TMX sets up shop in China

The company that owns the Toronto Stock Exchange has opened an office in Beijing to help it convince more Chinese companies to list on Canada's largest stock exchange.

"We're pleased to continue [our] global expansion by opening an office in this important region," TMX Corp. president Tom Kloet said as the Beijing office was formally opened on Monday. "Opening an office in Beijing underscores our commitment to ensuring that the benefits of the Canadian capital markets are well understood around the world."

More than half of the world's publicly traded mining companies are listed in Toronto, as are more than a third of the world's public oil and gas names. China's booming economy has an insatiable appetite for resources at the moment, so just as Chinese firms are investing heavily in Canadian companies, the stock exchange is hoping more and more Chinese resource companies will want access to Canada's resource-savvy capital markets by listing on the TSX.

Earlier this year, TMX Corp. opened an office in London, England. That move was part of the company's overall objective of furthering its international profile and presence. Access to new European markets and investors was a centrepiece of the proposed merger of TMX Corp and the London Stock Exchange before that deal fell apart.

But setting up shop in China is the TMX's attempt to link up with an economy that's growing a lot faster than the traditional markets in Europe. TMX said in a release that the company's efforts in China will focus primarily on advancing Canada's capital markets and TMX's stock exchanges. The office will also provide the ability to offer enhanced services to new and existing clients in China.

In recent months, Chinese companies have come under increased scrutiny for their accounting practices after several accounting irregularities came to light.

Sino-Forest was once the most valuable forestry firm on the TSX until a report from short seller Muddy Waters alleged the company had misstated its assets. The company is currently under investigation by the OSC and trading in the shares is frozen.

There are already several dozen China-based companies that list on the TSX, but TMX Corp. is eager to see that figure climb even higher.

"The opening of the TSX office in Beijing demonstrates the opportunities that Canadian businesses see to further their relationship with the People's Republic of China," said Finance Minister Jim Flaherty, who was on hand for the opening. "It creates an important bridge between our respective capital markets and brings our market participants closer together."

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Upscale Tim Hortons 'ambience' revamp planned

Canadians may not associate espresso, arm chairs and soft lighting with Tim Hortons, but the upscale fixtures are part of the brand's latest makeover.

Along with the December launch of drinks like lattes and mochas, the chain is also giving some of its stores a facelift that invites customers to linger a little longer.

The redesign includes wireless Internet connections, bench seating, softer lighting, a new floor layout and a more open kitchen that gives customers the "ambience" of watching their food being prepared for them.

"While specialty coffee represents a relatively small part of the overall coffee market, it is a growing segment," executive chairman, president and CEO Paul House said on a conference call with analysts Thursday.

"We believe our entry with such a meaningful and relevant offering will reinforce our continued coffee leadership in Canada." The move is expected to encourage customers to come inside, sit and perhaps spend a little more money, rather than zooming through the drive-thru.

"A baked product is really, in some cases, an impulse buy so if you're looking and you like what you see you're more likely to buy it," House said.

The new interior is also designed to provide a more comfortable restaurant environment as Tims ramps up its food offerings.

Earlier this month, it launched a hot lasagna casserole in several restaurants and House said it plans to offer more "comfort foods." In the U.S. it is testing panini-style grilled sandwiches.

The makeover comes as the chain reports soaring profits and revenues based on the traditional offerings Canadians know and love Tims for — doughnuts, coffee, soups and bagels.

The company earned $103.6 million or 65 cents per diluted share in the third quarter, up from $73.8 million or 42 cents in the same 2010 period.

Revenue totalled $726.9 million, up from $670.5 million.

The average analyst estimate had been for a profit of 64 cents per share, according to data compiled by Thomson Reuters. Same-store sales, a key metric measuring results from stores open at least a year, were up 4.7 per cent in Canada and 6.3 per cent in the United States.

Still, the company remains focused on how to succeed in an intensely competitive Canadian coffee market as it watches competitor McDonalds also remake its image.

Just days after Tims announced it would introduce espresso-based drinks, McDonalds said it would do the same.

Specialty drinks had been a territory traditionally left to the baristas at Starbucks or Second Cup, but Tims new machines allows it to brew up similar beverages, while maintaining the low cost and fast service it's known for.

Its espresso based beverages start at $2, about 40 per cent cheaper than Starbucks.

But House said he isn't afraid of alienating the chain's core customers, those who come for a "double-double" and a doughnut.

The chain is simply reacting to the evolving tastes of Canadian coffee drinkers, he said, adding that Tims has made some decisions considered risky in the past — such as becoming the first Canadian chain to ban smoking in the 1990s.

