B1TIMES COLONIST, VICTORIA, B.C. TUESDAY, AUGUST 25, 2015

BUSINESSEditor: Darron Kloster > Telephone: 250-380-5235 > Email: dkloster@timescolonist.com timescolonist.com/business ■ MARKETS, B2

Trader John Santiago frantically works the floor of the New York Stock Exchange. North American mar-kets plunged in early trading following a big drop in Chinese stocks. RICHARD DREW, THE ASSOCIATED PRESS

ALEXANDRA POSADZKIand BRIAN MCKENNAThe Canadian Press

The continuing rout on China’smain market prompted a world-wide sell-off Monday that sentNorth American markets into atailspin from which they only par-tially recovered.

The benchmark S&P/TSXindex fell 768 points or 5.7 percent in early trading, then ralliedstrongly before sliding again.Canada’s main index finished theday at 13,052.74 points — down420.93 points from Friday’s close.Every sector of the Torontoexchange closed lower, withglobal gold leading the way withan almost seven per cent decline.

It was the same story in NewYork, where the Dow Jones indus-trial average lost a breathtaking1,000 points shortly after the openbefore regaining much of thatground, then faltering again toclose down 588.40 points at15,871.35. The S&P 500 index wasdown 77.68 points at 1,893.21 andthe Nasdaq plunged 179.79 pointsto 4,526.25.

“Obviously, there was a rush toget out the door and too manypeople trying to get out at thesame time,” says Conrad Dabiet, asenior portfolio manager at Man-ulife Asset Management.

Dabiet said Monday’s marketaction reminded him of the flashcrash that occurred on May 6,2010, where U.S. markets droppedsharply — with computer algo-rithms and high-frequency trad-ing worsening the losses — beforequickly rebounding. “It certainlyfelt like that again,” Dabiet said.

Dabiet said it’s hard to predictwhich way the markets will gotoday — and whether Monday’sdramatic plunge, as well as lastweek’s losses, could be the start ofa protracted bear market.

“I have no idea,” Dabiet said. “Icertainly hope things come back,but we’ve had a market that’s runfor a long time here.”

The Canadian dollar wasamong the currencies tradinglower as the price of many of itsnatural resources fell amid con-cerns about the strength ofChina’s economy, the world’s sec-ond-largest. The loonie fell 0.54 ofa U.S. cent to $75.40 cents US —its lowest close since August 2004.

On commodity markets, thebenchmark crude oil price closedbelow the $40 a barrel mark forthe first time since February2009. The October contract forWTI crude closed down $2.21 at$38.24 a barrel.

September natural gas was offthree cents at $2.65 per thousandcubic feet, December gold was

down $6 at US$1,153.60 an ounceand September copper fell fivecents to US$2.26 a pound.

China’s largest stock market,the Shanghai composite index, fell8.5 per cent to close at 3,209.91points, its biggest one-day losssince an 8.8 per cent decline onFeb. 27, 2007. That had a majorspillover effect in Europe, whereGermany’s DAX fell five per cent,the CAC-40 in France slid 5.6 percent and Britain’s FTSE 100dropped 4.5 per cent.

Underlying the gloom in Chinais the growing conviction that pol-icy-makers and regulators maylack the means to stop the lossesamid an economic slowdown, abanking system short of cash andinvestors pulling money out of thecountry. “There is a lot of fear inthe markets,” said Bernard Aw,market strategist at IG.

The panic has underscored thescale of the challenge for Chineseleaders in seeking to curb excessinvestment and guide the econ-omy toward a more sustainablepace of growth.

“My biggest concern is thatglobal growth momentum is veryfragile,” said Rajiv Biswas, Asia-Pacific chief economist for IHS.“The most important step is to seeChina take further action to try tobring their economy to a sevenper cent growth path.”

Tumbling TSX cuts 420 points,worldwide markets in tailspin

IAN BICKISThe Canadian Press

CALGARY — Commodity prices aretanking and they’re bringingCanadian markets down withthem, but experts say someprovinces will be feeling thepinch more than others.

“It’ll feel like a recessiondepending on where you live,”said John Stephenson, chief exec-utive of hedge fund Stephenson &Co. Capital Management.

He said everything from oil tometals to lean hog prices aredropping as weaker growth glob-ally weighs on demand. “Virtuallyeverything is down in price, andsignificantly down, not just a littlebit,” said Stephenson.

The drop in commoditiesmeans petro-powered provincessuch as Alberta, Saskatchewanand Newfoundland will be espe-cially hard hit, while the manufac-

turing heartland of Ontario andQuebec could get a boost from thelower Canadian dollar, saysRobert Kavcic, senior economistat BMO Capital Markets.

Canada’s energy producers arehurting as the North American oilbenchmark dropped to a freshsix-year low Monday, closing at$38.24 US a barrel. At thoseprices, many producers are losingmoney on every barrel they pumpout of the ground, said Kavcic.

