BMO Nesbitt Burns - Research Highlights Mar 31

Wednesday, March 31, 2010

*Click on title to view Comments **Click here to view Calendar of Events

Initiating Coverage Sino-Forest Initiating Coverage at Outperform; Welcome to the Plantation S. Atkinson

Large Cap Stocks Research In Motion Outlook and Model Before the Call T. Long

Uranium One Convertible Debenture Issue Completed; UUU Shows Relative Value to Peers

E. Sterck

Yellow Pages Income Fund Canpages Acquired at a Premium; U.S. Operations Vended Into Ziplocal T. Casey

Small Cap Stocks

Gammon Gold Target Price Reduced to C$10 on Disappointing Guidance for 2010–2012 D. Haughton / A. Breichmanas

Paramount Energy Trust $126 Million Acquisition and Conversion to a Corporation Announced G. Tait

Atlantic Power 2009 Results Below Expectations; Underperform Rating Maintained M. McGowan

Industry/Macro Comments

Materials - Metals & Mining Iron Ore Miners: Potential Impact of +95% Prices T. Robson / D. Radclyffe

Quantitative Analysis Relative Strength Filter — Justification Needed M. Steele

Quantitative Analysis Market Elements M. Steele

Economic Research A.M. Notes Economics

Disclosure Statements To view important Disclosure Statements go to http://research-ca.bmocapitalmarkets.com/Company_Disclosure_Public.asp

http://research-ca.bmocapitalmarkets.com/Company_Disclosure_Public.asp

Wednesday, March 31, 2010

Back to Index Earnings & Conference Calls

Harry Winston Diamond Corp (HW) EPS FY10 BMO Adj. EPS US$0.12/Headline EPS (US$0.78) vs. US$1.15 last year;Bloomberg Mean (US$1.01)

866-711-8198 (North America) or 617-597-5327 (International) (Passcode 60192806); Webcast: investor.harrywinston.com

Apr. 18:30 am

Today's Events & Marketing

EnCana (ECA) Company presentation in Los Angeles & San Francisco. Mike McAllister (VP, Canadian Deep Basin (Montney & Bighorn)), Todd Brown (Team Lead, Texana (Haynesville)) and Ryder McRitchie (VP, Investor Relations).

Artis REIT (AX.UN) Company presentation in Chicago. Armin Martens (President & CEO) and Jim Green (CFO).

Ballard Power Systems (BLD) Company presentation in Toronto

Mike Vinciquerra (Exchanges & Discount Brokers Analyst)

Marketing in Boston

Dan Salmon (Marketing Services & Advertising Agencies Analyst)

Marketing in Chicago

Economics/Industry Data Time Data Period BMO Capital

Markets Estimate Previous Period

Consensus

08:15 am U.S. ADP National Employment Report Mar. (e) +30,000 -20,000 +40,000 09:45 am U.S. Chicago PMI Mar. (e) 60.0 62.6 61.0 10:00 am U.S. Factory Orders Feb. (e) +0.2% +2.3%

Upcoming Events & Marketing Dan Salmon (Marketing Services & Advertising Agencies Analyst)

Marketing in Chicago Mar. 31-Apr. 1

Karine MacIndoe (Real Estate & REITs Analyst) Marketing in the Mid-Atlantic region Apr. 1

Dan Salmon (Marketing Services & Advertising Agencies Analyst)

Marketing in the Pacific Northwest Apr. 5

Wayne Hood (Broadline Retailing Analyst) Marketing in New York Apr. 5-6

Andrew Kaip (Precious Metals & Mining Analyst) Marketing in Boston & New York Apr. 5-7

INV Metals (INV) Company presentation in Toronto. Bob Bell (President & CEO) and Candace MacGibbon (CFO).

Apr. 6

BMO Capital Markets Calendar of Events

Page 2 • March 31, 2010 (Back to Index)

Gordon Tait (Royalty & Income Trusts Analyst) Marketing in Vancouver Apr. 6

Meredith Bandy (Coal Analyst) Marketing in Boston Apr. 6

Connie Maneaty (Personal Care & Household Products Analyst)

Marketing in Richmond & Atlanta Apr. 6

Lana Chan & Peter Winter (Financial Institutions Analysts) Marketing in Texas Apr. 6-8

Gammon Gold (GAM) Company presentation in Boston & New York. Scott Perry (CFO) and Anne Day (Director, IR).

Apr. 6-9

Joanne Wuensch (Medical Technology & Devices Research Analyst)

Marketing in the Mid-West Apr. 7

Karine MacIndoe (Real Estate & REITs Analyst) Marketing in Vancouver Apr. 7

Claude Proulx (Airlines & Special Situations Analyst) Marketing in Toronto Apr. 7-8

Cap REIT (CAR.UN) Company presentation in Winnipeg & Vancouver. Tom Schwartz (President & CEO) and Richard Smith (CFO).

Apr. 7-8

Christopher Brown (Oil & Gas International Producers Analyst)

Marketing in Winnipeg Apr. 8

Alan Laws (Oil Services Analyst) Marketing in New York & Connecticut Apr. 8-9

Christopher Brown (Oil & Gas International Producers Analyst)

Marketing in Toronto Apr. 9

Carl Kirst (North American Pipeline Analyst) Marketing in Boston Apr. 12

Wayne Hood (Broadline Retailing Analyst) Marketing in Europe Apr. 12-14

Gammon Gold (GAM) Company presentation in Texas, L.A. & San Francisco. Scott Perry (CFO) and Anne Day (Director, IR).

Apr. 12-14

Alpha Natural Resources (ANR) Company presentation in Europe. Kevin Crutchfield (CEO), Frank Wood (CFO) and Allen Todd (VP, IR).

Apr. 12-15

Alpha Natural Resources (ANR) Company presentation in Europe. Kevin Crutchfield (CEO), Frank Wood (CFO) and Allen Todd (VP, Investor Relations).

Apr. 12-16

Detour Gold Corp. (DGC) Company presentation in Europe Apr. 12-16

New Gold (NGD) Company presentation in Europe Apr. 12-16

BMO Capital Markets Calendar of Events


Randy Ollenberger (Oil & Gas Producers & Integrated Oils Analyst)

Marketing in Toronto Apr. 13-15

Gordon Tait (Royalty & Income Trusts Analyst) Marketing in Montreal Apr. 14

General Mills (GIS) Company presentation in the Mid-Atlantic. Don Mulligan (CFO) and Kristen S. Wenker (VP, Investor Relations).

Apr. 14

Carl Kirst (North American Pipeline Analyst) Marketing in the Mid-West Apr. 14-15

Jim Byrne (Integrated Oils & Refiners Analyst) Marketing in Vancouver Apr. 15

Paul Adornato & Richard Anderson (U.S. REITs Analysts) Marketing in Boston Apr. 15

Jeffrey Logsdon (Entertainment & Gaming Analyst) Marketing in Boston Apr. 15-16

Gammon Gold (GAM) Company presentation in Toronto. Scott Perry (CFO) and Anne Day (Director, IR). Apr. 16

Randy Ollenberger (Oil & Gas Producers & Integrated Oils Analyst)

Marketing in Montreal Apr. 16

Osisko Mining (OSK) Company presentation in Europe Apr. 19-23

Gordon Tait (Royalty & Income Trusts Analyst) Marketing in Toronto Apr. 20-21

Alamos Gold (AGI) Company presentation in Europe. John A. McCluskey (President and CEO) and Jeremy Link (Investor Relations Manager).

Apr. 21

John Morris (Apparel Retail Analyst) Marketing in the Pacific Northwest Apr. 21

Pacific Rubiales (PRE) Company presentation in Europe Apr. 22-23

Romarco (R) Company presentation in Europe Apr. 26-27

Jason Zhang (Healthcare - Biotech Analyst) Marketing in Boston Apr. 27

If you are interested in any of the above events, please contact your BMO Capital Markets Institutional Equity/Fixed Income salesperson, or the following: Toronto Events: Laura Heuff 416-359-5816 Montreal Events: Marjorie Heppell at 514-286-7231 Western Canada Events: Jennifer Crombie 604-443-1452 U.S. Events: Angela Dong 212-702-1969 Europe Events: Hannah Pead 44-207-246- 5418

This report was prepared by an analyst(s) employ d as a research analyst(s) under FINRA rules. For disclosure statements, including

Back to Index

Sino-Forest (TRE-TSX) Stock Rating: OutperformIndustry Rating: Outperform

M ember of: Top 15 Quantitative Stock Selections

March 31, 2010 Research Comment Montreal, Quebec

Stephen Atkinson BMO Nesbitt Burns Inc. (514) 286-7309 [email protected] Assoc: Joe Licursi/David Guenette

Price (29-Mar) $19.05 52-Week High $21.74 Target Price $32.00 52-Week Low $8.12 Initiating Coverage at Outperform;

Welcome to the Plantation The best time to plant a tree was 20 years ago. The next best time is now. ~Chinese Proverb

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Sino-Forest Corp. (TRE)Price: High,Low,Close Earnings/Share

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The Company China is the world's largest importer of logs, wastepaper and pulp. Sino-Forest

is the leading commercial forest plantation owner in China with 512,000

hectares under management and master agreements to expand to 1.4 million

hectares at capped prices. The company has developed its expertise in seedling

technology and intensive silviculture giving it a competitive advantage.

ed by BMO Nesbitt Burns Inc., and who is (are) not registerethe Analyst's Certification, please refer to pages 8 to 10.

Forecasts We are expecting improving results as Sino-Forest transitions its business to fast

growing plantations. Chinese log prices were up 10% in Q4/09. Management

expects a 5–10% increase in price in 2010. We have conservatively assumed an

annual 2% price increase over the next few years.

Valuation Based on our DCF analysis using a 13.5% discount factor, our 12-month target

price is $32.00. If we adjust EBITDA to include the cost of depletion of assets

as trees are harvested, Sino-Forest trades at 7x 2011E EV/EBITDA. Based on

our forecast, Weyerhaeuser is trading at a 2011E EV/EBITDA of 17x and Plum

Creek is trading at 22x. Excluding timberland acquisitions, free cash flow over

the next two years are expected to average about $3.75/share for a free cash

flow yield of 19.5%.

Recommendation Over the past four years, Sino-Forest achieved compound average annual

growth rates of 38% in revenue, 25% in diluted EPS and 51% in cash flow from

operations. We are initiating coverage of Sino-Forest with an Outperform rating.

