Wednesday, September 13, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Just as Bay Street started to relax as oil began to climb again,
it received mixed statistics and signals about economic growth. Resource
and tech stocks started to rise again as recent losses attracted bargain
hunters, and energy was buoyed by higher crude prices; however, healthcare
and financials were drooping as Statistics Canada released figures that may
signal a general economic slowdown. In Canada-U.S. news, the lengthy battle
over softwood lumber is over, with Government officials signing the final
agreement with American officials yesterday.
* The S&P/TSX Stock Exchange Composite Index rose 98.29 points, or
.84%.
* The long and bitter dispute over softwood lumber formally ended on
Tuesday, as a final agreement was signed by International Trade Minister
David Emerson and U.S. Trade Representative Susan Schwab in Ottawa. While
Parliament still must approve the deal, the support the Bloc Quebecois
announced last week will assure the Tories of its passage; the premiers of
British Columbia, Quebec, and Ontario also support the deal. The Government
will levy a 19% special tax on those companies that withhold their support
of the waiver that allows Ottawa to leave about US$1 billion in lumber
duties in American hands.
* Ivanhoe Mine's Oyu Togoi copper mine is now coveted by the Mongolian
government, under a new law that allows the government to claim up to 34%
of "strategic", privately-explored mining projects as an investment stake.
Industry and Trade Minster Bazarsad Jargalsaikhan said that the government
would provide security for the companies, concluding "Mongolian government
participation will create even more opportunities for Ivanhoe to raise
capital on world markets." Compensation has been mentioned but not
detailed, and Ivanhoe will be able to take the government to court if it
feels the amount is unfair. The industry is also reeling from a new 68%
profit tax, but foreign companies are trying to persuade the government to
rescind it.
* Cardiome Pharma reported good Phase II clinical trial results for
their new cardiac fibrillation drug; however, the higher 600mg dose did not
perform as well as the 300mg dose, and cautious traders lowered the stock
throughout the day.
* In financial news, the Bank of Nova Scotia has received permission to
be the first Canadian bank to open a branch in Shanghai, on the 25th
anniversary of Scotiabank's arrival in China. The branch will join 25
others in eleven countries in Asia.
* The CEO and general counsel of Bristol-Myers Squibb have been
dismissed due to their role in the Apotex deal to exclusively distribute
Plavix. After BMS stock plunged more than 31%, the sacking of CEO Peter
Dolan and counsel Richard Willard was recommended by the U.S. federal judge
who ruled that BMS had not complied with FTC filings.
* Aber Diamonds is going to buy the 47% of Harry Winston, the jewelry
retailer, that it does not already own. The price will be about US$157
million, and will expand the Toronto rough-diamond dealer's realm further
into retailing.
* The U.S. Department of Energy released its weekly oil inventories,
which showed a large increase in distillates to 144.6 million barrels, the
highest since January. Gasoline also climbed by 4.4 million barrels, but
crude itself dropped by 2.2 million barrels as refiners drew down supplies
to begin the reformulation from summer to winter gasoline; the supply is
still well above average. Oil snapped its seven-session losing streak,
closing up US$0.21 at US$63.97.
* Gold benefited from a slightly weakened greenback and bargain-hunting
investors; the yellow metal edged up US$2 to end at US$596.30.
* Statistics Canada reports that second-quarter labour productivity is
down for the first time in two years, with a 0.4% loss from the first
quarter. Meanwhile, the U.S. saw a 0.4% gain in the second quarter.
Statscan mentioned an economic slowdown and "a more pronounced increase in
hours worked". On a year-over-year basis, the rate has slowed to 1.4%, down
from 2.1% in first quarter.
-- 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
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SOURCE Thomson Financial Corporate Group
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