CANADA STOCKS-Valeant deal sparks share jump, helps TSX ends week higher

Fri May 24, 2013 4:58pm EDT
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* TSX ends up 9.13 points, or 0.07 percent, to 12,667.22
    * Index gains 0.4 percent in shortened week
    * Valeant shares surge after reports of $9 billion Bausch &
Lomb bid
    * Manitoba Telecom climbs after deal to sell Allstream
    * National Bank up 1.4 percent after results

    By Alastair Sharp
    TORONTO, May 24 (Reuters) - Canada's main stock index
reversed earlier losses on Friday after several stocks jumped on
takeover moves, helping the TSX shrug off uncertainty over U.S.
central bank monetary policy that hurt U.S. indices.
    Shares in Valeant Pharmaceutical International Inc 
jumped more than 13 percent to C$86.91 after a source said the
company is close to a $9 billion deal to acquire eye care
company Bausch & Lomb. 
    "The key thing here is that investors are very confident in
management's ability to integrate this company," said Elvis
Picardo, a strategist at Global Securities in Vancouver.  
    Regional telecom company Manitoba Telecom Services 
gained 5.7 percent to C$33.93 after it said it was sellings its
Allstream fiber optic network. 
    The deals, and particularly the potential Valeant purchase,
pushed the index into positive territory, annulling broad
weakness caused by fears that the U.S. Federal Reserve will turn
off the tap on its stimulus program.
    The Toronto Stock Exchange's S&P/TSX composite index
 ended up 9.13 points, or 0.07 percent, at 12,667.22.
It gained 0.4 percent for the four-day week.
    The index was also helped by gains in some financial stocks,
including National Bank of Canada, which gained 1.9
percent to C$77.02 after hiking its dividend. 
    Global's Picardo said solid earnings reports from other
Canadian banks next week could add to the recent momentum.
    Royal Bank of Canada, the country's biggest bank,
advanced 0.6 percent to C$63.53.
    Data showing positive economic sentiment in Germany and a
rise in shares of gold producers helped curb negative sentiment.
    Investors have been rattled by hints from U.S. Fed Chairman
Ben Bernanke that the central bank might slow its massive
growth-stimulating bond purchases.
    "The monetary easing in the United States is not going to go
on forever," said Fred Ketchen, director of equity trading at
    "One of these days they're going to pull back on that,"
said. "So far they haven't got to that point."
    Energy shares fell 0.3 percent, tracking a weekly drop in
the price of oil. 
    Shares of Niko Resources rose 22.7 percent to
C$7.35. The company, along with partners Reliance Industries Ltd
 and BP, announced a significant gas condensate
discovery off India's east coast. 
    The materials sector, which includes mining stocks, fell 0.9
percent as gold producers slipped.
    Barrick Gold Corp fell 2.1 percent to C$19.69, and
Goldcorp Inc lost 1.3 percent to C$27.70.
    "While there may be some investors willing to step in to
these depressed TSX sectors, the fact remains that we are very
much a proxy for global growth," Global's Picardo said.
    Financials, the index's most heavily weighted sector, were
up slightly.
    National Bank of Canada reported a 6 percent
increase in its quarterly operating profit, while also outlining
plans to buy back shares and raise its quarterly dividend.
    The results follow Toronto-Dominion Bank's report on
Thursday that its second-quarter profit rose. 
    "That's continuing the parade we've seen of encouraging,
modestly improving earnings from our financial institutions,"
Ketchen said. "To me, that's a good sign."