“It’s getting to be a lot tougherin the energy sector now. Youcould actually start to see someproduction scaled back.”

The recent drop in oil priceshas Todd Hirsch, ATB Financial’schief economist, predicting a mildrecession for Alberta this yearand a sluggish recovery next yearafter forecasting in June that theprovince would avoid such an eco-nomic decline. “Since that timethe situation has changed pretty

dramatically,” said Hirsch.He said the fall in oil prices

earlier in the year was just anoversupply issue, but crude isnow also being hit with a potentialdrop in demand as cracks start toshow in China’s growth.

Stephenson said commoditieswill drop further as investorsrealize how slow the Chineseeconomy is actually growing. Heestimates the country is growingat three per cent, compared withthe government figure of sevenper cent.

But while China’s economybegins to waver, the U.S. economyis showing continued strength,with good consumer spending andstrengthening residential con-struction, said Kavcic.

He said the strong U.S. housingmarket has bolstered Canada’slumber industry, which is one ofthe few Canadian commoditiesdoing relatively well.

Commodities deepen Canadian pain

ANDREW A. DUFFYTimes Colonist

The Hudson district in downtownVictoria may be the latest to getin on the rapidly expanding craftbeer industry.

Townline, which developed theHudson, Hudson Mews and is inthe midst of building HudsonWalk, will be holding a publicmeeting early next month togauge the neighbourhood’s inter-est in having a brewpub orbrewer take up space in eitherthe Hudson building, HudsonWalk when completed or a futureproject in the area.

“The application has not beenmade yet. We are waiting for thepublic meeting, but if we’re suc-cessful and the public supports it,we will apply to amend the zon-ing,” said Chris Colbeck, Town-line’s vice-president of sales andmarketing.

If approved, Townline wouldbe able to include breweries,brewpubs and distilleries withinthe Hudson district.

The company is consideringspots either within the existingHudson building, as a comple-ment to the Victoria Public Mar-ket, Hudson Walk, which is cur-rently under construction, orHudson Place, the final piece ofthe district which is still in theplanning stages.

The neighbourhood was noti-fied last week of Townline’s inten-tions.

Colbeck said the idea makesperfect sense for a developmentthat has an established publicmarket and is growing rapidly.

“And there’s been this surge inthe number of brewpubs andmicrobreweries, we see it as agrowing trend,” he said. “And wedefinitely see it as complemen-tary either at the Victoria PublicMarket or in one of the retailspaces in Hudson Walk Phase 1 orPhase 2.”

Victoria, like much of B.C., hasseen an explosion of craft-beeractivity and now boasts six craftbrewers and soon will have sixcraft brewpubs.

Recently, the Downtown Victo-ria Business Association spon-sored the production of a CraftBeer Map, highlighting both thebrewers and taphouses aroundthe region.

Ken Kelly, general manager of

the DVBA, said a brewpub at theHudson sounds like a perfect fit.

“Brewpubs are taking off rightnow, and a brewpub is somethingwith reasonable hours that won’thave a negative impact on theresidents that are there now orthere in the future,” he said. “Andanything that would make theHudson more appealing togreater numbers of people isgood news.”

Kelly said the Hudson districthas brought renewed interest andactivity to what had been a fringearea of the downtown between Fis-gard Street and Caledonia Avenue.“Undeniably, the Hudson has pro-vided stabilization and it is goingto be a strong hub along with[office development] 1515 Douglasand Hudson Walk,” he said. “So itmeans both night time and daytime demand for a brewpub.”

Where a brewer might set upshop within one of the develop-ments in the district, however, isstill up for debate.

Colbeck said it’s too early totell. However, he did note therehas been an offer from a potentialtenant for the 4,900 square feet ofspace in the Hudson that used tohouse Smoken Bones. The BBQrestaurant closed in 2014 aftertwo years.

Colbeck said he couldn’t namethe tenant nor could he confirm ifit was a brewer.

He also said it would comedown to the negotiation with apotential tenant to determine ifTownline would build out a pub orleave that to the tenant.

There is retail space that willbe available in the new HudsonWalk development.

That project offers 3,000square feet with access off Her-ald Street in Phase 1, along with170 units of rental housing, mostof them in a 16-storey tower. Thedate for completion of that proj-ect is fall next year.

Hudson Mews, a 120-unitrental tower near the corner ofBlanshard and Fisgard, has one3,000 square foot space for com-mercial use left, while the Hud-son, apart from the SmokenBones site, has only some smallspaces within the Public Marketavailable.

The public meeting will beheld Sept. 8 at 7 p.m. at the Victo-ria Public Market.aduffy@timescolonist.com

Brewpub planfor downtownHudson districtCraft-beer business considered ‘perfect fit’for development around public market

The Hudson Walk development, right, goes up next to the Hudson,formerly the Hudson’s Bay building. DARREN STONE, TIMES COLONIST

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