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Last Data Point: March 29, 2010

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(FY-Dec.) 2008A 2009A 2010E 2011E EPS $1.33 $1.34 $1.52 $1.82 P/E 12.5x 10.5x CFPS $2.82 $2.90 $3.72 $4.25 P/CFPS 5.1x 4.5x EV/EBITDA 6.4x 5.1x 4.1x 3.4x ROE 14% 13% 13% 14% Gross Margin 41% 36% 36% 36% FCF -$205 -$259 -$299 $247 Quarterly EPS Q1 Q2 Q3 Q4 2008A $0.09 $0.24 $0.49 $0.51 2009A $0.15 $0.24 $0.48 $0.46 2010E $0.15 $0.21 $0.50 $0.67 Dividend $0.00 Yield 0.0% Book Value $11.66 Price/Book 1.6x Shares O/S (mm) 242.1 Mkt. Cap ($mm) $4,612 Float O/S (mm) 242.1 Float Cap ($mm) $4,612 Wkly Vol (000s) 4,188 Wkly $ Vol (mm) $68.4 Net Debt ($mm) $23.0 Next Rep. Date April (E)

Notes: Share price, target & capitalization in C$, all other values in US$ Major Shareholders: Paulson & Co. Inc. (18%), Davis Selected Advisers, L.P. (13%), First Call Mean Estimates: SINO-FOREST CORP (US$) 2010E: $1.54; 2011E: $1.93

Please r cluding the Analyst's Certification.

(Back to Index)

Research In Motion (RIMM-NASDAQ) Stock Rating: Outperform I ndustry Rating: Market Perform

March 31, 2010

Communications Equipment

Tim LongBMO Capital Markets Corp.

[email protected]

Kevin Manning Ari Klein 212-885-4102 212-885-4103 [email protected] [email protected]

Securities InfoPrice (30-Mar) $74.91 Target Price $88 52-Wk High/Low $88/$43 Dividend --Mkt Cap (mm) $41,725 Yield --Shs O/S (mm, BASIC) 557.0 Float O/S (mm) 557.0Options O/S (mm) na ADVol (30-day, 000s) 12,172

Price Performance

Outlook and Model Before the Call

Event RIMM reports FY4Q earning Wednesday after market close with a call to follow at 5:00 p.m. EDT. Dial-in: 800-814-4859. No pass code required.Replay: 416-640-1917. Pass code: 4177292

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RESEARCH IN MOTION LTD (RIMM)Price: High,Low,Close(US$) Relative to S&P 500

Impact Positive. We recently upgraded RIMM to OUTPERFORM as we believe competitive concerns are overblown and positive channels checks. We expect RIMM to report above-consensus revenue and EPS, driven by higherunits and stronger-than-expected sales of the 9700. We believe RIMM hadanother record international quarter with strong sales of both the 8520 and 9700. Western Europe, Latin America and Southeast Asia were all strong forRIMM internationally. We expect several product announcements from the upcoming WES, if not sooner, including availability of a WebKit browser, a slider touch/qwerty device, and the Tour 2.

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efer to pages 6 to 8 for Important Disclosures, in

Forecasts We model Q4FY10 revenue $4.5B and EPS of $1.32, above consensus of $4.3B and $1.28. We estimate 11.5M units, 4.75M net adds and ASP of $321.77, above consensus of 11M units, 4.6M and $319 ASP. For the May quarter we model revenues of $4.6B and EPS of $1.35 above consensus of$4.3B and $1.23. We estimate 11.9M units, 4.9M net adds and ASP of$315.33 above consensus of 11.2M units, 4.5M net adds and $314 ASP. Valuation Our price target of $88 is based on 15x our CY2011 EPS estimate. Recommendation We rate RIMM shares OUTPERFORM.

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La st Data Poin t: March 29, 2010

Valuation/Financial Data

(FY-Feb.) 2008A 200 9A 2010E 2 011E EPS Pro Forma $2.26 $3.44 $4.43 $5.40 P/E 16.9x 13.9x First Call Cons. $4.37 $5.10 EPS GAAP $2.26 $3.32 $4.37 $5.40

FCF $2.16 $1.08 $3.48 $4.40 P/FCF 21.5x 17.0x EBITDA ($mm) $1,839 $2,918 $3,851 $4,525 EV/EBITDA 10.4x 8.9x Rev. ($mm) $6,009 $11,065 $15,385 $19,074 EV/Rev 2.6x 2.1x

Quarterly EPS 1Q 2Q 3Q 4Q 2009A $0.84 $0.86 $0.83 $0.90 2010E $0.98A $1.03A $1.10A $1.32

Balance Sheet Data (11/30/09) Net Debt ($mm) -$1,663 TotalDebt/EBITDA nm Total Debt ($mm) $0 EBITDA/IntExp na Net Debt/Cap. nm Price/Book 6.1x Notes: All values in US$. Source: BMO Capital Markets estimates, Bloomberg, FactSet, Global Insight, Reuters, and Thomson Financial.

This report was prepared by an analyst(s) employ y the Financial Services Authority in the UK. The analyst(s) is (are) not registered as ements, including the Analyst's Certification, please refer to pages 4 to 6.

Back to Index

Uranium One (UUU-TSX) Stock Rating: Market PerformIndustry Rating: Market Perform

March 31, 2010 Research Comment London, UK

Edward Sterck +44 (0)20 7246 5421 [email protected]

Price (29-Mar) $2.71 52-Week High $4.07 Target Price $3.50 52-Week Low $1.54

Convertible Debenture Issue Completed; UUU Shows Relative Value to Peers

ed by BMO Capital Markets Ltd., authorised and regulated b a research analyst(s) under FINRA rules. For disclosure stat

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Uranium One Inc. (UUU)Price: High,Low,Close Earnings/Share(US$)

Event UUU has completed the issuance of C$260M in convertible debentures. BMO

Research is resuming coverage of UUU after a period of restriction.

Impact Neutral. The cash raised has a net neutral impact on UUU’s NPV/share and

EPS. Post the financing, UUU has an estimated cash balance of US$660M, of

which BMO estimates that US$550M is uncommitted and available for

acquisitions of exploration/development companies or projects.

Forecasts BMO forecasts sales of 6.0Mlb U3O8 in 2010 and 7.6Mlb in 2011, growing to

10.6Mlb by 2014.

Valuation

BMO estimates UUU to have an NPV of C$1.77/share.

Recommendation A Market Perform rating and C$3.50 target price values UUU in line with

uranium producers in the context of the BMO Research position that the

uranium market has entered a period of oversupply. Unclear use of proceeds for

the convertible debt issue appears to have weighed on the UUU share price,

which has underperformed its peer group in recent weeks. UUU is currently

trading at 1.5x NPV versus a producer average of 1.9x NPV.

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(FY-Dec.) 2008A 2009A 2010E 2011E EPS -$5.24 -$0.37 $0.00 $0.06P/E na 43.8x CFPS $0.08 $0.01 $0.16 $0.26P/CFPS 16.4x 10.1x U Price (US$/lb) $49.02 $46.99 $45.03 $49.70 U Sales (Mlb U3O8) 3.0 3.2 6.0 7.6 Kazakh Tenge (US$) $120 $153 $165 $175 EV/EBITDA 10.7x 17.2x 14.0x 7.5x Quarterly EPS Q1 Q2 Q3 Q4 2008A -$0.25 -$0.15 -$4.30 -$0.54 2009A $0.13 -$0.56 -$0.03 $0.10 2010E $0.00 $0.00 $0.00 $0.00 Dividend $0.00 Yield 0.0% Book Value $2.52 Price/Book 1.0x Shares O/S (mm) 587.4 Mkt. Cap ($mm) $1,592 Float O/S (mm) 587.4 Float Cap ($mm) $1,592 Wkly Vol (000s) 24,465 Wkly $ Vol (mm) $69.0 Net Debt ($mm) $63.6 Next Rep. Date May (E)

Notes: Share, target price & cap. in C$, all others in US$; Quart. do not sum to Ann. due to share count and rounding Major Shareholders: Widely held First Call Mean Estimates: URANIUM ONE INC (US$) 2009E: -$0.05; 2010E: $0.13; 2011E: $0.24

Changes Annual EPS Annual CFPS Quarterly EPS 2010E $0.02 to $0.00 2010E $0.18 to $0.16 Q2/10E $0.01 to $0.00 2011E $0.07 to $0.06 2011E $0.27 to $0.26 Q3/10E $0.01 to $0.00 Q4/10E $0.01 to $0.00


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Yellow Pages Income Fund (YLO.UN-TSX) Stock Rating: Market PerformIndustry Rating: Market Perform

March 30, 2010 Research Comment Toronto, Ontario

Tim Casey, CFA BMO Nesbitt Burns Inc. (416) 359-4860 [email protected] Assoc: David Fidler


Canpages Acquired at a Premium; U.S. Operations Vended Into Ziplocal

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Yellow Pages Income Fund (YLO.UN)Price: High,Low,Close Earnings/Share

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Acquisition of Canpages.

Impact Neutral. The acquisition of Canpages is strategically sound in that in removes a

competitor (albeit a largely ineffective one) and appears to offer some

improvement in online execution. The downside is the transaction is priced at a

premium, despite no competitive bidders. In absolute terms, it isn’t enough to

move the dial. We view regulatory risk as low, given the approval of

SuperPages in 2005.


Forecasts

Relatively unchanged.

Valuation

Our $5.75 target price reflects ~6x 2011E EBITDA.

Recommendation YPG announced the acquisition of Canpages from private equity firm HM

Capital Partners for total consideration of $225 million. Canpages publishes 84

directories focused primarily in B.C., Alberta, Ontario and Quebec, many of

which will be closed over the next year or so. The transaction provides the

company with an increased sales force and should improve online execution

based on best practices at Canpages. In addition, in a separate transaction, the

company entered into a joint venture agreement with Ziplocal (also owned by

HM) where YPG will contribute its fledgling U.S. directory publishing business

and retain a 35% equity interest in the joint venture. We rate Yellow Pages

Market Perform.

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(FY-Dec.) 2008A 2009A 2010E 2011E EPU $0.89 $0.36 $1.04 $0.86 P/E 6.0x 7.2x FCFPU $1.24 $1.38 $1.21 $1.19 P/FCFPU 5.1x 5.2x CFPU $1.32 $1.47 $1.31 $1.29 Rev. ($mm) $1,697 $1,651 $1,660 $1,700 EBITDA ($mm) $931 $898 $910 $930 EV/EBITDA 7.2x 6.2x 6.9x 6.4x Quarterly EPU Q1 Q2 Q3 Q4 2008A $0.21 $0.24 $0.25 $0.17 2009A $0.26 $0.19 -$0.33 $0.25 2010E $0.25 $0.27 $0.26 $0.26 Dividend $0.80 Yield 12.9% Book Value $10.18 Price/Book 0.6x Units O/S (mm) 513.0 Mkt. Cap ($mm) $3,191 Float O/S (mm) 513.0 Float Cap ($mm) $3,191 Wkly Vol (000s) 11,280 Wkly $ Vol (mm) $62.3 Net Debt ($mm) $2,276.0 Next Rep. Date 06-May (E)

Notes: All values in C$; Voting Major Unitholders: Widely held First Call Mean Estimates: YELLOW PAGES INCOME FUND (C$) 2010E: $1.00; 2011E: $0.81


Back to Index

Gammon Gold (GAM-TSX; GRS-NYSE) Stock Rating: Market PerformIndustry Rating: Outperform


David Haughton BMO Nesbitt Burns Inc. (416) 359-4052 [email protected]

Andrew Breichmanas Assoc: Jeffrey Schok / Steven Willis

Target Price Reduced to C$10 on Disappointing Guidance for 2010–2012


Gammon Gold Inc. (GAM)Price: High,Low,Close

Event Gammon provided a 3-year operational outlook with production some 20–25%

below and total cash costs 10–15% above BMO Research forecasts and previous

guidance, primarily due to lower grades anticipated from the Ocampo open pit.

