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Category Archives: Finance

Research -Telecommunication Industry in Canada

It was my another assignment in 2008 as the below. My predict was not bad according to the stock charts of the Telecommunication Industry in Canada during the current years.

Market Overview

The Canadian wireless telecommunication services market grew by 14.58 % per year on average from 2003 to 2007 to reach a value of about $15 billion. In 2011, the Canadian wireless telecommunication services market is forecast to have a value of about $21 billion. The Canadian wireless telecommunication services market grew by 11.45 % per year since 2003 and to reach a volume of 20 million subscribers. In 2011, the Canadian wireless telecommunication services market is forecast to have a volume of 26.9 million subscribers. In the foreign market, Canada accounts for 7% of the Americas regional market value during 2006.

In the Canada wireless telecommunication service market, Rogers Communications was generating 36.6% of the market’s total volume in 2006. Bell Canada and TELUS Mobility were generating 31.70% and 27.30% of the market’s total volume.

The Canadian wireless telecommunication industry was at a growth stage of a business cycle, and its net profit has been increasing in recent years.In the next a few years, it is going to a mature stage of the wireless telecommunication service in a business cycle . The wireless telecommunication services usually focus on a local market; hence, there are not a lot of influences by some foreign markets. There are not a lot of foreign competitors in the Canadian telecommunication services’market now.

Every year, a lot of immigrants bring their capital, technology or knowledge to Canada. They work hard and want to build new homes. As a result, they increase societal consumptions, and reduce the business cycle period. They stimulate economic development in Canada. Every year, the population is increasing by 1% providing a large potential customer base to Canadian business such as communication business, food business and transportation business etc. Canadian economy has enjoyed steady development in recent years, and Canadian GDP has been increasing by around 3% annually. In order to support economies continue development; as a result, the communication technology will play an important role in the modern society.

Leading Companies

Rogers Communications Inc.

Rogers Communications Inc was founded in 1920 and is based in Toronto, Canada. It includes three businesses: wireless, cable and telecom; and media. This segment markets its products and services under the Rogers Communications and Fido brands through a distribution network of about 11,500 dealer and retail locations across Canada. It operates in the communications and media business in Canada, and provides services including cable television, local phone and long distance and wireless voice and data communications, radio and television broadcasting and high-speed Internet access. It also operates in video retailing, televised shopping, consumer magazines, trade and professional publication business as well as sports entertainment.

TELUS Corporation.

The company is the largest telecommunications service provider in western Canada. It provides a range of telecommunication products and services including IP, voice, entertainment and video. The company has 5.1 million wireless subscribers, 4.5 million network access lines and 1.1 million Internet subscribers.

BCE Inc.

Bell Canada Inc was founded in 1880 and is based in Montreal, Canada. It is Canada’s largest communications company offering local and long distance telephone, wireless communications, Internet access, data transmission and other service. Bell Canada Inc. Provides wireline and wireless telecommunications products and applications, satellite communications and direct-to home television services, systems integration expertise, electronic commerce solutions, Internet access, content and high-speed data services, primarily in Canada.

Bell Canada’s strategy of focusing on recurring revenues from its growth services combined with cost containment across all business units led to strong Bell EBITDA as BCE Inc. In wireline business, EBITDA grew by 5.4% as cost containment across all units, the strategy to move away from low margin equipment sales and lower pension costs, offset the erosion of higher margin legacy services. The main revenues come from wireline service and wireless service. The BCE has a higher net profit margin; as a result, BCE will have a higher return on stock than others. It is a more profitable stock.

The BCE has a higher current ratio 1.16 compare with Rogers 0.78; as a result, BCE has strength on a short-term solvency.

Although the three companies are telecommunication companies, they have their different main products. The majority of BCE’s revenue comes from wireline services, whereas Rogers focuses more on a wireless services and cable services. TELUS focuses on the main products of the two companies BCE and RCI, which are wireless services and wireline services. The wireline and wireless can make more profit than other communication products because they have higher net profit margins. Bell Canada and Rogers have diversified their products in the market. As a result, they can survive and earn profit in the telecommunication industry for a long time. Bell Canada and Rogers have some common products and services in Canadian market.

