CANADA STOCKS-Valeant and gold miners help TSX rise in low-volume trade

Mon May 27, 2013 4:50pm EDT

* TSX ends up 29.15 points, or 0.23 percent, at 12,696.37
    * Valeant surges after move to buy Bausch & Lomb
    * Gold shares climb after bullion price gains

    By Alastair Sharp
    TORONTO, May 27 (Reuters) - Shares in a pharmaceutical
company making a big buy surged for a second straight session
and the rising price of gold helped beaten-down miners bounce
higher in low-volume trade on Canada's main stock index on
Monday.
    Valeant Pharmaceuticals International hit an
all-time high and ended up 10.2 percent at C$95.85 after the
drugmaker said it would buy eye-care products company Bausch &
Lomb Holdings Inc for $8.7 billion. 
    "It's enthusiasm for the target," said John Ing, president
of Maison Placements Canada.
    The deal, which was initially reported on Friday, is
expected to thrust Valeant into the upper ranks of the global
pharmaceutical sector.
    "It sounds like a good deal," said Rick Hutcheon, president
and chief operating officer at RKH Investments. "They've been
quite the aggressive acquisitor. Presumably (Bausch & Lomb)
makes a good fit."
    Meanwhile, a higher bullion price, supported by strong
physical demand and a weaker dollar, spurred the rise in shares
of gold companies. 
    "Gold prices have held their own ... that is giving a boost
to some of these gold stocks," Ing said. 
    Global gold miners, which occupy a sizable chunk
of the Toronto Stock Exchange's S&P/TSX composite index
, have lost more than one-third of their value so far
this year.
    "The bandwagon certainly is empty, a lot of the momentum
players are out of them. There's no question that the stocks are
undervalued. Many of them are trading at less than 10 times
earnings," Ing said. 
    "However, everyone is focused on the bullion price and would
look forward to a price north of $1,400 and that would likely
cause a revival in the gold stocks."
    Spot and future prices for gold both closed under $1,395.
 
    Holidays in the United States, Canada's biggest trading
partner, and in the United Kingdom kept investor interest and
trading volumes low. About 55 million shares changed hands on
the Toronto market on Monday, compared with a daily average of
324 million in April, according to the TMX Group.
     "There is no particular news flow to drive the market one
way or the other, with gold being the one exception," said RKH's
Hutcheon. "Gold is at best in a trading range and at worst
topping out," he added. "It will continue to erode in value."
    The main TSX index closed up 29.15 points, or 0.23 percent,
at 12,696.37 points. 
    Barrick Gold Corp added 1.9 percent to C$20.06 and 
  Goldcorp Inc gained 0.7 percent to C$27.90.
    Energy shares gave back 0.1 percent, reflecting a decline in
the price of oil. 
    Enbridge Inc lost 1.3 percent to C$47.80 and was
the biggest negative influence on the market. Transcanada Corp
 was almost as big a drag, down 1.2 percent at C$49.56.
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