Total P&P reserves declined by 412koz to 2.55Moz gold equivalent due to

depletion and changes to the Ocampo open pit design. 0

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Impact Negative. BMO now expects Gammon to produce 172koz gold and 6.4Moz

silver at total cash costs of US$470/oz AuEq in 2010, rising to 190koz gold and

7.7Moz silver at US$462/oz AuEq by 2012, near the upper end of Gammon’s

guidance range.

Forecasts EPS has been trimmed by 38% to US$0.52/share for 2010, 41% to

US$0.58/share for 2011 and 51% to US$0.33/share for 2012.

Valuation Gammon’s target price has been reduced to C$10 following a 23% cut to 10%

nominal NPV (BMO commodity assumptions) to US$4.19/share. The new

target represents 1.6x 10% NPV at spot commodity prices. Gammon is trading

at a P/NPV of 1.3x, compared to its North American intermediate peers at 1.6x.

Recommendation Gammon Gold is rated Market Perform. Although the 3-year outlook is

disappointing, Gammon continues operational improvements at Ocampo where

the plant expansion is nearing commissioning and the underground ramp-up is

on track. Although exploration drilling has produced some prospective targets,

Gammon must also focus on reserve addition. BMO Research prefers Alamos

Gold and Minefinders among mid-tier, Mexican-focused gold producers.

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(FY-Dec.) 2008A 2009A 2010E 2011E EPS $0.18 $0.22 $0.52 $0.58P/E 14.9x 13.3x CFPS $0.56 $0.56 $0.95 $1.05P/CFPS 8.2x 7.4x Real'd Price (US$/oz) $863 $977 $1,150 $1,150 Prod'n (000 oz.) 150.6 133.2 171.5 175.4 Ttl. Cash Cost (US$/oz)$518 $461 $470 $459 T

tl. Prod. Cost $727 $695 $711 $705

Quarterly EPS Q1 Q2 Q3 Q4 2008A $0.05 $0.05 $0.04 $0.04 2009A $0.05 -$0.02 $0.05 $0.14 2010E $0.11 $0.11 $0.15 $0.15 Dividend $0.00 Yield 0.0% Book Value $5.68 Price/Book 1.3x Shares O/S (mm) 137.1 Mkt. Cap ($mm) $1,080 Float O/S (mm) 136.1 Float Cap ($mm) $1,072 Wkly Vol (000s) 8,208 Wkly $ Vol (mm) $75.8 Net Debt ($mm) -$92.0 Next Rep. Date June (E)

Notes: Share price, target and capitalization in C$, all other values in US$ Major Shareholders: Royce & Assoc 12.2%; Mason Hill Advisors 3.4%; Neuberger Berman 3.2% First Call Mean Estimates: GAMMON GOLD INC (US$) 2009E: $0.17; 2010E: $0.77; 2011E: $0.91

Changes Annual EPS Annual CFPS Quarterly EPS Target 2010E $0.84 to $0.52 2010E $1.39 to $0.95 Q1/10E $0.19 to $0.11 $14.00 to $10.00 2011E $0.98 to $0.58 2011E $1.57 to $1.05 Q2/10E $0.19 to $0.11 Q3/10E $0.23 to $0.15 Q4/10E $0.23 to $0.15


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Paramount Energy Trust (PMT.UN-TSX) Stock Rating: Market PerformIndustry Rating: Market Perform

March 30, 2010 Research Comment Calgary, Alberta

Gordon Tait, CFA BMO Nesbitt Burns Inc. (403) 515-1501 [email protected] Assoc: Chris Bolton, CFA

Price (30-Mar) $4.74 52-Week High $5.90 Target Price $5.75 52-Week Low $3.01 $126 Million Acquisition and Conversion to a

Corporation Announced Paramount Energy Trust (PMT.UN)

Price: High,Low,Close

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Event Paramount entered into an agreement to acquire oil and natural gas assets in the

Edson area of west central Alberta from Crew Energy Inc. for $126 million. The

transaction will have an effective date of January 1, 2010 and is expected to

close on or about April 1, 2010. While we were under a research restriction, the

trust announced Q4/09 results and plans to convert to a corporation.


Impact

Slightly Positive.

Forecasts We increased our 2010 CFPU estimate to $1.30 from $1.28. Our 2011 CFPS

forecast remains unchanged at $1.15. Our distribution/dividend forecasts remain

at $0.60 for both 2010 and 2011.

Valuation Our target price of $5.75 is based on a 6.7x 2010E debt-adjusted cash flow

(DACF) multiple.

Recommendation Following the conversion it is anticipated that a monthly dividend of $0.05 per

trust unit per month will be paid, on par with Paramount’s current distribution

policy. On an after-tax basis, all things being equal, Canadian taxable investors

should be better off post-conversion since they can take advantage of the

dividend tax credit. Even though Paramount’s units/shares currently offer a

prospective 12% yield, until we see a recovery in natural gas prices, we believe

the trust’s trading price may remain relatively range bound. We continue to rate

Paramount Energy Trust Market Perform.

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(FY-Dec.) 2008A 2009A 2010E 2011E CDPU $1.20 $0.64 $0.60 $0.60 P/CDPU 7.9x 7.9x CFPU $2.47 $1.96 $1.30 $1.15 P/CFPU 3.6x 4.1x Oil & Liq (b/d) 0 0 0 0 Nat. Gas (MMcf/d) 182.2 157.7 157.0 157.0 Boe/d (6:1) 30,367 26,283 26,167 26,167 EV/EBITDA 5.1x 4.4x 7.9x 8.6x Quarterly CDPU Q1 Q2 Q3 Q4 2008A $0.30 $0.30 $0.30 $0.30 2009A $0.19 $0.15 $0.15 $0.15 2010E $0.15 $0.15 $0.15 $0.15 Annual Dist. $0.60 Yield 12.7% Book Value $2.25 Price/Book 2.1x Units O/S (mm) 138.3 Mkt. Cap ($mm) $656 Float O/S (mm) 110.5 Float Cap ($mm) $524 Wkly Vol (000s) 1,893 Wkly $ Vol (mm) $8.9 Net Debt ($mm) $511.6 Next Rep. Date May (E)

Notes: All values in C$; Net debt and units O/S at Q4/09 adj. for acquisitions and crystallized hedging gain Major Unitholders: Management and Directors (20%) First Call Mean Estimates: PARAMOUNT ENERGY TRUST (C$) 2010E: -$0.29; 2011E: -$0.50

Changes Annual CFPU 2010E $1.28 to $1.30


Back to Index

Atlantic Power (ATP-TSX) Stock Rating: UnderperformIndustry Rating: Market Perform


Michael McGowan, CA, CFA BMO Nesbitt Burns Inc. (416) 359-5807 [email protected] Assoc: Mark Laing, CA

Price (30-Mar) $12.69 52-Week High $13.85 Target Price $11.00 52-Week Low $8.00 2009 Results Below Expectations;

Underperform Rating Maintained

-3

-2

-1

0

1

2

3

Atlantic Power Corp (ATP)Price: High,Low,Close Earnings/Share(US$)

6

8

10

12

14

Event Atlantic Power Corporation reported 2009 operating cash flow (before changes

in working capital) of US$0.70/share vs. our estimate of US$1.12/share. The

difference between actual and expected results appears to be the result of Q4/09

project EBITDA that was US$7.8 million below our estimates and significant

non-recurring costs associated with the internalization of management and the

conversion to a traditional common share structure. For example, during 2009

Atlantic Power recorded management and administrative expenses of US$26

million vs. US$10 million in 2008.


Impact Negative. In addition to reporting cash flow that was below expectations,

Atlantic Power has guided for lower cash flow in 2010 and 2011. Guidance

suggests that project distributions in 2010 and 2011 will decline by

approximately US$23–30 million compared to 2009 and the company is

forecasting a payout ratio of near 100% for the years 2010–2011.

Forecasts We have to reflect management’s revised cash flow guidance. Detailed changes

to our estimates are set out herein. Our CFPS estimates decrease to US$1.56

from US$1.73 in 2010 and to US$1.60 from US$1.73 in 2011.

Valuation Our $11 price target is consistent with our DCF valuation. Based on our 2011E

estimates, our target price implies an EV/EBITDA multiple of 8.3x and a yield

of 10%.

Recommendation At current levels, we believe the units are fully valued. Our rating is

Underperform.

0

5

10Volume (mln)

0

5

10

Q3 Q4 Q1 Q2 Q3 Q4 Q12008 2009

0

100

200ATP Relative to S&P/TSX Comp


0

100

200

(FY-Dec.) 2008A 2009A 2010E 2011E EPS $1.81 -$0.30 $0.54 $0.57P/E 22.8x 21.6x CFPS $1.55 $0.70 $1.56 $1.60 7.1x 7.1x Dividend $0.88 $0.91 $0.96 $0.96 EV ($mm) $1,043 $1,009 $1,217 $1,227 EBITDA ($mm) $164.0 $109.7 $115.9 $123.5 EV/EBITDA 6.4x 9.2x 10.5x 9.9x Quarterly EPS Q1 Q2 Q3 Q4 2008A $0.09 -$0.65 $1.08 $1.30 2009A -$0.53 $0.32 $0.39 -$0.49 2010E $0.08 $0.10 $0.22 $0.13 Dividend $1.09 Yield 8.6% Book Value $7.94 Price/Book 1.6x Shares O/S (mm) 60.5 Mkt. Cap ($mm) $767 Float O/S (mm) 53.4 Float Cap ($mm) $677 Wkly Vol (000s) 553 Wkly $ Vol (mm) $7.9 Net Debt ($mm) $462.1 Next Rep. Date 15-May (E)

Notes: Share price, target price, EV, EBITDA and capitalization in C$, all other values in US$ Major Shareholders: CDPQ - 19.0% First Call Mean Estimates: ATLANTIC POWER CORP (US$) 2009E: $0.20; 2010E: $0.76; 2011E: $0.78

Changes Annual EPS Quarterly EPS 2010E $0.71 to $0.54 Q1/10E $0.09 to $0.08 2011E $0.70 to $0.57 Q2/10E $0.13 to $0.10 Q3/10E $0.15 to $0.22 Q4/10E $0.34 to $0.13

This report was prepared in part by analysts employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and a UK affiliate, BMO Capital Markets Ltd., authorised and regulated by the Financial Services Authority in the UK, and who are not registered as research analysts under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 15 to 16.