Bell Canada delivers CBC/Radio-Canada’s exclusive coverage of the Beijing Games on a number of digital platforms on Feb 1, 2008. Moreover, Bell Canada will be a premier national partner and exclusive communications partner to the Vancouver 2010 Olympic and Paralympic Winter Games. Those are good business opportunity to Bell Canada increase its market shares and net profit.

“Takeover of BCE passes key hurdle” in the Canadian Press, Craig Wong reported that BCE buyout by Ontario Teachers’ Pension Plan. It is favorable for BCE as it will get out from bondholders. BCE will reduce its company’s risk from reducing their debts. The BCE stock price would likely go up in the near future.

Conclusion
Overall, the telecommunication industry has a good prospect and is the favourable sector to investors. The telecommunication industry is at a growth stage of a business cycle; therefore, there are still some potential markets for expansion leading to increasing profits. Telecommunication industry has large potential customers in Canada market because the population continues to increase every year due to new immigrants, and we are in a high technology world. There is more and more demand for the wireless service and wireline service in recent years; as a result, the increasing demand will bring up the amount of supply. In the Canadian telecommunication industries, although companies have some common products, they also have some unique products and services in different locations. Consequently, the large companies can co-survive in the telecommunication market for a long time. Telecommunication industry is a high technology industry. It is a high-risk business but there is a high profit margin on their products and services. It is an attractive industry as investment purposes.

 
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Posted by on June 12, 2012 in Finance

 

Equity Research Report

I went to my “bravehost.com” website. I  felt that my predict was not bad after I saw my previous assignment in 2008 as the below .hahaa…

 

Air Canada Corp. (AAR Corp—NYSE)                                                          Target price (1 year): $16.70 USD

Quebec, Canada Current (10-Oct-2008): $12.22 USD

Industry: Airlines Return ( 1 year): 36.67% Risk: Mid

Crude oil demand declined in the middle of a worsening economic outlook caused by a global credit crisis. Investors concerned a weakening global economy is causing businesses and consumers to cut back on fuel consumption. The crude oil prices are going to decreasing and their prices would be between $65 and $75 during 2009. It is a good news for Airline industries. The stocks’ return of the airline industry will take a slight positive as oil prices are moving down. The airline industries’ profits have affected by the high fuel prices in recent years.

                       

The Canadian Airlines industry’s volume is expected to rise to 67.2 million people by the end of 2011, this representing a total average growth rate is 7% for the 2006-2011. In 2011, the Canadian airlines industry is forecast to have a value of $19.3 billion, and have a volume of 67.2 million passengers. The Canadian airlines industry’s volume includes 63.5% domestic passengers’’ accounts and 36.5% international passengers’ accounts. The Canadian currency has depreciated recently that would lead to Canadian airline tickets’ sales increase. Airline Industry is highly price sensitive. The majority of customers try to find the lowest prices of airline tickets for their trips.

Air Canada together with its regional airline subsidiary, Air Canada Jazz, provides scheduled and charter air transportation for passengers and cargo to more than 150 destinations, vacation packages to over 90 destinations. Air Canada mainline provides services directly to over 20 Canadian cities, 30 destinations in the US and over 50 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South America. Air Canada’s extensive global net work, schedules and customer services are enhanced through its membership in the Star Alliance network with Lufthansa, SAS, Thai Airways International, United Airlines etc and Star Alliance carriers serve airports in over 130 countries.

Air Canada provides a full service online travel site offering low prices and one-stop access to 450 airlines, 53,000 hotels and 52 car rental agencies.

There are numbers of factors that could cause the stock price to come short of our expectations. The leading one is the market prices of crude oil. If the crude oil price is creasing above $100, it will reduce the Air Canada Corp’s net earnings.

The second one is that the world economy is in a deep recession period now. If the deep economic recession continues in the next year, the demand of airline tickets would be decreased during the next year. It would affect the Air Canada Corp’s revenues and net earnings.