"Every time we've done it, there's always that concern you're going to turn off your core customers, but so far we've been successful and not done that."

Tims also caters to local market tastes when it considers how to design or renovate stores, he said.

"Some of these new style restaurants will not be the right features for rural markets and so forth, I don't know if they're going to want leather chairs," he said.

"But in the city markets, especially in the downtown areas of Toronto and so forth, that's really what that market expects." During the quarter, the company opened 41 locations in Canada and 23 in the U.S.

The company has also signed a licence agreement with Dubai-based Apparel Group to open up to 120 restaurants in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years.

Shares in the company were up one per cent or 55 cents to $50.09 Thursday on the Toronto Stock Exchange.

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Harper looks to Asian energy markets after Keystone delay

Prime Minister Stephen Harper told U.S. President Barack Obama at the APEC summit on Sunday that Canada will look for new markets in Asia for its oil and gas, now that the Keystone pipeline has been delayed for more than a year.

Harper made Canada's disappointment in the delay clear when the two leaders sat down for almost 30 minutes at the summit in Hawaii.

All of Canada's oil and gas exports currently go south of the border, and Keystone would transport crude from the oilsands to Texas. Now, however, Harper says the U.S. decision has left him no choice.

"I did indicate to him, as I did to the president of China yesterday [Saturday], as our government has indicated, this highlights why Canada must increase its efforts to make sure it can supply its energy outside of the United States and into Asia in particular," Harper said.

To that end, the prime minister will visit China sometime next year. As well, Canada has decided to signal formally that it is interested in joining the Trans-Pacific Partnership, a group of Asian countries that aims to boost trade and lower tariffs in the Asia-Pacific region.

The United States has also discussed joining the TPP.

Previously, there has been resistance to Canada's participation, because of its staunch protection of the dairy, poultry and egg sectors. Harper now says he feels Canada can do both.

"We're constantly in trade talks, but I continue to believe we can advance our interests and at the same time protect our interests in those agricultural sectors," he said.

According to the White House account of the meeting, Obama said he supported the decision to delay TransCanada's Keystone XL project "to ensure that all questions are properly addressed and all the potential impacts are properly understood."

During a bilateral meeting on Saturday, Chinese President Hu Jintao noted with approval Harper's attempts to reach out, and invited him to visit next year.

"You have repeatedly stated that you attach importance to our relationship and that you hope to forge an even closer relationship with China," the Chinese president said. "I appreciate that position."

Harper also signalled that a border security deal with the U.S. is nearing conclusion. He announced that he'll visit Obama in December and the deal will be part of their discussions

The "Beyond the Border" deal was announced with much fanfare nine months ago as a way to continue to secure the borders but not choke off vital trade.

"It will be a very comprehensive package when it is announced," Harper said.

With files from Susan Lunn in Honolulu and The Canadian Press

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Debt's dirty dozen danger signs

If there's one plaintive cry you tend to hear again and again from credit counsellors, it's this: "If only our clients had come to see us sooner."

By the time many people actually ask for help, their debt problems are so huge that their credit ratings are in tatters and some solutions may no longer be an option.

With that in mind, here are a few of the early warning signs that are pretty good indicators that people may be on their way to financial disaster and should seek help. See if any apply to you.

1. You are only able to make the minimum monthly payment on your credit card debt. A corollary of this warning sign: using a cash advance from one card to pay off another. Imagine that you've racked up a $5,000 debt on a card that charges 19.9 per cent annually. No problem, you say … you just need to make a minimum monthly payment of 3.0 per cent of the balance owning — or $150, in this case. But add in another couple of credit cards with high interest rates, and you can see how making even the minimum payment can quickly become a problem. And don't think of it as a debt of $150. You still owe $5,000. And in the early years, those minimum payments are mostly interest. By the way, in this example, paying the minimum will see that debt hang around for more than 20 years!

2. You're delaying utility bill payments. Most people know that if they pay their electricity or water bill a few weeks late, the service won't get cut off immediately. But stalling one creditor to pay another is a classic "I'm in trouble" indicator. And if you can't make your utility payment one month, how likely is that you'll be able to make a double payment next month?

3. You cash in some of your RRSPs before retirement. More and more Canadians are doing this. A Statistics Canada study found that almost a quarter of taxpayers over one nine-year period cashed in some of their RRSPs following events like the loss of a job or the death of a spouse. Raiding RRSPs early is generally not a good idea as it usually results in a big tax hit and robs you of future retirement income.

