- Drugmaker posts best day since 1995 after maintaining forecast
- Inter Pipeline slips after agreeing to $1 billion gas deal
Canadian stocks rose to the highest level in 13 months as Valeant Pharmaceuticals International Inc. surged the most in two decades on its forecast and commodities producers advanced.
The S&P/TSX Composite Index climbed 0.3 percent to 14,801.23 at 4 p.m. in Toronto, extending a five-day rally to 2.3 percent. Trading volume was 9.4 percent lower than the 30-day average.
The Canadian equity benchmark is up 14 percent in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.5 for the S&P/TSX, about 15 percent higher than the S&P 500 Index.
While mining and energy stocks have propelled Canada to the second-best performance among developed markets this year, it was health-care companies and banks that drove gains Tuesday. Valeant soared 25 percent for the biggest gain since September 1995, contributing almost one-third to the broader index’s advance. Royal Bank of Canada and Toronto-Dominion Bank rose at least 0.3 percent to lead banks higher.
Valeant maintained its full-year targets given in June, including adjusted Ebitda or earnings before interest, taxes and other items of $4.8 billion to $4.95 billion. To do so Valeant will need to significantly improve its results, after posting second-quarter adjusted profit of $1.40 a share, well short of the $1.47 average estimate. Sales plunged 11 percent.
Elsewhere in corporate earnings, Ritchie Bros. Auctioneers Inc. tumbled 11 percent for its worst loss in seven years after second-quarter earnings and sales missed estimates, blamed on a sudden decline in global equipment pricing in June. Ritchie Bros. also boosted its dividend. Premium Brands Holdings Corp. added 5.5 percent, closing at the highest in three months.
Raw-materials producers added 0.3 percent as a group as gold advanced in New York to halt a brief two-day slide. Iamgold Corp. slumped 11 percent after selling shares in a bought deal to raise $200 million. The gold mining company plans to use the cash to reduce debt and fund internal growth projects. While second-quarter revenue missed estimates, the company said it expects to complete several acquisitions this year.
Energy producers slipped 0.1 percent as crude prices ended the day lower in New York, falling from the highest close in two weeks. Oil advanced yesterday after OPEC said it will hold informal talks next month in Algiers.
Inter Pipeline Ltd. lost 2.2 percent after agreeing yesterday to buy the Canadian assets of Williams Cos. for C$1.35 billion ($1 billion) including extraction and processing facilities in the Alberta oil sands, as well as about 260 miles of pipelines.