By Angela Harmantas
The Chinese yuan keeps falling, making investors understandably nervous, but what could this mean for the Canadian economy? Today on Smallcappower our analysts take on that very question. Elsewhere, we talk about a zinc junior that’s ramping up production and discuss why Air Canada’s increased profits led to a 6 percent drop in share prices – here’s what you need to know today:
China’s currency devaluation is definitely making the business world nervous, especially as the yuan fell for the third straight day today. Our own Alex Cutulenco takes a look at what this could mean for Canada’s exports into China and how companies like West Fraser Timber (TSX:WFT) may fare. Elsewhere on the web CBC News’s Don Pittis calls the devaluation a “desperate move” by China that hurts investor confidence instead of boosting the economy, and over on Bloomberg analysts discuss the global ripple effect of the move.
What did you think of Sean Mason’s Small Cap Market Movers yesterday? I’ve liked zinc for a while now, it’s one of the lucky few minerals where supply is expected to outstrip demand as a number of large mines shut down production by the end of 2015. Here’s a piece published last month that talks about zinc’s strong fundamentals. Canadian junior miner Trevali Mining (TSX:TV) shipped and sold the first zinc concentrates from its Caribou mine in New Brunswick, Canada, last month, making them an interesting one to watch as they ramp up production.
Also making news yesterday: Air Canada (TSX:AC) reported second quarter profits of $296 million, up 33 percent from last year, but its stock still took a beating after its executives said that average fares will decline amid increased capacity on longer-range international routes. Shares decreased by 6.4 percent to close at C$12.08 in the biggest one-day drop in six months. I don’t think it’s time to hit the panic button on AC, profits should benefit from the bleak outlook for the loonie. Do you agree?
Have a comment or suggestion? I’d love to hear from you! Contact me at angela@smallcappower.com or on Twitter: @aharmantas.