4. You argue with your spouse about money. Divorce experts say financial difficulties are a leading cause of splitting up. If you're hiding purchases or the extent of your debt from loved ones, or losing sleep at night, these are all warning signs that should not go unheeded.

5. You are constantly using your overdraft protection. Some people have several accounts, all deep into overdraft territory. Besides the high interest rates these accounts charge, if you're managing to not bounce cheques only because of overdraft protection, things will only get worse.

6. You're broke the day after payday. Living paycheque to paycheque is a fact of life for many people. But when the money that's meant to last for the next two weeks has disappeared in 24 hours, that's a crisis that often sends people to payday loan and cash advance companies. They're only too happy to provide you with an advance on your next paycheque in return for huge fees and interest charges. Putting aside part of your paycheque in an emergency account can help you deal with unexpected expenses.

7. You consolidate your debts every other year. Many people pay off their high-interest rate credit card debt by refinancing their home and rolling that debt into their lower-interest rate mortgage. But some can't resist running up their credit card debt again and end up having to arrange another consolidation several years later. That's a strategy that's eventually likely to backfire. "People can't borrow their way out of debt," points out Rob Boulanger, the director of counselling at Credit Counselling Services of Atlantic Canada in Saint John. "They're just repackaging their debt in different form and extending their debt over God knows how many years."

8. Cutting back on essentials. By this, we don't mean cutting out those $4 lattes to save some money. We're talking about cutting back on food or clothing or cutting out one meal entirely in order to make payments to creditors. Boulanger says he sees seniors doing without needed medications or cutting dosages in half so they can pay their other bills. "It's a generational thing," he says. "The older crowd often has a 'pay your bills at all costs' mindset, even if it endangers their own health."

9. You keep applying for more credit. If you're applying for new credit cards, regularly asking for increases in credit limits or are constantly borrowing from friends and family members to make ends meet, then you're regularly spending more than you take home. If something doesn't change, bankruptcy will likely loom.

10. You're charging everyday expenses like groceries and gasoline because you don't have the cash on hand. It's one thing to charge everyday purchases so you can collect more reward points. But if you have to charge it because there's nothing in your wallet or chequing account, the reward points are nothing but a dangerous distraction. If you aren't able to pay off your credit card bill in full each month, this strategy of putting everything on that card will blow up in your face. It's astonishing how fast the "little things" add up.

11. You regularly get past-due notices or get calls from creditors asking for payment. Paying the occasional bill late happens to many of us. But if it happens all the time, or if you regularly bounce cheques, these are serious warning signs. One side note: If you have the money and pay bills late just because you're a procrastinator, arrange for automatic bill payments. Paying bills after their due date — even just a month late — lowers your credit score and can make it more difficult to borrow at preferential rates. It also voids the interest-free grace period.

12. You don't actually know how much money you owe. Most of us, at least at some time, have wondered where all the money goes. Some people, though, have taken that to the extreme. "Some people are subsidizing themselves through credit, and they don't really know it," Boulanger says. "Some don't know they're in trouble. Once their credit maxes out and they can't get any more, only then do they realize they're in trouble."

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U.K. cabinet minister eyes limits on CEO pay

Britain's business minister says he's sympathetic to the Occupy movement and will consider bringing in legislation to curb CEO salaries.

In an interview that aired Sunday, Business Secretary Vince Cable told the BBC that skyrocketing pay for executives against a backdrop of job and benefit cuts for the average worker "causes a lot of public anger and indignation, and we're seeing some of that spill over into protests in recent weeks."

"I have some sympathy with it," Cable continued.

Cable, a Liberal Democratic MP from west London, was his party's point person on economic issues before becoming a minister last year in Britain's coalition government.

He's been campaigning for months to reform executive pay, which has bounded up by 75 per cent over the last two years for senior executives at Britain's top 100 publicly traded companies, according to research by the firm Income Data Services.

Meanwhile, unemployment hit a 17-year high in the United Kingdom last month, while average wages, after accounting for inflation, are falling.

"A small number of people have done extraordinarily well in the crisis, often undeservedly, and large numbers of other people who played no part in causing the crisis have been hurt by it," Cable told the BBC.

He said shareholders at publicly traded companies need to take the reins in curbing excessive pay packages for executives, but the government would step in if necessary.

“If it does require legislation, of course we’ll introduce it,” he said.

A discussion paper Cable published two months ago floated several ideas for keeping top corporate salaries in check, including having employees sit on companies' remuneration committees.

