Thursday, August 17, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Canadian stocks ended somewhat higher on the day, as gains
within the financial and technology sectors battled weakness within the
resource space. In corporate stores, the softwood lumber deal was approved
by the Premier of B.C. As gold prices nose-dived, Bema Gold sold stock to
finance its expansion and Yamana Gold snapped up Viceroy.
* The S&P/TSX Stock Exchange Composite Index advanced 25.76 points, or 0.21%.
* The Globe & Mail, writing the obituary for Teck Cominco's failed bid
for Inco, said that "economic nationalism was no match for a cash-rich
bid." Teck had hoped that an all-Canadian mining giant could be created,
but now it will (along with many institutional investors like pension
funds) have to set its sights on mid-size and smaller companies. Some
analysts are concerned that with Canada's two biggest base-metal companies
now out of the game, C$40 billion in capital needs to be redeployed as a
new round of consolidation begins.
* Info tech was lifted by news of Hewlett-Packard earnings shooting up,
with revenue in third quarter totaling US$21.9 billion, up 5% from US$1.1
billion last year. Before adjustments, profit worked out to US$0.52;
analysts had predicted US$0.47 per share. Execs are hopeful that HP might
be in a position to finally beat IBM in revenue this year.
* The head of the largest timber-producing province in the nation has
endorsed the Canada-U.S. softwood lumber deal. British Columbia Premier
Gordon Campbell said of the revised deal, "From a B.C. government
perspective, this agreement ... creates more stability and more certainty."
However, the viewpoints of the Ontario and Quebec governments are less
sanguine; all major parties must sign waivers giving Ottawa control over
the details, and also withdraw pending litigation, before it can be
ratified.
* The U.S. parent of Sears Canada, Sears Holdings, reported
better-than- expected earnings, with a net income of US$294 million, or
US$1.88 per share, up from US$161 million, or US$0.98 per share, a year
ago, handily beating expectations of US$1.67. Its buyout of Sears Canada is
still on hold after an OSC ruling on August 8th; it will have to create a
new bid circular to proceed if its appeal is rejected.
* Overshadowed by the yellow metal's fall was some M&A news: Yamana
Gold plans to buy Viceroy Exploration Ltd. for C$515 million in stock. Both
companies' boards have approved the merger, and Yamana will acquire
Viceroy's Gualcamayo gold project in Argentina.
* Crude skidded down again after OPEC released an afternoon statement
that it did not expect to reduce production for the rest of the year. In a
two-month low, oil closed at US$70.06, down US$1.83.
* The yellow metal continued its plummet, closing down US$13.70 at
US$625.30. The gold sector also dropped on the news that Bema was selling
18.4 million units to raise C$115 million in cash that it said it needed to
help fund exploration, and also to help with cost overruns at its Kupol
gold project in Russia. As for gold overall, demand is expected to pick up
for the upcoming wedding season in India.
* In economic news, June was the 17th consecutive month in which
Canadian investors snapped up foreign securities, spending C$4 billion
after C$10 billion in May. However, this was accompanied by a steep decline
in foreigners buying Canadian securities: C$343 million in June from C$5.9
billion in May.
-- 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
the right to update our reports. For more financial information at your
fingertips, please visit http://www.irchannel.com. If you have any questions
please e-mail James Sang at james.sang@tfn.com or call 646.822.6233 For
more information about Thomson Financial visit us on-line at
http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
back to top