 
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Posted by on June 12, 2012 in Finance

 

Hot money inflows soar 26%

China’s foreign exchange regulator said that speculative “hot money” inflows are putting pressure on the economy, with the volume of illegal currency exchanges rising by 26% in the first half of the year, Caixin reported. The State Administration of Foreign Exchange (SAFE) announced that 1,800 illegal exchange operations have been shut down so far this year, involving more than US$16 billion worth of currency. The organization said it will continue to monitor hot money inflows and crack down on illegal currency conversions. China’s current account surplus hit US$69.9 billion in the second quarter, while its capital account surplus rose to US$67 billion. The country’s foreign exchange reserves, managed by SAFE, increased by US$136.9 billion over the same period to reach US$3.2 trillion.

 
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Posted by on August 19, 2011 in Finance

 

SAFE to keep up pressure on “hot money”

BEIJING, Aug. 18 (Xinhuanet) – The State Administration of Foreign Exchange (SAFE) pledged to keep up the pressure against “hot money”, as it seeks to deal with speculative capital inflows amid rising inflation and ample global liquidity.

In a statement posted on its website on Wednesday, the regulator said it had dealt with 1,865 cases in violation of the foreign exchange regulations in the first half of 2011, involving a total of $16 billion, 26 percent more than the same period last year.

SAFE has joined hands with law enforcement authorities and uncovered 10 cross-border cases, such as illegal private banks and online arbitrage transactions, with more than 10 billion yuan ($1.6 billion) involved.

“Facing a complicated economic situation at home and abroad, SAFE will continue fighting illegal cross-border capital flows and maintain high pressure on the inflow of hot money,” the statement said.

SAFE’s statement came as the exchange rate of the yuan against the dollar rose to a 17-year high this week and the US Federal Reserve Board announced it would hold interest rates at record lows in the long term.

China’s foreign exchange reserves increased by $274.9 billion in the first half to a record $3.2 trillion as of the end of June.

Liu Mingkang, head of the country’s top banking regulator, said on Wednesday that the pressure of imported inflation was persisting because of excessive liquidity globally.

“The slowdown of global economic growth, which leads to decreasing overseas market demand, is posing challenges to China,” Liu was quoted by the People’s Daily as saying.

Monetary easing in major developed economies is bringing stronger flows of short-term capital into emerging economies, further pushing up domestic inflation, he added.

“Emerging economies boast higher growth rates and interest rates and larger room for currency appreciation. Thus, they could easily become the destination of hot money,” said Zhang Ming, a researcher with the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

The consumer price index, a main gauge of inflation, reached 6.5 percent in July, the highest level in the past 37 months, causing the central bank to reiterate that price controls will remain its priority in the second half.

World Bank President Robert Zoellick said in Sydney on Sunday that China might let its currency appreciate to curb rising price pressures, which suggests the world’s second-largest economy will attract more global speculative capital.

“What’s more dangerous than actual appreciation is the expectation of appreciation,” said Guo Tianyong, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics.

“But once the yuan actually appreciates, the pressure will be eased.”

Guo said that with expectations for a third round of quantitative easing by the United States and an expected weak dollar in the long term, China must be vigilant, watching every possible direction and form of “hot money” inflows.

“While plugging loopholes, we should also find ways to guide some inbound capital to be used properly; we can encourage such capital to flow into small and medium-sized enterprises,” Guo said, adding that the mainland’s latest policy to allow the inflow of capital from Hong Kong is advisable.

 

 
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Posted by on August 19, 2011 in Finance

 

Forecasting:

Over the next five years we forecast that aggregate E&M global spending will rise to $1.9 trillion in 2015, a 5.7% compound annual advance driven by economic growth, but masking the accelerating shift of spending from traditional to digital platforms.