The global Occupy rallies, which began with protests on Wall Street and have inspired international demonstrations, have touched Britain as well. Hundreds of demonstrators have been camping for weeks outside St. Paul's Cathedral in London to denounce corporate excess and seek economic justice.

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Japan returns to 6% growth after earthquake

Japan's economy grew for the first time in four quarters in a comeback from the earthquake and tsunami disaster that already faces multiple global headwinds.

The world's No. 3 economy expanded at an annualized rate of 6 per cent in the July-September period, driven by exports, the Cabinet Office said in a preliminary report Monday.

It was the first growth in four quarters. The result was in line with market forecasts, including Kyodo News agency's projection of 6.2 per cent annualized growth.

"Having something as strong as hoped for is really good news," said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. "Basically all parts of the economy were expanding. And this is extremely important because we see a slowdown internationally, which is already hitting exports."

While such a robust rebound is encouraging, it is unlikely to last.

"The situation surrounding our country's economy is becoming tougher as we see the recovery in overseas economies weakening and face the impact of the Thai flood, in addition to the yen's rapid rise," said economic and fiscal policy minister Motohisa Furukawa, according to Kyodo.

Economists expect GDP — a measure of the value of all goods and services produced domestically — to contract in the last three months of the year before turning moderately positive again next year.

Last week, Japan's lower house of parliament passed a $157 billion US extra budget to help fund recovery efforts in Japan's tsunami-battered northeast. The budget also includes measures aimed at easing pressure from the yen's recent surge.

Considered a safe haven, the Japanese currency has hit record highs against the dollar this year amid intensifying worries about Europe and the U.S. The climb is particularly painful for exporters, whose overseas earnings shrink in value when repatriated.

The new government spending should help offset weaker overseas demand, said Kyohei Morita, chief economist at Barclays Capital in Tokyo.

"We maintain our view that Japan is likely to outpace other advanced economies in 2012," Morita said in a research note Monday.

The International Monetary Fund agrees. It estimates Japan's economy will expand 2.3 per cent next year — the strongest growth forecast among the Group of Seven countries including the U.S., U.K. and Germany.

Japan's latest annualized GDP figure translates to growth of 1.5 per cent from the previous quarter, according to the Cabinet Office.

Consumer spending, which accounts for some 60 per cent of the economy, climbed 1 per cent from the previous quarter.

'Japan is likely to outpace other advanced economies in 2012'—Barclays analyst Kyohei Morita

Capital investment by companies rose 1.1 per cent. Exports jumped 6.2 per cent.

The March 11 earthquake and tsunami killed thousands of people and wiped out large swathes of Japan's northeastern coast. The disasters damaged many factories in the region, causing severe shortages of parts and components for manufacturers across the country, including automakers.

The tsunami also crippled a nuclear power plant that triggered the worst nuclear crisis since Chornobyl.

Since then, the country has steadily fixed its factories and benefited from pent-up demand for Japanese goods such as cars.

Toyota Motor Corp.'s production had recovered to pre-tsunami levels by September, earlier than initial estimates. Output took another big hit due to the recent flooding in Thailand, but the automaker said last week production in Japan would return to near normal levels Nov. 21-25.

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New plastic $100 bills go into circulation

Canadians can get their hands on the country's newest banknotes Monday — $100 bills made from a plastic polymer designed to last longer and thwart counterfeiters.

Bank of Canada governor Mark Carney will be on hand at an afternoon ceremony in Toronto to formally launch the bills.

First announced in June, the bills are a departure from the current cotton-and-paper bills in circulation because they feature the latest in anti-counterfeiting technology.

Counterfeiting became a major problem between 2001 and 2004, when it peaked at 470 fake bills for every one million in circulation. Since then, officials have been able to use new technology to get that figure down to only about 35 fake bills for every one million in circulation today.

To fight that, the new bills have two transparent windows built into them that make them difficult to forge but easy to verify. One extends from the top to the bottom of the bill and has holographic images. Another window is in the shape of a maple leaf.

There is also transparent text, a metallic portrait, raised ink and partially hidden numbers throughout.

The bill commemorates Canadian innovations in the field of medicine and features an updated portrait of onetime Canadian Prime Minister Robert Borden.

The $100 is just the first denomination to be released. A new $50 bill is expected in March, follow by new $20, $10 and $5 versions. All are expected by the end of 2013.

Because they are made of durable polymer, the new bills are expected to last 2.5 times as long as the current ones. That alone could save the government $200 million or more over the life of the series, officials say.

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