CANADA STOCKS-TSX at 1-month high as Shoppers surges on Loblaw deal

Mon Jul 15, 2013 10:54am EDT

* TSX rises 78.62 points, or 0.63 percent, to 12,540.81
    * All 10 main index sectors advance
    * Shoppers shares jump 27 percent
    * Gold-mining shares climb with bullion

    By John Tilak
    TORONTO, July 15 (Reuters) - Canada's main stock index
advanced on Monday to its highest in more than a month, boosted
by gains in Shoppers Drug Mart Corp after grocer Loblaw
Cos Ltd agreed to buy the pharmacy chain for C$12.4
billion ($11.9 billion).
    Investors also digested data showing the Chinese economy
slowed in the second quarter and U.S. retail sales rose less
than expected in June.  
    Shares of Shoppers, the country's biggest pharmacy chain,
shot up 27 percent and had the biggest positive influence on the
market.
    Facing heightened competition from Target Corp and
Wal-Mart Stores Inc, Loblaw said it would create a
retail giant with more than C$42 billion in revenue and gain
access to the growing small-urban store sector. 
  
    "The market is quite encouraged by the Loblaw-Shoppers deal.
It makes a lot of sense," David Cockfield, managing director and
portfolio manager at Northland Wealth Management said.
    "A lot of it is about competition, but it's also about
diversification," he added. "They're really structuring
themselves more toward the Wal-Mart formula." 
    The Toronto Stock Exchange's S&P/TSX composite index
 was up 78.62 points, or 0.63 percent, at 12,540.81,
after reaching 12,549.11, its highest since June 5.
    Cockfield said investor sentiment appeared to be rebounding
and the Canadian index could hit the 13,000 mark if the momentum
continued. All of the 10 main sectors on the index were higher.
    Financials, the index's most heavily weighted sector, rose
0.5 percent.
    Royal Bank of Canada, the country's biggest lender,
climbed 0.5 percent to C$62.13, and Bank of Nova Scotia 
was up 0.7 percent at C$57.47.
    Gold miners drove gains in the materials group, which
climbed 0.3 percent. They benefited from a higher bullion price.
 
    Barrick Gold Corp added 1.7 percent to C$15.75.
    Shares of energy producers rose 0.2 percent.
    Shoppers rose to C$61.27, and Loblaw gained 8.6 percent to
C$51.65. The two stocks helped lift the consumer staples sector
up 8 percent.