MORNING NEWS CALL REUTERS Canada Edition Wednesday, October 18, 2017

TOP NEWS • Boeing says Bombardier CSeries jets may face hefty duties despite Airbus deal Boeing said on Tuesday that Bombardier's CSeries jets could still be hit with high U.S. import duties, even if they are assembled in Alabama through an industry-changing deal with Airbus. • CP Rail beats 3rd-qtr profit estimates on higher shipments Railroad operator Canadian Pacific Railway on Tuesday reported a better-than-expected quarterly profit on higher shipments of crude oil, coal and potash and raised its full-year profit forecast. • U.S. SEC charges Rio Tinto, former top executives with fraud The U.S. Securities and Exchange Commission on Tuesday charged mining company Rio Tinto and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars. • China's Xi lays out vision for "new era" led by "still stronger" Communist Party Chinese President Xi Jinping laid out a confident vision for a more prosperous nation and its role in the world, stressing the im- portance of wiping out corruption and curbing industrial overcapacity, income inequality and pollution. • Corus Entertainment's profit beats as costs fall Corus Entertainment reported a better-than-expected profit on Wednesday as the media company benefited from cost savings.

BEFORE THE BELL Stock futures pointed to a higher opening for Canada's main stock index as oil prices rose on an expected fall in U.S. inventories and geopolitical tensions around oil-rich Iraq and Iran. The Dow is set to breach its 23,000 mark at open, while other major indexes were slightly higher. A flurry of earnings helped European stocks gain, while Asian markets were little changed after China Presi- dent Xi Jinping kicked off the twice-a-decade party congress with a wide-ranging speech. Gold fell on pressure from a firmer dollar amid speculation that the next U.S. Fed chair may be a policy hawk.

STOCKS TO WATCH

Results • Corus Entertainment Inc (CJRb). Corus Entertainment Inc (CJRb). The company reported a better-than-expected profit as the media company benefited from cost savings. The company's net income attributable to shareholders rose 15.7 percent to C$28.9 million in the fourth quarter ended Aug. 31. Excluding items, Corus earned 22 Canadian cents per share. Analysts on average had expected a profit of 16 Canadian cents. • Canadian Pacific Railway Ltd (CP). The railroad operator on Tuesday reported a better-than-expected quarterly profit on higher shipments of crude oil, coal and potash and raised its full-year profit forecast. The company now expects 2017 adjusted earnings to grow at double-digit percentage. It had previously expected high single-digit percentage growth. CP's net income rose to C$510 million, or C$3.50 per share, in the third quarter ended Sept. 30, from C$347 million, or C$2.34 per share, a year earlier. Excluding items, the company earned C$2.90 per share, ahead of analysts' average estimate of C$2.87.

In Other News • Bombardier Inc (BBDb). Boeing said on Tuesday that the company's CSeries jets could still be hit with high U.S. import duties, even if they are assembled in Alabama through an industry-changing deal with Airbus. Boeing said that the announced deal has no effect on the pending U.S. Department of Commerce proceedings. "Any duties finally levied against the C-Series... will have to be paid on any imported C-Series airplane or part, or it will not be permitted into the country," Michael Luttig, Boeing's general counsel, said in a statement. Bombardier's strategy of performing final assembly in Alabama might allow the CSeries to avoid duties because the trade case targets partially and fully-assembled aircraft, said U.S. international trade lawyer William Perry. Bombardier and Airbus could argue they are importing parts, like the wing from Northern Ireland, to be assembled in the United States. "That may be the loophole Bombardier is hoping to use," he said by phone. MORNING NEWS CALL - CANADIAN EDITION October 18, 2017

• TMX Group Ltd (X). Canada's central bank, the Toronto Stock Exchange operator and Payments Canada said on Tuesday they will collaborate to test the use of blockchain technology for automating the securities settlement process. The three organizations said they would develop an experimental integrated securities and payment settlement platform using a distributed ledger, the same technology that underpins cryptocurrencies like bitcoin. The new phase will test the technology's ability to settle multiple assets on the same ledger.

INSIGHT Canada's oil sands survive, but can't thrive in a $50 oil world Canada's oil sands producers are stuck in a rut. The nation's oil firms are retrenching, with large producers planning little or no further expansion and some smaller projects struggling even to cover their operating costs.

ANALYSTS' RECOMMENDATION • Canadian Pacific Railway Ltd (CP). National Bank of Canada raises target price to C$226 from C$207 following its Q3 results that were ahead of their estimates. • GDI Integrated Facility Services Inc (GDI). Desjardins initiates coverage with buy rating, viewing the company’s scale and full range of facility services in Canada as key positive attributes that should strengthen its already solid relationships with commercial property owners.

ECONOMIC EVENTS 0830 Manufacturing sales mm for Aug: Expected -0.1 pct; Prior -2.6 pct

COMPANIES REPORTING RESULTS Oct 18: Corus Entertainment Inc (CJRb). Expected Q4 earnings of 16 Canadian cents per share

Oct 19: AltaGas Ltd (ALA). Expected Q3 earnings of 19 Canadian cents per share Rogers Communications Inc (RCIb). Expected Q3 earnings of C$1.00 per share theScore Inc (SCR). Expected Q4 loss of 1 Canadian cent per share

CORPORATE EVENTS 08:00 Corus Entertainment Inc (CJRb). Q4 earnings conference call 16:30 Kinder Morgan Canada Ltd (KML). Q3 earnings conference call

EXDIVIDENDS Richelieu Hardware Ltd (RCH). Amount C$0.06

(All analysts' estimates are according to Thomson Reuters I/B/E/S)

2 MORNING NEWS CALL - CANADIAN EDITION October 18, 2017

PICTURE OF THE DAY

Mykh, a 1.5-year-old great gray owl, flies through a window during a training session which is a part of Royev Ruchey Zoo's programme of taming wild animals for research, education and interaction with visitors, in a suburb of the Siberian city of Krasnoyarsk, Russia October 17. REUTERS/Ilya Naymushin

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