Back to Index

Materials - Metals & Mining

Industry Rating: Market Perform

March 30, 2010 Research Comment Toronto, Ontario Tony Robson +1 416 359 4034 [email protected] Assoc: Jessica Fung David Radclyffe +44 (0)20 7246 5433 [email protected]

Iron Ore Miners: Potential Impact of +95% Prices

BMO Research has provisionally analyzed the earnings and valuation impact

on its iron ore coverage universe of a 95% increase in iron ore (fines)

settlement prices. The TEX Report has reported five Japanese steel mills

reaching an April–June agreement with Vale for US$105/wt (wet tonne) FOB

for Itabira fines (SSF).

Notably, BHP Billiton and Vale have been advocating for greater

transparency in iron ore price settlements, justifying the move to more

frequent pricing of its iron ore products. However, BHP’s overnight press

release provided almost no information to the market, while Vale has made no

release on the latest press speculation.

The lack of transparency – the adoption of “opaque” pricing – may result in

larger forecast earnings spreads by the market and quarter-to-quarter

variations.

Recent iron ore spot prices have reached over US$150/wt (landed price

China), which equates to approximately US$140/wt FOB Pilbara and

US$125/wt FOB Tubarão. A settlement price of US$105/wt FOB Tubarão,

while highest on record, is still well below current spot netted back to port.

BMO Research’s current JFY2010 iron ore price increases are 40% for fines,

45% lump, 55% pellets.

Fig 1: BMO Research ‘What If’ Spot Iron Ore Prices

2010E 2011E 2012E 2013E 2014E L/T

Pilbara Blend Fines US$/wt 113.80 113.80 113.80 113.80 77.27 59.11

Pilbara Blend Fines US¢/dmtu 189.2 189.2 189.2 189.2 128.4 98.3

Vale SSF US¢/dmtu 166.6 166.6 166.6 166.6 113.1 86.5

Tubarao BF Pellets US¢/dmtu 239.1 239.1 239.1 239.1 162.3 133.1

Iron Ore Fines % Change 95.0% 0.0% 0.0% 0.0% -32.1% -23.5%

Iron Ore Lump % Change 100.0% 0.0% 0.0% 0.0% -32.1% -20.5%

Iron Pellets % Change 110.0% 0.0% 0.0% 0.0% -32.1% -18.0%

Summary

BMO Research has performed a ‘what if’

analysis on a 95% increase in iron ore fines

and kept that constant for 2010E–2013E.

The presumed quarterly price of US$105w/t

FOB is below current spot prices of

US$140/wt FOB Pilbara and US$130/wt FOB

Tubarão.

Lowest 2010 P/E on the changes would be

FXPO, CLF and RIO.

Lowest 2011 P/E would be FXPO, FMG and

CLM.

Lowest 2010 EV/EBITDA would be FXPO,

CLF and RIO.

Lowest 2011 EV/EBITDA would be CLM,

FXPO and CLF.

Greatest impact on NPV would be FMG,

FXPO, CLF and CLM.

Source: BMO Capital Markets

This report was prepared in part by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 2 to 3.

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Relative Strength Filter March 31, 2010 Research Comment Quantitative/Technical Research Mark Steele (416) 359-4641 [email protected] Assoc: Tiberiu Stoichita

Justification Needed

CLICK HERE for a printer friendly version of this report including research disclosures.

• It is another quiet morning:

o the FX market is stable,

o bonds and equities snooze, and

o metals are mixed.

• We will use this session to highlight another one of our primary screens.

• If a company is underperforming the market, and sector, and is in a weak industry (where most stocks are doing the same), you ought to justify why you own it (this is also a good filter for shorts). This screen can be done on the market and on your portfolio at a click of a mouse.

• In Figures 1-3 we carve out the top 10 of U.S., Canadian and Global lists. The entire contents of the lists are found at the links below.

Figure 1: U.S. Incorporated – Underperforming Market & Sector in Weak Groups – See Full List

Figure 2: Canadian Incorporated – Underperforming Market & Sector in Weak Groups – See Full List

Figure 3: Global Stocks – Underperforming Market & Sector in Weak Groups – See Full List

Source: BMO Capital Markets, Bloomberg, Thomson, Markit

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/949758CE-239A-48A8-B112-F6AEF06BA3DF.xml

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/FD46E93E-458A-4B03-B4CF-C39FAE0B1B54.xml&customfile=true

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/297E674A-FE11-4EC8-B688-7CEC5F859863.xml&customfile=true

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/BF6BA5DC-4FBB-43B4-8F41-D9061E1BD799.xml&customfile=true

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/949758CE-239A-48A8-B112-F6AEF06BA3DF.xml

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/FD46E93E-458A-4B03-B4CF-C39FAE0B1B54.xml&customfile=true

http://research-ca.bmocapitalmarkets.com/RSFilterApp/v18/RelativeStrengthFilter.application?datafile=http://research-ca.bmocapitalmarkets.com/RSFilterApp/Data/297E674A-FE11-4EC8-B688-7CEC5F859863.xml&customfile=true

Back to Index

Market Elements March 30, 2010 Research Comment Quantitative/Technical Research Mark Steele (416) 359-4641 [email protected] Assoc: Tiberiu Stoichita

Equity markets snoozed; no global sector moved more than ±0.5%.

Most bond benchmarks were quiet, too (U.S. 10-year treasuries are forming a tight pennant); Greek, Portuguese, and Spanish spreads off of Germany widened.

Major currency crosses ended mixed against the greenback; Euro currencies were hurt by Greek sentiment; the British Pound rallied (third session now) back above the 1.5 mark.

Base metals led an “industrial” commodity rally, the LMEX has risen for four consecutive sessions; precious metals tracked the greenback.

Levels* Currencies (USD per) Commodities Government 10- Yr Benchmark Equity Indices & Sentiment

Symbol H/L Level %Chg Symbol H/L Level %Chg Symbol H/L Level Chg Symbol H/L Level %ChgDXY 81.48 0.2% DJ UBS 132.67 0.5% U.S 3.86 -0.00 S&P 1200

EU WTI Oil 82.40 0.3% Ca S&P 500 1,173 0.0%CHF NMX Gas 3.99 3.9% Germany 3.11 -0.02 S&P/TSX 12,044 0.1%GB 1.5066 0.5% Gold France 3.44 -0.02 Euro STOXX

JPYx10 Silver Switzerland 1.91 -0.00 FTSE 100

CAD 0.9807 0.1% Platinum Italy L 3.90 -0.02 Hang Seng 21,375 0.6%AUD 0.9187 0.1% Palladium Spain 3.82 -0.01 Topix H 980 1.4%NZD 0.7097 0.0% CMX Cu H 354.50 0.4% Greece S&P/ASX 4,917 0.4%BRL 0.5572 0.0% LME Al 3m 1.04 0.5% U.K Shang/Shen 3,367 0.2%MXNx10 H 0.8072 0.4% LME Ni 3m H 11.05 1.5% Au Sensex30

ZAR 0.1357 0.5% LME Zn 3m 1.08 2.1% Hong Kong CDX IG 5YrKRWx10 Lumber 282.90 1.0% Ind 7.74 -0.10 TRINSGD Co Japan 1.40 -0.01 VI

. 1,347 -0.0%R 1.3413 -0.5% nada 3.59 0.01

0.9374 -0.4%P 1,103.4 -0.6% 2,940 -0.3%

0.1077 -0.5% 17.32 -0.5% 5,672 -0.7%1,621.8 -0.4%

471.5 -0.2%6.44 0.15

. 3.99 0.02stralia 5.80 0.00 17,590 -0.7%

2.76 0.05 86.38 1.3%0.8839 -0.1% ia 1.48 44%0.7144 -0.1% rn 354.50 -0.7% X 17.13 -2.6%

Moves Currencies (spot) Commodities Government 10- Yr Benchmarks Equity Indices

This report was prepared in part by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 8 to 9.

1.0% 0.5% 1.0%0.0% 0.5%

EUR

JPY

CHF

KRW

SGD

NZD

BRL

AUD

CAD

MXN

ZAR

GBP

2.0% 0% -0-0.10

India

Germany

Italy

France

Japan

Spain

Sw itzerland

U.S.

Australia

Canada

U.K.

Hong Kong

Greece

.200.000.100.20 1.0% 0.5%0.0% 2.0% 4.0% 6.

Corn

Gold

Silver

Platinum

Palladium

WTI Oil

CMX Cu

DJ UBS

LME Al 3m

Lumber

LME Ni 3m

LME Zn 3m

NMX Gas

0.0% 0.5% 1.0% 1.5%

Sensex30

FTSE 100

Euro STOXX

S&P 1200

S&P 500

S&P/TSX

Shang/Shen

S&P/ASX

Hang Seng

Topix

Sectors S&P Global 1200 S&P Europe 350 S&P 500 S&P/TSX Composite

0.6% 0.4% 0.2% 6%0.0% 0.2% 0.4% 0.

