Thursday, August 31, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Merger mania gave a slight boost to the TSX today, with the
Goldcorp/Glamis merger creating the country's second-largest new gold
mining company. Two large banks also reported positive earnings, with CIBC
recovering nicely from a major loss last year. There was good news for gold
itself and the copper industry, and mixed stats from governments on both
sides of the border.
* The S&P/TSX Stock Exchange Composite Index rose 5.39 points, or
0.04%.
* Canadian Imperial Bank of Commerce posted a third-quarter profit of
C$662 million or C$1.86 per diluted share, up from a C$1.91 billion loss,
or a deficit of C$5.77 a share, in the third quarter last year, and beating
expectations of C$1.60 per share. However, last year's disappointments were
related to a one-time legal hit to deal with Enron-related lawsuits.
* Elsewhere, the National Bank of Canada also reported earnings,
recording a more than 6% rise in its third-quarter profit. Its net income
was C$220 million, or C$1.30 per share, up from last year's C$207 million,
or C$1.18 per share. Revenues arrived at C$933 million, up 4.9%.
* A Canadian gold mammoth will be created when Goldcorp buys Glamis in
a friendly takeover for C$9.5 billion, all in stock. The new company, to be
called Goldcorp, will be the country's second-largest gold miner (behind
Barrick Gold) and the fifth-largest in the world. The gold sector was
buoyed at the news, with Bema and Centerra rising by nearly 5%.
* In other resources news, workers at Chile's Escondida copper mine
might end their 25-day strike as 2,000 workers sign an agreement, according
to their union leaders. Escondida is responsible for nearly 8% of the
world's copper output and the strike roiled the red metal markets
throughout August.
* Production may restart sooner than expected on Alaska Prudhoe Bay
pipeline, according to the U.S. Secretary of the Interior, Dirk Kempthorne.
Hopes are high that the eastern leg of the pipeline, like the western, can
also be bypassed to increase production.
* Despite Iran's refusal to observe the UN deadline to stop enriching
uranium, with the threat of sanctions, crude edged up, as the news had been
expected. A pending Nigerian strike worried markets more. However, due to
evidence of ample U.S. reserves released yesterday, oil rose slightly,
closing up US$0.23 at US$70.23. For August, crude prices overall ended down
US$5.42.
* If the gold mergers weren't enough to lift the yellow metal markets,
gold itself leapt by US$5.30 to close at US$623.50. For the month, prices
dipped by 2%.
* On the economic front, Statistics Canada said the economy slowed in
the second quarter, advancing by 0.5%, slowing from the 0.9% jump in the
first quarter. Reasons given were the declining housing market, lower
consumer spending, and a fall in business infrastructure investment. On the
other hand, U.S. consumer spending hit a six-month high of 0.8% in July,
doubling the 0.4% rate of June, and wages were up 0.5%.
* A key U.S. inflation gauge, consumer prices, rose more slowly than
predicted, only 0.1% rather than 0.2%.
-- 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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