  • Currently digital accounts for 26% of all spending but by 2015 we expect digital’s share to rise to 33.9%.
  • Advertising, the most cyclically sensitive of the three E&M spending streams, recorded the largest year-on-year swing, rebounding at 5.8% in 2010 from an 11% slump in 2009. Overall global advertising will increase at a 5.5% compound annual rate to $578 billion in 2015.
  • In contrast Internet access spending was barely affected by the economic cycle and is expected to rise to $408 billion in 2015, an 8.6% compound annual increase.
  • Video-on-demand spending will pass pay-per-view in 2011 and reach $4.7 billion in 2015, a 9.8 percent compound annual increase from $2.9 billion in 2010.
  • Mobile advertising spending in EMEA in 2015 is predicted to grow at 33.2% CAGR, to $2 billion, putting EMEA on a par with North America, but behind Asia Pacific which will still lead with $4.5 billion.
  • Recorded music is the only segment where consumer/end-user spending will be lower in 2015 than in 2010, declining at 1.1% CAGR to $22 billion. Global recorded music revenues are not expected to show growth again until 2014, the year when spending on digital music will overtake physical spending.
  • Newspaper publishing revenues will continue to see strong growth in some countries. For example, Asia Pacific’s fastest-growing newspaper markets will be Indonesia, at a CAGR of 9.9 percent, and India, at 9.4 percent compounded annually.
 
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Posted by on August 19, 2011 in Finance

 

NASDAQ Delisting Rules

NASDAQ (National Association of Securities Dealers Automated Quotations) is an American stock exchange. Listed investments must comply with all requirements or face being delisted. It only takes 10 days for the NASDAQ to delist an investment. The exchange has the flexibility to suspend enforcement of continued listing rules for its 3200 listed companies during abnormal market conditions.


History



  • The Securities Exchange Act of 1934 created the rules for delisting investments that trade on a national securities exchange.
    An influx of new NASDAQ listings in the 1990s lead to a record 749 delistings in 1999 as the bullish small cap market crashed pushing many closing prices below the $1 minimum. The NASDAQ delisting rules were updated in 2004 to streamline the process by allowing electronic filing of a delisting notification form via the EDGAR online reporting system. The exchange reexamined suspension and delisting rules in 2006 as companies struggled to comply with reporting and continued listing requirements. The most recent continued listing requirements can be found on the NASDAQ website.

  • Each of the NASDAQ’s three electronic trading markets (NASDAQ GLOBAL Market, NASDAQ Global Market Select, and NASDAQ Capital Markets), has its own requirements for initial and continued listing. Securities and Exchange Commission (SEC) marketplace rule 4330(a) gives the NASDAQ the authority to suspend or delist securities in instances where the exchange believes continued listing would be inappropriate, even though other listing criteria are met. This rule allows NASDAQ to control the quality and moral character of the exchange.
    Reasons NASDAQ may delist or suspend a security:
    • Not meeting continued listing criteria;
    • Bankruptcy;
    • Independent Auditors disclaimers on financial statements or failure to file required reports;
    • NASDAQ believes the action is necessary to protect investors;
    • A company is part of a reverse merger with a company not previously listed on the NASDAQ resulting in a non-listed company obtaining a NASDAQ listing.
    The NASDAQ temporarily disregards enforcement of listing rules due to market conditions. For example, the NASDAQ occasionally suspends enforcement of the $1 minimum value of publicly held shares when the market is very volatile.

  • The delisting process is very specific:
    1. NASDAQ notifies the company of pending suspension or delisting. The company may request a review hearing.
    2. NASDAQ requests additional information from the company, which must be accurate and delivered on time. For delinquency of filing required reports, the company may be granted up to 180 days to meet requirements.
    3. The NASDAQ Review Panel considers the circumstances surrounding the company and decides if the exchange will pursue suspension or delisting.
    4. NASDAQ files form 25 with the SEC to delist the security.
    5. Ten days after filing, the SEC delists the security and within 90 days withdraws its registration. The investment no longer trades on the exchange.
    Listed companies can voluntarily delist securities by submitting a form to the Securities and Exchange Commission to be removed from the exchange.

  • Investments can be suspended or delisted. Suspended securities stop trading on the stock exchange but may be relisted if given requirements are met. Delisted securities and those involved in a reverse merger must re-apply using the criteria for a new listing.

  • NASDAQ publishes notices of suspended or delisted securities to the public and on the NASDAQ.com website. The companies themselves often issue press releases when they receive notice from the stock exchange. The SEC also lists suspended and delisted companies on its website.

