Monday, July 31, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): A flat GDP figure symbolized the state of the TSX today, as
mixed earnings news and good long-term investments failed to generate
excitement. Brookfield Properties and Maple Leaf Foods missed expectations
while Glamis Gold nearly tripled last year's profit. Bay Street overall,
however, is expected to be quiet this week as the markets await employment
data from Canada and the U.S. on Friday and the Fed meeting next week.
* The S&P/TSX Stock Exchange Composite Index edged up 15.45 points, or
0.13%.
* The May GDP figures were released today and indicated a definite
slowdown in the economy. The GDP was flat, after rising 0.1% in March and
April. Second-quarter growth was weaker than expected, well below the 0.2%
predicted, and the strong loonie lost its momentum and dipped at the news.
* Amid the day's earnings releases, Maple Leaf Foods blamed the high
dollar for its second-quarter earnings of only C $21.2 million, compared to
C $25 million last year. It plans to restructure in certain key problem
areas, especially in the meat and agriculture sections.
* Giant drugstore chain Shoppers Drug Mart plans to buy MediSystem
Technologies for C $89.9 million in cash and stock. MediSystem provides
pharmaceutical services and products to long-term care facilities, and
execs believe the acquisition will be mutually beneficial.
* Meanwhile, the former chairman of drugmaker Biovail, Eugene Melnyk,
and some colleagues are in legal trouble over stock sales conducted via
Cayman Islands trusts. The Ontario Securities Commission is interested in
their alleged failure to file insider trading reports and other disclosures
for nearly 5,000 transactions over the last decade.
* The energy sector perked up as First Calgary Petroleums posted a
profit of US $6.6 million, from last year's loss of US $2.5 million, with
earnings of US $0.03 per share compared to a loss of US $0.01 a share last
year. The company performed a currency exchange move that netted it US $6.8
million during the quarter, and also proclaimed an expansion of its fields
in Algeria.
* U.S.-based Chevron has finished drilling the most expensive oil well
in Canadian history, the Great Barasway, in the Orphan Basin off
Newfoundland and Labrador. It is now set to begin operations in mid-August,
at a total cost of C $140 million. The drill bit will plunge 7400 metres in
2400 metres of water, the equivalent of thirteen CN towers down.
* As Inco licked its wounds from the loss of Falconbridge, execs
surmised that perhaps its greatest draw, the strength of the nickel market,
was also its downfall, as investors kept waiting for an even better offer
to materialize. In the meantime, Teck Cominco revised its offer for Inco,
offering more cash and less stock, worth as much as C $9.1 billion in cash
and 132.3 million shares. Meanwhile, the fate of the Phelps Dodge/Inco
merger is still unknown, and Phelps itself is being eyed by copper producer
Grupo Mexico, which might want to combine it with its Southern Copper Corp.
* In metals earnings, Glamis Gold rode the rising yellow metal market
to a record high of C $30.3 million, or C $0.20 per share, handily beating
forecasts of C $0.17 per share and up from C $0.07 last year. Total gold
production also rose, and new plans for a major mine in Mexico were
announced.
* Gold itself edged downwards 1% as the market awaits the results of
next week's Fed meeting, closing at US $644.80.
* Oil passed the US $74 mark again as tension rose over the weekend in
the Middle East and a major heatwave boosted demand for electricity,
closing up US $1.16 at US $74.40.
-- Carolyn.Crapo@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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