute signs of bribery and intellectual suasion by Chinese firms among developed nations, is now crafting new laws to better defend against “unprecedented and increasingly sophisticated” efforts by the Chinese to sway public opinion.
HBC to be led by a retail veteran
Between placating activist investors and developing new ways to grow a veteran business in an increasingly unforgiving sector, new Hudson’s Bay Co. chief executive Helena Foulkes has her work cut out for her, writes Hollie Shaw. Foulkes, a former executive with U.S. drugstore giant CVS, will fill the void left at HBC after the abrupt departure last fall of veteran retail executive Jerry Storch.
Quote: “HBC has an amazing portfolio of retail banners, valuable real estate and an innovative approach to M&A that give it the ability to win. The future of retail will be defined by companies that think creatively about where the consumer and the world are headed,” Foulkes said in a statement.
TREB to appeal data decision
The Toronto Real Estate Board is taking a longstanding dispute over access to housing market data to the Supreme Court of Canada, seeking to appeal a lower court decision that allowed realtors to publish the sales histories of listed properties on their websites, reports Naomi Powell.
Bottom line: TREB argues the decision regarding anti-competitive practices was made without any “quantifiable evidence” that publishing the disputed data online would give realtors a competitive edge. “Without quantifying the effects on competition, it becomes a matter of speculation or blind inference as to whether the business practice has an effect on competition that is substantial, or any effect at all,” TREB’s documents state.