Financials

Hlth Care

Telecom

Cons Disc

Industrials

Energy

Cons Stap

Utilities

Materials

Info Tech

1.0% 0.5% 1.0%0.0% 0.5%

Financials

Telecom

Utilities

Energy

Cons Disc

Hlth Care

Cons Stap

Materials

Industrials

Info Tech

1.0% 0.5% 1.0%0.0% 0.5%

Cons Disc

Info Tech

Industrials

Financials

Hlth Care

Materials

Energy

Telecom

Utilities

Cons Stap

1.5% 1.0% 0.5% 0.0% 0.5% 1.0% 1.5%

Info Tech

Materials

Cons Stap

Utilities

Telecom

Hlth Care

Financials

Cons Disc

Industrials

Energy

Source for all data and graphics in this publication: BMO Capital Markets, Bloomberg, Thomson * H/L = at a new closing 52- wk High/Low; / = within 10% of the 52- week High/Low; Colour codes are inverted for bond and sentiment indications

Market Elements

Daily Charts 3-Month View with 50- and 26-Day Moving Averages

It seems all the major news sources wanted to write about uranium today: Interest from China in the WSJ; Time to invest in uranium? - FT; May have ‘Hyper’ Price Run - Bloomberg; See commodity charts and Uranium Leveraged Relative Strength Profiles (it’s too early) –BMO Charts

“Dollar” 10-year bonds yields (rising) back to diverging with European yields (falling)

USD back to advancing vs. yen, as U.S. 2-year yield has first rise in three sessions

Currencies Commodities Bonds Equities

Page 2 March 30, 2010 (Back to Index)

Market Elements

Intra Day Charts 2-Day Tick View

Euro gives up 40% of the two-day rally, as Greek bond issue trades into the red – FT, Bloomberg, NYT

Currencies Commodities Bonds Equities


Market Elements

Daily Sector Charts 3-Month View with 50- and 26-Day Moving Averages

New Highs: U.S. – Industrials, Discretionary, Technology; Canada – Industrials, Discretionary ; Europe – Materials, Staples

S&P 500

S&P/TSX Composite

S&P Europe 350


Market Elements

Market Movers – Largest Daily Percentage Moves

U.S. – MEMC Electronic Materials (WFR) broke above falling 200d MA; implied volatility is rising, while historical volatility is falling

U.S. – Hotels – 7th session up in the past 8; we have the industry ranked 1st decile – see link

Canada – First Quantum Minerals (FM) gave update on DRC assets – BMO, MW

S&P Global 1200 ex U.S. & Canada S&P 500 S&P/TSX CompositeName Symbol % Chg Name Symbol % Chg Name Symbol % ChgSECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Energy AMEC PLC AMEC LN 3.2% FMC Technologies Inc FTI 3.8% Suncor Energy Inc SU 3.0%TonenGeneral Sekiyu KK 5012 JP 2.9% Rowan Cos Inc RDC 1.8% Canadian Oil Sands Trust COS-U 2.8%

PetroChina Co Ltd 857 HK 1.7% Hess Corp HES 1.7% Cenovus Energy Inc CVE 2.7%

Tullow Oil PLC TLW LN -1.3% Southwestern Energy Co SWN -1.3% Inter Pipeline Fund IPL-U -1.0%Cairn Energy PLC CNE LN -2.1% Cabot Oil & Gas Corp COG -1.3% PetroBakken Energy Ltd PBN -1.4%

-2.4% MEE -2.4% c Rubiales Energy Corp PRE -1.5%Technip SA TEC FP Massey Energy Co PacifiSECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER ChgMaterials JSR Corp 4185 JP 4.1% FMC Corp FMC 1.6% Consolidated Thompson Iron Min CLM 5.1%

Mitsubishi Chemical Holdings C 4188 JP 3.9% Praxair Inc PX 1.1% Labrador Iron Ore Royalty Inco LIF-U 4.6%

Nippon Paper Group Inc 3893 JP 3.9% Freeport-McMoRan Copper & Gold FCX 0.9% Lundin Mining Corp LUN 3.6%

ThyssenKrupp AG TKA GR Titanium Met r Gammon Gold Inc

Yamana Gold Inc YRI CN -2.4% Cliffs Natural Resources Inc CLF -2.2% Jaguar Mining Inc JAG -4.1%

Lonmin PLC LMI LN -2.6% Allegheny Technologies Inc ATI -2.3% First Quantum Minerals Ltd FM -7.1%-2.7% als Co p TIE -2.6% GAM -8.8%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Industrials Mitsubishi Corp 8058 JP 3.9% Danaher Corp DHR 4.5% Bombardier Inc BBD/B 1.8%

Toppan Printing Co Ltd 7911 JP 2.6% 3M Co MMM 3.6% Stantec Inc STN 1.6%East Japan Railway Co 9020 JP 2.6% First Solar Inc FSLR 2.4% TransForce Inc TFI 1.3%

Euro EAD FP Quanta S rv es nc Aecon Group Inc

British Airways PLC BAY LN -2.4% General Dynamics Corp GD -1.3% Transat AT Inc TRZ/B -1.2%

Hutchison Whampoa Ltd 13 HK -2.7% Cummins Inc CMI -1.5% IESI-BFC Ltd BIN -1.5%pean Aeronautic Defence an -2.8% e ic I PWR -1.8% ARE -1.5%SECURITY_NAME TICKER Chg SECURI YT _NAME TICKER Chg SECURITY_NAME TICKER Chg

Cons Disc Esprit Holdings Ltd 330 HK 4.4% Starwood Hotels & Resorts Worl HOT 2.6% Reitmans Canada Ltd RET/A 7.9%Yamada Denki Co Ltd 9831 JP 2.4% Macy's Inc M 2.2% Groupe Aeroplan Inc AER 1.0%

Nissan Motor Co Ltd 7201 JP 2.3% Discovery Communications Inc DISCA 1.9% Linamar Corp LNR 0.8%

Valeo SA FR FP Ford Motor Co Tim Hortons Inc

Electrolux AB ELUXB SS -3.4% DR Horton Inc DHI -1.8% Gildan Activewear Inc GIL -0.4%Cie Generale des Etablissement ML FP -3.5% Eastman Kodak Co EK -1.8% RONA Inc RON -0.5%

-4.7% F -2.1% THI -0.8%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Cons Stap Nippon Meat Packers Inc 2282 JP 1.8% SUPERVALU Inc SVU 3.0% North West Co Fund NWF-U 1.2%

Aeon Co Ltd 8267 JP 1.7% McCormick & Co Inc/MD MKC 1.2% Saputo Inc SAP 0.6%

Unilever NV UNA NA 1.7% Brown-Forman Corp BF/B 1.1% Alimentation Couche Tard Inc ATD/B 0.3%

Imper IMT LN Coca- Cott Corp

Kirin Holdings Co Ltd 2503 JP -0.7% Clorox Co CLX -0.4% Maple Leaf Foods Inc MFI -0.8%

George Weston Ltd WN CN -0.8% Hormel Foods Corp HRL -0.6% Loblaw Cos Ltd L -1.4%

ial Tobacco Group PLC -0.8% Cola Enterprises Inc CCE -1.0% BCB -2.8%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER ChgHealth Care Actelion Ltd ATLN VX 1.1% CareFusion Corp CFN 3.0% CML Healthcare Income Fund CLC-U 1.5%

Astellas Pharma Inc 4503 JP 0.9% McKesson Corp MCK 2.3% Biovail Corp BVF 0.0%

Terumo Corp 4543 JP 0.6% Thermo Fisher Scientific Inc TMO

Shire PLC SHP LN Tenet

2.3% SXC Health Solutions Corp SXC -0.4%

Daiichi Sankyo Co Ltd 4568 JP -1.5% Biogen Idec Inc BIIB -1.2% MDS Inc MDS -1.0%

Shionogi & Co Ltd 4507 JP -1.6% Cephalon Inc CEPH -2.5%-2.2% Healthcare Corp THC -2.6%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Financials Promise Co Ltd 8574 JP 8.1% E*Trade Financial Corp ETFC 4.4% Dundee Corp DC/A 1.4%

Shinsei Bank Ltd 8303 JP 4.5% Plum Creek Timber Co Inc PCL 1.8% CI Financial Corp CIX 0.9%

Resolution Ltd RSL LN 4.3% Ameriprise Financial Inc AMP 1.7% Davis & Henderson Income Fund DHF-U 0.9%

Alpha Bank AE Citigroup Inc Boar

Commerzbank AG CBK GR -3.3% Capital One Financial Corp COF -1.7% IGM Financial Inc IGM -1.4%

Royal Bank of Scotland Group P RBS LN -3.4% ProLogis PLD -2.0% FirstService Corp FSV -1.9%

ALPHA GA -4.1% C -2.2% dwalk Real Estate Investme BEI-U -2.2%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER ChgTechnology Konica Minolta Holdings Inc 4902 JP 3.5% MEMC Electronic Materials Inc WFR 5.7% Celestica Inc CLS 0.4%

Keyence Corp 6861 JP 3.1% Red Hat Inc RHT 2.7% MacDonald Dettwiler & Associat MDA 0.3%NEC Corp 6701 JP 2.9% Lexmark International Inc LXK 1.8% CGI Group Inc GIB/A 0.0%

Alcat ALU FP West n Digit l r

STMicroelectronics NV STM IM -1.9% Western Union Co/The WU -1.1% Open Text Corp OTC -0.1%

Infineon Technologies AG IFX GR -2.7% Tellabs Inc TLAB -1.2% Research In Motion Ltd RIM -1.3%el-Lucent/France -3.9% er a Co p WDC -1.6%SEC IUR TY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Telecom Telekom Austria AG TKA AV 2.3% Verizon Communications Inc VZ 2.6% Rogers Communications Inc RCI/B 0.4%NTT DoCoMo Inc 9437 JP 1.9% MetroPCS Communications Inc PCS 1.6% TELUS Corp T 0.3%

Chunghwa Telecom Co Ltd 2412 TT 1.3% Frontier Communications Corp FTR

Telstra Corp Ltd TLS AU AT&T Inc

0.8% Manitoba Telecom Services Inc MBT -0.0%

Telefonica SA TEF SM -1.1% Windstream Corp WIN -0.5% Bell Aliant Regional Communica BA-U -0.1%Cable & Wireless Worldwide CW/ LN -1.2% Qwest Communications Internati Q -0.8% BCE Inc BCE -0.5%

-1.3% T -2.1%SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg SECURITY_NAME TICKER Chg

Utilities Osaka Gas Co Ltd 9532 JP 2.8% NRG Energy Inc NRG 2.4% Capital Power Income LP CPA-U 0.2%

Tokyo Gas Co Ltd 9531 JP 2.2% Pepco Holdings Inc POM 1.5% Emera Inc EMA 0.2%

Chubu Electric Power Co Inc 9502 JP 2.1% Northeast Utilities NU 1.1% Atlantic Power Corp ATP 0.2%Gas Natural SDG SA GAS SM -0.7% Duke Energy Corp DUK -1.1% TransAlta Corp TA -0.4%

Cia Paranaense de Energia ELP US -0.9% AES Corp/The AES -1.5% Atco Ltd ACO/X -0.6%

Fortum OYJ FUM1V FH -1.0% FPL Group Inc FPL -1.9% Canadian Utilities Ltd CU -0.8%

Bold = move of more than 5%


Market Elements

Canadian Market Movers

Gammon Gold (GAM): negative outside reversal day on weak guidance – BMO

Reitmans Canada Ltd (RET.A) breaks to the upside on results (BMO) after four months of slumber

Energy Materials Industrials Consumer Discretionary Technology FinancialsSymbol H/L Last %Chg Symbol H/L Last %Chg Symbol H/L Last %Chg Symbol H/L Last %Chg Symbol H/L Last %Chg Symbol H/L Last %ChgPD-U 7.74 -0.5% 25.26 -2.4% 7.62 -0.1%