  • The rules for NASDAQ delisting are part of the exchange’s self-regulating policy, which ensures compliance with rules and regulations of both the exchange and the SEC.
    Delisting from national exchanges reduces investor access to shares. Investments may still be traded on the Over-the-Counter Bulletin Board (OTC) or Pink Sheets, which have fewer listing requirements and are therefore considered more risky.

Function



  • Each of the NASDAQ’s three electronic trading markets (NASDAQ GLOBAL Market, NASDAQ Global Market Select, and NASDAQ Capital Markets), has its own requirements for initial and continued listing. Securities and Exchange Commission (SEC) marketplace rule 4330(a) gives the NASDAQ the authority to suspend or delist securities in instances where the exchange believes continued listing would be inappropriate, even though other listing criteria are met. This rule allows NASDAQ to control the quality and moral character of the exchange.
    Reasons NASDAQ may delist or suspend a security:
    • Not meeting continued listing criteria;
    • Bankruptcy;
    • Independent Auditors disclaimers on financial statements or failure to file required reports;
    • NASDAQ believes the action is necessary to protect investors;
    • A company is part of a reverse merger with a company not previously listed on the NASDAQ resulting in a non-listed company obtaining a NASDAQ listing.
    The NASDAQ temporarily disregards enforcement of listing rules due to market conditions. For example, the NASDAQ occasionally suspends enforcement of the $1 minimum value of publicly held shares when the market is very volatile.

Considerations



  • The delisting process is very specific:
    1. NASDAQ notifies the company of pending suspension or delisting. The company may request a review hearing.
    2. NASDAQ requests additional information from the company, which must be accurate and delivered on time. For delinquency of filing required reports, the company may be granted up to 180 days to meet requirements.
    3. The NASDAQ Review Panel considers the circumstances surrounding the company and decides if the exchange will pursue suspension or delisting.
    4. NASDAQ files form 25 with the SEC to delist the security.
    5. Ten days after filing, the SEC delists the security and within 90 days withdraws its registration. The investment no longer trades on the exchange.
    Listed companies can voluntarily delist securities by submitting a form to the Securities and Exchange Commission to be removed from the exchange.

Types



  • Investments can be suspended or delisted. Suspended securities stop trading on the stock exchange but may be relisted if given requirements are met. Delisted securities and those involved in a reverse merger must re-apply using the criteria for a new listing.

Identification



  • NASDAQ publishes notices of suspended or delisted securities to the public and on the NASDAQ.com website. The companies themselves often issue press releases when they receive notice from the stock exchange. The SEC also lists suspended and delisted companies on its website.

Significance



  • The rules for NASDAQ delisting are part of the exchange’s self-regulating policy, which ensures compliance with rules and regulations of both the exchange and the SEC.
    Delisting from national exchanges reduces investor access to shares. Investments may still be traded on the Over-the-Counter Bulletin Board (OTC) or Pink Sheets, which have fewer listing requirements and are therefore considered more risky.

 
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Posted by on August 17, 2011 in Finance

 

News Release of National Assimilation of FDI From January to June 2011

[Origin:Information by the Foreign Investment Department of the Ministry of Commerce]

From January to June this year, the top ten nations and regions with investment in China (as per the actual input of foreign capital) are as follows: Hong Kong (USD39.987b), Taiwan Province(USD3.792b), Japan (USD3.505b), Singapore (USD3.199b),  U.S.A. (USD1.679b),  R.O.K.(USD1.274b), U.K.(USD918m), Germany (USD678m), France (USD423m) and Holland (USD305m), total of which accounted for 91.64% of total actual use of foreign investment in the country.

According to the statistics of news release of foreign investment in June 2011. Foreign investment reached USD 60.891 billion, up by 18.4% year on year. Share Company with Foreign Investment reached USD 903 million, up by 212.92% year on year; and Stock Insurance reached USD 501 million, up by 864.25%. Foreign investment strategies have changed at recently based on  the statistics of news .

 
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Posted by on August 5, 2011 in Finance