Monday, June 5, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Canadian stocks dipped Monday, led by declines in information
technology, financial and resource-related stocks. Higher oil prices sent
U.S. stocks lower, as Iran raised the possibility of supply interruptions
due to its ongoing nuclear stalemate with the West. Meanwhile, comments
from Federal Reserve Chairman Ben Bernanke led investors to believe that
U.S. interest rates will again be on the move upward in June.
* The S&P/TSX Stock Exchange Composite Index slumped 199.20 points, or
1.67%.
* On the U.S. economic front, Federal Reserve Chairman Ben Bernanke,
citing recent inflationary pressures at an international monetary
conference in Washington, vowed to make sure rising energy costs don't add
fuel to the fire and added that the inflation outlook "will receive
particular scrutiny," and policymakers "will be vigilant" to ensure that
the recent uptick in core inflation, "is not sustained."
* In corporate news, commercial real estate firms Brookfield Properties
Corp. and private equity firm The Blackstone Group plan to merge in a
US$4.8 billion deal that will see them join to acquire the shares of Trizec
Properties Inc. and Trizec Canada Inc. Including Trizec debt, the deal is
worth US$8.9 billion.
* Canadian Superior Energy Inc. launched a cash-and-share bid for
Canada Southern Petroleum Ltd. Monday, saying its offer tops the one made
by Petro- Canada last month. Canadian Superior Energy stock rose, while
Canada Southern Petroleum gained on the news.
* Elsewhere, the New York Mercantile Exchange and TSX Group Inc. are
discussing forming an alliance that would create a huge energy trader, a
report said Friday. Dow Jones Newswires reported the Toronto Stock Exchange
and Nymex are considering a deal that would see the TSX acquire a 10% stake
in Nymex. In exchange, the TSX would transfer full control of its
Calgary-based Natural Gas Exchange, valued at about US$150 million.
* Meanwhile, in mining, Agnico-Eagle Mines Ltd. said it will spend
C$135 million to build the Kittila gold mine in Finland, C$90 million to
expand the Lapa gold project in Quebec and C$23 million on expanded
exploration at the Pinos Altos project in Mexico. The Toronto-based miner
said it will raise C$250 million in an equity offering, about the same
amount it plans to spend on the properties. The stock fell on the news.
* In other mining news, Inco Ltd. filed a notice with the U.S. SEC
disclosing that it's in takeover negotiations with other potential buyers.
Inco said its board of directors "is undertaking negotiations" with the
unidentified bidders in response to a takeover offer from Teck Cominco Ltd.
last month, and described negotiations as a "customary" part of the board's
commitment to shareholder value. The company also said it has entered into
confidentiality and standstill "arrangements" with the aspiring buyers
whereby they agree not to acquire Inco shares in exchange for access to
confidential company information.
* In commodities, oil prices closed at US$72.60 a barrel, after topping
US$73 earlier in the session, on news Iran's leader threatened to disrupt
the world's oil supply if the West punishes Tehran over its nuclear
program. Over the weekend, Iran's supreme leader Ayatollah Ali Khamenei,
who has the final say on all state matters, told Western countries in a
speech that "if you make any mistake, definitely shipment of energy from
this region will be seriously jeopardized." Meanwhile, the concerns led
investors to invest in safe-haven entities, which drove gold prices up by
more than US$7.70 an ounce.
-- Michael.O'Brien@contractor.Thomson.com; Thomson Financial Corporate
Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
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SOURCE Thomson Financial Corporate Group
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