56 -0.3% 122.52 -0.4% 48.72 -0.1% 72.03 -0.2% 17 -0.1% 78 -0.5% 28.46 -0.9% CX 0.71 -4.0%

81 -5.0% 28.14 -0.0% 49.87 -0.2% 74.61 -0.4%

17.32 -0.7% 13.72 -1.5% ZNN 3.55 -1.3% 61.69 -0.3%22 -1.3% 86.00 -7.0%32 -0.2% 55.50 -1.8% 26.95 -0.3% 43.70 -0.2%36 -0.3% 14.05 -6.0% 75 -1.0%

33.39 -0.7% 6.59 -1.6% 43.18 -0.6% 8.23 -0.6%

IMO 91 -1.5% 11.74 -0.9% 21.20 -2.7%H 29.66 -0.1% 12.70 -1.5%C 68 -1.3% 16.21 -0.2% 11.75 -2.4% 11.12 -2.0%

13.78 -1.0% 12.09 -0.1% 05 -0.7%15 -1.3%

1.57 -3.0% 75 -3.0%23 -0.1% 27.36 -0.0% 10.71 -0.8% 83 -1.7% X

49 -5.9% 8.80 -3.2% 35.59 -0.1% 67 -2.3%17.17 -0.2% 19.73 -0.0% 76.26 -1.2% 14.89 -0.6%

8.16 -1.6% 15.17 -1.4% 90 -0.3% 44.87 -1.4%15 -5.9%

21.41 -0.2% 3.80 -1.2% 23.33 -1.3% 42.30 -0.2% 18.06 -1.4% 39.00 -0.3% 38.55 -0.1% 4.74 -0.6% 33.90 -0.2% 59 -0.8%

37.52 -2.0% 00 -2.2% 20.60 -0.4% K 17.39 -1.6% 17 -2.6% U

AEM 55.98 -2.3% 17.75 -1.4% 6.22 -0.3%9.97 -2.4% 8.98 -0.4%

PBN 26.55 -1.3% 12.20 -1.7% 12.26 -1.9% 20.00 -1.4% 13.46 -3.1% 21.57 -0.0% 6.21 -0.1% .57 -7.1% 14.96 -1.0%

20.47 -0.6% 19.65 -3.6% WEW

25 -0.8% 11.12 -1.1% 9.90 -0.6% 13.27 -0.3% 8.62 -1.9% 29.20 -3.4% 19.97 -0.5%

25 -0.5% 28.85 -0.0%33 -2.2% 13.66 -0.2% VNP 5.28 -0.1%

45 -0.7% 13.66 -2.4% 60 -1.1% 33.08 -0.5%23 -2.9%88 -8.7% 9.95 -0.5%

5.83 -3.6% 23.26 -0.5% 18 -0.5% 18.60 -0.6% 15.52 -0.5% 7.29 -2.6% 1.76 -1.6%

82 -0.2% 48 -1.1% 5.16 -0.9%

9.01 -1.8% 27.85 -1.1%59 -1.1%

71 -0.3% 85 -1.2% 11.87 -1.4%20 -3.0%

3.50 -2.5% 49 -4.1% 6.54 -2.2% SC 16.27 -0.1% 25.79 -0.2%86 -1.2% 31 -0.7% 48.73 -0.7%

16.99 -0.1% 00 -2.5% 9.15 -0.8% 50.71 -0.5% 40.70 -2.1%C C- 37.46 -1.4%

02 -0.2% 70.24 -0.7% 22.58 -0.3% 24.51 -2.7% 13.36 -1.4% 1.90 -1.5% 69.38 -0.4% 41.70 -0.5% 21.23 -0.3% 18.68 -0.3%

80 -0.6% CNJ 4.11 -4.4% 13.27 -0.4%41 -11.9% 51.24 -0.5% 17.29 -0.5%

5.28 -1.4%74 -0.6% 42 -2.4% 9.49 -0.1%89 -0.7% 19 -2.5% 10 -3.1% RPG L 2.97 -1.6%

69 -4.1% 40 -0.1% 10.69 -0.5%01 -1.9% .67 -4.0% .90 -2.8% 6.20 -1.1%

SEO 68 -1.8% 3.41 -4.2% 55 -0.8% MXY 1.44 -2.0% 25.95 -1.4%05 -1.6% 17 -1.6% 40 -1.4% 21.97 -1.0%

46 -0.3% SSO 17.75 -0.9% TTH 44.90 -4.4%95 -0.7% 50 -4.8% 50.76 -0.3% 39 -4.5%

1.45 -0.6% AEZ 0.82 -1.2% 38 -0.8% 4.43 -2.6%

11.81 -1.0% 15.97 -0.8%

24.84 -0.4% 4.91 -0.8% 07 -0.3%

49 -5.0% 14.53 -0.9% 30.14 -0.5% 10.30 -0.9%13 -0.8% 11.44 -0.5%

34 -1.0% 10.75 -1.3% BA-U 25.70 -0.1% 3.65 -3.9% 39.05 -0.6% 09 -0.9% MBT 22.78 -1.8%

16.89 -0.3%25 -0.2%

MX BBD/B 6.11 1.8% MG/A H 63.65 0.5% XIT XFN 23.70 0.0%ESI 14. POT CAE H 9.97 0.8% LNR 19.13 0.7% OTC RY 59.75 0.5%TDG 7.07 1.7% AGU RNO 6. MRE 8.96 0.6% MN 3. TD 76.05 0.6%SVY 6.98 0.0% CCL/B VIC-U 16.29 1.4% WPT 16.85 0.4% BNS 51.27 0.3%TCW 13.33 0.5% CAS 8.38 0.7% WFI H 28.22 0.0% BLD 2. MMC 0.24 6.6% BMO 61.90 0.2%SCL/A TCK/B H 44.17 2.2% SNC AZD 0.25 0.0% GIB/A 15.20 0.0% CM MTL 16.41 1.4% IVN ARE 2.01 0.5% MTK NA CFW 21. FM GNV-U 28.04 0.8% DII/B 33.26 0.7% CTY 18.27 0.6% CWB 24.25 0.0%PSI 11. IMN BDT-U 31.62 0.7% GIL MDA 37.78 0.3% LB FES 12. LUN H 5.23 3.5% KHD US GC 7. CSU H 43.74 2.0% MIC 27.14 0.8%TESO US 11.44 2.4% EQN 3.85 1.5% CUQ 19.80 0.5% THI DSG HCG SU 32.90 2.9% S SDC 14.10 1.6% MTY 9.50 0.0% CMG 17.00 0.2% ETC 24.47 0.9%

39.16 0.4% HBM 12. CSIQ US 25.07 5.3% BPF-U ESL 7.80 2.4% FN-U SE 28.26 0.4% TCM 13.98 1.1% TIH PZA-U 7.38 0.2% ENA 0.58 3.5% MKP VE 26.22 2.6% QUA 15. NFI-U 11.07 0.4% AW-U MKX FC-U

IOC US 65.08 1.7% FNX AFN 36.74 0.8% KEG-U RKN H 1.65 8.5% HEQ 7.PVE-U 7.77 1.0% WTN H 6.16 0.6% ATA 7.22 0.1% CWI-U 5. TWT 3.35 0.0% DHF-U 17.75 0.8%CLL NDM 9.47 0.3% ARF-U 21.49 0.3% AER 10.71 1.0% ABT 5. OCX H 28.74 0.3%CNQ 73.80 0.4% TKO 5. WJX-U MDZ/A BWC 9. 29.76 1.9%ECA 31.31 1.0% ORA 3. GLV/A ACM/A AXX 1. QC 1.31 0.7%TLM MDI 25.51 0.2% FTT 18.35 0.3% CJR/B RIM CSF COS-U 30.11 2.7% GCE SPB 14.20 0.4% TVA/B AAH 31. IGM NXY 25.26 0.8% CTQ 8.18 0.4% RUS H 20.18 1.0% SJR/B 20.29 0.6% DWI 9. CIX 21.50 0.8%PWT-U AVM RCH CCA WIN 2.87 2.8% AGF/B CPG ABX CWX CGO SW 8. DC/A 13.76 1.4%UPL US 47.05 0.8% G CVL 13.45 0.3% CGX-U H 20.28 0.1% CDV 3. SII 4.13 0.9%AET-U TCL/A 13.60 0.2% IMX H 18.39 1.8% RCM 19. 5.92 0.3%PBG 55.46 0.6% BIN LGF US SVC 1.95 1.5% GS 22.15 1.6%NKO 107.50 1.0% YRI NAL FMN 1.65 0.0% VCM 6.55 0.0% PNP 1.82 1.6%

ELD MLX TRI 36.88 0.5% EXF 6.63 2.1% GCG/A 8.09 3.4%PRE IMG RBA US YLO-U TZT 1 DW ERF-U 23.84 0.5% RBI BDI QBR/B 35.07 0.0% 0.58 0.0% GMP 14.31 0.7%BTE-U 34.55 0.8% FNV 27. GW TS/B ET 14.35 1.7% CF 11.11 0.2%PGF-U H 11.83 1.8% CG MSI-U 10.42 0.7% GVC 2.25 1.3% PUR 4.60 0.0% WES 3.35 2.4%BNP-U 23.55 0.1% OSK STN 26.22 1.6% UNS CTW/S 2.00 0.0% MFC PMG H 34.10 0.0% IGT 110. IBG-U 14.70 1.3% SCC 29.11 0.6% MT 4.61 0.0% GWO VET-U 35.58 0.6% NGD 4. WJA CTC/A 55.35 0.4% PWF 33.69 0.5%PRQ 11. AGI TRZ/B 12. DOL 22.05 0.6% DSA 8.50 1.1% SLF DAY-U 10.57 0.0% GBU 4. JAZ-U 4.51 0.2% RET/A H 17.93 7.8% CLS 11.39 0.4% POW 30.80 0.0%NAE-U 12.90 1.1% GAM 7. AC/B H 2.22 1.8% CTU/A 13.80 0.6% SO IAG 34.72 0.3%PEY-U 13.69 2.0% SMF CNR H 62.13 0.6% GLN 15.20 0.3% MSD FFH 372.BNK 9.28 0.5% DGC CP 57.00 0.7% RON GND H 6.60 0.0% IFC H 44.56 0.4%POU 16.50 2.1% NG TFI 9.96 1.3% FGL 14.36 0.0% ZL XRE 12.10 0.0%NVA 11. XGD 19. STB IDG 17.90 0.0% HR-U 16.83 0.7%

AAV 7.09 0.1% EGU 6.75 0.4% CSS LNF H 12.57 1.3% Utilities REF-U UTS 2.50 0.0% LSG 2. WTE-U 16.55 1.4% GBT/A 35.65 0.0% Symbol H/L Last %Chg CUF-U 19.24 0.5%

BIR 8. RMX 3. Health Care Consumer Staples FTS 29.02 0.0% CRR-U CR 17.44 0.3% SGR 3. Symbol H/L Last %Chg Symbol H/L Last %Chg EMA 24.68 0.1% AP-U 20.65 0.7%TNP JAG 9. IM 43.66 0.1% GZM-U D-U IE 3.44 0.0% GSC 3. EKO 1. PJC/A 9.93 0.0% CU WRK-U 15.15 0.6%FRU-U NGX 3. FMD-U GCL 12.24 0.0% ACO/X BEI-U CLT 19.63 0.8% SEA 25.50 1.9% L U 12.79 1.5% L JE-U 14.30 0.0% CAR-U 14.65 0.6%QEC 4. VEN 9.45 1.6% DR-U 10.89 0.3% WN TA NPR-U LEG R SXC MRU/A BRC-U REI-U TET 8.63 0.2% ARZ 4. ATD/B 18.60 0.3% NPI-U CWT-U 21.55 0.2%PXX 2.70 2.6% CRU 0. TH 5.15 0.0% EMP/A CPA-U 18.01 0.1% PMZ-U BNE 36.87 0.1% JIN H 5.08 3.8% QLT NWF-U 18.26 1.1% ATP 12.69 0.1% MRT-U H 13.87 0.0%PMT-U 4. MFL 9. BU LIQ-U 17.37 0.1% CPX 22.64 0.1% AX-U 11.53 0.3%GO 6. XRC 6. ONC 3. BR-U H 17.00 0.0% CSH-U 7.45 0.6%CMF 7.85 1.2% HRG 0. HBP 2.74 1.4% CDL/A 15. AQN 4.53 1.1% EXE-U OPC 2. GBG 1 RVX H 8.00 13.6% BCB 7 BLX 10.50 0.5% INN-U

10.46 2.3% SLW 15. NYMX US VT 9. BAM/A KEY-U H 27.02 1.2% PAA 23. YM 1. ABC 1. IEF-U 12.10 0.0% FCR PKI-U 11. 2.66 0.0% SAP 29.55 0.5% MPT-U 7.27 1.2% MRC TRP 37.33 0.6% SVM 6. MDG 0. CBY PCC 3. BPP 19.25 0.0%ENB 48.90 0.3% ELR MFI 10. BPT-U PRK 5.59 1.4%

IPL-U HW 10.45 3.7% BVF H 17.17 0.0% AGT 32.90 1.2% Telecom Services BPO PIF-U 17.50 0.8% PPN 1.37 1.4% PLB RSI-U Symbol H/L Last %Chg MIM/A 13.FCE-U H 10.84 0.3% GNA 7.84 0.2% COM H 6.74 0.1% BXI 1.89 0.5% PIX 1.10 0.9% KMP 8.30 0.4%ALA-U 18.45 0.2% CLM H 9.69 5.1% DDS 1. PBH BCE MEQ CCO 28.00 0.2% LIF-U H 51.99 4.8% ANP 1. SOY 4.28 0.9% T H 37.84 0.2% MRD SGQ 16. TRE 19.56 2.6% NRI 0.25 2.0% HLF GDC UUU 2.80 3.3% WFT MDS 8. AG-U 2.84 3.2% 31.73 0.0% FSV DML 1.49 2.7% CFP 9.50 1.4% PTI 2.53 0.0% ATB WRX 0.91 2.2% AIF-U 14.49 0.5%XEG 18.00 1.1% NBD 16. GLG 7.60 2.4% RCI/B 34.75 0.4% BRE-U 13.00 0.0%

H/L = at a new closing 52- wk High/Low; / = within 10% of the 52- wk High/Low; Blue = S&P/TSX 60 member, Italics = ETF, Bold = move of more than 5%


Market Elements

Earnings Expected Next Session

Company Ticker Country Sector Industry MktCap Period TimeTransAtlantic Petroleum Corp. TNP CN Canada Energy OG E&P 1,090 Q4Result Energy Inc RTE CN Canada Energy OG E&P 350 Q4Sterling Resources Ltd SLG CN Canada Energy OG E&P 300 Q4Shamaran Capital Inc. SNM CN Canada Energy OG E&P 290 Q4Pan Orient Energy Corp POE CN Canada Energy OG E&P 260 Q4Avenir Diversified Income Trust AVF.UN CN Canada Energy OG E&P 240 Q4CGX Energy Inc OYL CN Canada Energy OG E&P 210 Q4

Ivanhoe Mines Ltd/CA IVN CN Canada Materials DvrsMng 7,280 Q4Northern Dynasty Minerals NDM CN Canada Materials DvrsMng 860 Q4Mercator Minerals Ltd. ML CN Canada Materials DvrsMng 500 Q4Polymet Mining Corp POM CN Canada Materials DvrsMng 340 Q4Continental Minerals Corp KMK CN Canada Materials DvrsMng 320 Q4Minera Andes Inc MAI CN Canada Materials DvrsMng 250 Q4Duluth Metals Ltd DM CN Canada Materials DvrsMng 200 Q4

Crew Gold Corp CRU CN Canada Materials Gold 960 Q4Rubicon Minerals Corp RMX CN Canada Materials Gold 810 Q4Jinshan Gold Mines Inc JIN CN Canada Materials Gold 800 Q4Romarco Minerals Inc R CN Canada Materials Gold 720 Q4High River Gold Mines Ltd HRG CN Canada Materials Gold 560 Q4Crocodile Gold Corp CRK CN Canada Materials Gold 270 Q4Eastern Platinum Ltd. ELR CN Canada Materials PrecMet 970 Q4 Bef-mktHarry Winston Diamond Corp HW CN Canada Materials PrecMet 760 Q4 Aft-mktImperial Metals Corp III CN Canada Materials PrecMet 670 Q4Chesapeake Gold Corp CKG CN Canada Materials PrecMet 310 Q4Anooraq Resources Corp ARQ CN Canada Materials PrecMet 290 Q4ECU Silver Mining Inc ECU CN Canada Materials PrecMet 190 Q4

Garda World Security Corp GW CN Canada Industrials Sec&Alm 350 Q4

GLG Life Tech Corporation GLG CN Canada CMR Stap PersPrdct 180 Q4 Bef-mkt

Research In Motion Ltd RIM CN Canada Info Tech ComEquip 42,150 Q4 Aft-mkt

BPZ Resources Inc BPZ US U. S. Energy OG E&P 830 Q4 Bef-mktCNOOC Ltd CEO US Hong Kong Energy OG E&P 74,370 YBumi Resources Tbk PT BUMI IJ Indonesia Energy Coal&Uran 5,020 YMosiac Co MOS US U. S. Materials Fert&Ag 26,810 Q3 Aft-mktChina Agritech Inc CAGC US U. S. Materials Fert&Ag 470 Q4 Bef-mktUralkaliy URKA LI Russia Materials Fert&Ag 8,820 YCytec Industries Inc CYT US U. S. Materials SpecChm 2,310 Q1Schulman A Inc SHLM US U. S. Materials SpecChm 670 Q2 Aft-mkt

Mirabela Nickel Ltd MBN AU Australia Materials DvrsMng 780 Y

Schnitzer Steel Industries SCHN US U. S. Materials Steel 1,160 Q2Evraz Group SA EVR LI Luxembourg Materials Steel 18,160 YAcuity Brands Inc AYI US U. S. Industrials ElcCmpEq 1,820 Q2SMA Solar Technology AG S92 GR Germany Industrials ElcCmpEq 4,340 YRoth & Rau AG R8R GR Germany Industrials ElcCmpEq 520 YA-Power Energy Generation Systems Ltd APWR US Virgin Islands British Industrials HvyElcEq 540 Q4 Bef-mktBeijing Enterprises Holdings Ltd 392 HK Hong Kong Industrials IndCongl 7,680 YShanghai Industrial Holdings Ltd 363 HK Hong Kong Industrials IndCongl 5,170 YLindsay Manufacturing Co LNN US U. S. Industrials CnstFmM 520 Q2 Bef-mktSmartHeat, Inc. HEAT US U. S. Industrials Ind Mach 390 Q4 07:00RINO International Corp RINO US U. S. Industrials EnvionServ 590 Q4 Aft-mkt

Resources Connection Inc RECN US U. S. Industrials RsrcCslt 890 Q3 Aft-mktGFK SE GFK GR Germany Industrials RsrcCslt 1,310 Y 10:00China Merchants Holdings International Co 144 HK Hong Kong Industrials MarineSrv 9,140 YHamburger Hafen und Logistik AG HHFA GR Germany Industrials MarineSrv 2,890 YUnifirst Corp/MA UNF US U. S. CMR Disc Aprl&Gds 770 Q2 Bef-mktDelta Dunia Makmur Tbk PT DOID IJ Indonesia CMR Disc Aprl&Gds 730 YRetail Ventures Inc RVI US U. S. CMR Disc DeptStrs 470 Q4Dollar General Corp DG US U. S. CMR Disc GMrchStrs 8,630 Q4Rite Aid Corp RAD US U. S. CMR Stap DrugRetail 1,540 Q4

Angiodynamics Inc ANGO US U. S. Hlth Care HCEquip 390 Q3 Aft-mktImmucor Inc BLUD US U. S. Hlth Care HCSuppls 1,540 Q3 Aft-mktSpectrum Pharmaceuticals Inc SPPI US U. S. Hlth Care Biotech 230 Q4Cypress Bioscience Inc CYPB US U. S. Hlth Care Pharma 190 Q4Vienna Insurance Group VIG AV Austria Financials Multi-LnIns 6,870 YGlobal Payments Inc GPN US U. S. Info Tech DataProc 3,740 Q3 Aft-mktDemandTec Inc DMAN US U. S. Info Tech SystmSwr 200 Q4 Aft-mkt

Xyratex Ltd XRTX US Bermuda Info Tech PCStor&P 480 Q1Micron Technology Inc MU US U. S. Info Tech Semi 9,040 Q2Richtek Technology Corp 6286 TT Taiwan Info Tech Semi 1,480 YXinao Gas Holdings Ltd 2688 HK Cayman Utilities GasUtil 2,710 YTheolia SA TEO FP France Utilities IPPTrad 170 Y

Red = Canadian incorporated, Blue = U.S. incorporated, Highlighted = S&P Global 1200 Index member


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Please refer to pages 5-6 for Disclosure Statements.

Economic Research

March 31, 2010 Research Comment Dr. Sherry Cooper (800) 613-0205 Douglas Porter (416) 359-4887 Jennifer Lee (416) 359-4092

A.M. Notes

Dr. Sherry Cooper, Chief Economist [email protected]

416-359-4112

CANADA – Douglas Porter On deck today: The one indicator that matters in Canada this week is monthly real GDP for January, and it’s out at 8:30 this morning. We and the consensus are looking for a solid 0.5% m/m gain, which happens to match the average increase over the prior four months. In the event, that would mean the Canadian economy has powered ahead at roughly a 6% annualized clip since last September. By any metric, that is a robust recovery, if it can be sustained for any length of time. By the way, the early read on February GDP looks good too---employment was strong (+60k full-time jobs), housing starts rose again (+6% m/m, and +70% y/y), and auto sales rocked (+25% y/y). If we get what we think we’re going to get on GDP today, the BoC’s forecast of 3.5% growth for Q1 is fading into the sunset (we’re at +4.7% and that is looking light). However, we would add that the BoC then saw the economy perking up to a 4%+ clip through the rest of this year, so it’s not like they were bears on the growth outlook. StatsCan will also release its “other” employment report today, the survey of payrolls and hours (similar to the establishment survey). Since it’s for January, and the U.S. is releasing its March payroll survey on Friday, you can appreciate why it’s not a gripper for the markets. Despite that wee timeliness issue, it still does act as a fact-check for the Labour Force Survey. It has spun out consistent gains in the past four months, averaging 21,000, while the LFS reported average gains of 15k in that time (with two big up months, and two down). The LFS reported a job gain of 43,000 in January. Provies: Quebec unveiled its 2010 budget yesterday afternoon. The Province expects the deficit to widen slightly to $4.5 billion, from a downwardly revised estimate of $4.3 billion in the fiscal year ending today. Borrowing requirements in the coming year will total almost $13 billion, versus $15.5 bln in FY09/10. Quebec unveiled a number of revenue measures as well as spending restraint to aim for a balanced budget within five years. Notably, the provincial sales tax rate will now climb another percentage point at the start of 2012 to 9.5%, on top of the planned 1 point rise at the start of 2011. There will also be a dedicated health care tax (rising to $200/adult by 2012), and a 1-cent per-year increase in fuel taxes. Robert Kavcic’s full write-up was circulated yesterday evening and will be on our website this morning. Last day of Q1: With just one session to go in March, it looks like it will be a solid month for the TSX and the Canadian dollar, with both up just a little more than 3% to this point. That puts the C$ close to the top of the global leader board (also on a year-to-date basis), while the TSX has trailed a bit behind most other major markets this month (the S&P 500 is up 6.2% in March, the fourth best month in the past five years). But the big story in Canadian markets this month has arguably been the sell-off at the short end of the bond market, which has seen the 2-year GoC bond yield vault up 47 bps since the end of February. A relentless wave of stronger-than-expected domestic data has driven the sell-off, with today’s GDP report primed to pile on.

mailto:[email protected]

Sector Comment Economic Research

Did it seem like a long month? Today is the 23rd working day of March. Little-known factoid: March is the only month of the year that can possibly have as many as 23 working days, and it only happens when the month starts on a Monday, Tuesday, or Wednesday, and only when Good Friday is in April. In other words, in a typical decade, maybe 4 months out of 120 will have 23 work days. So, yes, perhaps it did seem like a long month---to give you a sense how long, the first day of March was the day after Canada 3 USA 2 (OT). From the other headlines: “Athabasca Oil Sands Corp. will make a $1.35-billion debut on the Toronto Stock Exchange next week, among the largest Canadian initial public offerings ever. The offering is almost twice as large as expected when it was announced earlier this year, owing largely to strong interest from Asian institutional investors based on the endorsement of Athabasca's major backer, PetroChina Co. Ltd. Athabasca will price the offer at $18 a share, which is at the top end of estimates.” Globe and Mail (Link to Article) “The head of National Bank of Canada says the industry watchdog is standing in the way of higher dividends, making him the first senior banker to speak out against what has become a growing concern for many investors. Since the financial crisis, the Office of the Superintendent of Financial Institutions has been warning banks and insurance companies not to do anything to jeopardize capital levels, such as boosting dividends or launching major acquisitions until regulators worldwide can agree on a new set of rules for the industry. But after last year's near-record bank profits, many investors are growing impatient with OSFI.” National Post (Link to Article) “Some of the world's biggest miners are forcing Asian buyers to change the way they purchase several key commodities, a boon to producers but a move expected to increase prices throughout the global economy. From potash to coking coal and now iron ore, several mining companies have pushed through dramatic changes in how these products are priced and sold, forcing users in countries such as China, Japan and India to pay more for specific resources. The latest move came Tuesday when BHP Billiton Ltd. announced it was no longer negotiating annual iron ore contracts with a “significant” number of Asian customers and will instead set prices on a short-term basis.” Globe and Mail (Link to Article) “Honda plans to restart a second shift and add more than 400 jobs at one of its Alliston assembly operations early next year because of improving demand for some models. Honda of Canada Manufacturing, the country's fourth biggest automaker, confirmed Tuesday it will gradually hire new workers and recall some "contract associates" this summer for additional production at its No. 2 plant.” Toronto Star (Link to Article)

UNITED STATES – Jennifer Lee The anticipation ahead of this Friday’s nonfarm payroll report is building. The various jobs measures seen recently have supported the view that the worst of the job cuts are behind us and that the jobless rate has appeared to have peaked. See my AM Charts for what has been noted so far over the past five days….the continued decline in the # of Americans apply for unemployment benefits, the # of Americans who remain on unemployment insurance, and a survey of 5,000 households on how they view the job market (Plentiful? Not so plentiful? Hard to get?). They suggest that the unemployment rate has peaked, although, as Chairman Bernanke reminded us last week in his testimony to the House Financial Services committee, the “employment situation is very weak”, and rampant joblessness is a “tremendous social and economic problem in the United States today". He also noted the adverse impact of long-term


http://www.theglobeandmail.com/globe-investor/athabasca-ipo-raising-135-billion/article1517800/

http://www.financialpost.com/news-sectors/financials/story.html?id=2744077

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/miners-making-big-changes-to-pricing-system/article1517801/

http://www.wheels.ca/article/785190



unemployment, which has risen sharply over the past year...“If you’re out of work for six months or a year, then you begin to lose your skills…You begin to become very unattractive to employers, and it’s clearly a long-term negative and not just a short- term negative.” In any event, the ADP national employment report on private sector payrolls is out at 8:15 am ET and will be eyed warily since it won’t be distorted by the government’s census hiring. Its reported 20k payrolls drop in February nearly matched the BLS’ reported 18k drop in private sector payrolls during the same month, the smallest gap in well over two years. Of perhaps more interest will be the breakdown of the results……between small (still cutting), medium (now hiring) and large-sized (still cutting) firms, and between goods-producers, service-providers, and manufacturing. The manufacturing portion of the ADP’s survey showed a 3k increase in jobs in February, the first since the recession began. This is one sector (albeit a smaller part of the U.S. economy) that is helping drive the recovery, and we should see more evidence of that mid-morning, with the release of the Chicago PMI and factory orders. Backgrounders: “Bonds Cap Epic Comeback: Investors flooded risky companies with money in March even as the government prepares to shut down a key engine driving one of the greatest corporate-bond rallies in history. A total $31.5 billion in new high-yield debt, otherwise known as junk bonds, hit the market through Tuesday, exceeding the previous monthly record in November 2006. Partly propelling the activity: The Federal Reserve's massive mortgage-buying program, which comes to an end Wednesday. By buying $1.25 trillion of mortgage securities, the Fed absorbed a flood of assets that otherwise would have needed buyers. That kept money in the hands of investors, who went searching for something else to buy. The Fed's underpinning encouraged investors to seek riskier, higher-yielding securities. A natural choice: corporate bonds.” Wall Street Journal, page A1 “Obama to Open Offshore Areas to Oil Drilling for First Time: The Obama administration is proposing to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time, officials said Tuesday. The proposal — a compromise that will please oil companies and domestic drilling advocates but anger some residents of affected states and many environmental organizations — would end a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean. Under the plan, the coastline from New Jersey northward would remain closed to all oil and gas activity. So would the Pacific Coast, from Mexico to the Canadian border.” New York Times, page A1

OVERSEAS – Jennifer Lee So ahead of the North American open, European bourses are trading tentatively higher while Asia finished the session in the red. News of Ireland’s banks needing more capital ($43 bln) in what Ireland’s FM describes as beating “our worst fears” thanks to the banking sector making “appalling lending decisions that will cost the taxpayer dearly for years to come” is adding to the uncertainty. Plus, almost all of the economic data released overnight failed to match expectations…..some good, some bad…and that is throwing some uncertainty into the mindset.



In Europe, there was a number of better-than-expected jobs-related data out morning. German unemployment actually fell in March, with the 31k decline the fourth in a row (consensus had expected an 8k increase), which helped trim the jobless rate a tick to 8.0%, the lowest in just over a year. In Italy, the jobless rate also unexpectedly fell a tick to 8.5% in February, while for the Euro region as a whole, the rate of joblessness rose 0.1 pts to a 12-year high of 10.0% in February. So with high unemployment for the region as a whole, price pressures should remain muted, although that didn’t happen in February. Thanks to higher oil costs, consumer prices in the Eurozone jumped from 0.9% y/y in February to 1.5% y/y in March, the quickest pace in over a year. This is a little surprising, despite the above-expected read in German CPI earlier this week, and for Italy, and is helping give the EUR a lift this morning. The AUD, on the other hand, had some of the wind knocked out of it after some very disappointing data from Australia showed that the RBA’s rate hikes are having some effect. Retail sales unexpectedly fell in February, with the 1.4% decline the first since December and the largest in a year. Building approvals also tumbled in February for the second month in a row, down 3.3% on the heels of January’s (upwardly revised) 5.5% decline. All in, these will cement the view that although the RBA remains in tightening mode (emphasized by the recent hawkish commentary coming from RBA officials), higher rates will only come every other month or so. Overnight Ranges: CAD $1.0198-to-$1.0152; EUR $1.3480-to-$1.3385; GBP $1.5178-to-$1.5045; JPY ¥93.59-to-¥92.76; AUD $0.9206-to-$0.9198; CNY 6.8259

AM CHARTS • RecoVery in Canada • The Long & Winding Road To Auto Recovery • U.S. House Prices Are Rising, No Falling, No… • Same Trend in Various Job Measures ON THE WEB: (Link to Charts)

http://www.bmonesbittburns.com/economics/amcharts/mar3110.pdf

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IMPORTANT DISCLOSURES Analyst's Certification As to each company covered in this report, each analyst hereby certifies that the views expressed accurately reflect the analyst’s personal views about the subject securities or issuers. Each analyst also certifies that no part of the analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients. Company Specific Disclosures For Important Disclosures on the stocks discussed in this report, please go to http://researchglobal.bmocapitalmarkets.com/Company_Disclosure_Public.asp Distribution of Ratings (Dec. 31, 2009)

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