Canada Stocks Rise on Loblaw Drugstore Deal, China Growth Report
Canadian stocks rallied to the highest in almost six weeks as raw-materials producers gained after China’s growth matched forecast and Loblaw Cos. agreed to the biggest takeover of a Canadian retailer.
Loblaw Cos. jumped to a six-year high after agreeing to buy Shoppers Drug Mart Corp. (SC) for C$12.4 billion ($11.9 billion). Shoppers surged 27 percent to a record. Endeavor Silver Corp. added 7.4 percent as the company restated its second-quarter revenue to a higher level. Barrick Gold Corp. climbed 2.1 percent as the precious metal traded near a two-week high. Niko Resources Ltd. dropped 1.6 percent.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 74.24 points, or 0.6 percent, to 12,536.42 at 10:12 a.m. in Toronto, the highest intraday since June 5. The benchmark gauge jumped 2.7 percent last week, its biggest five-day rally since November, to erase a loss for the year. Trading was 16 percent below the 30-day average at this time of day.
Loblaw (L), the country’s largest supermarket company by market value, surged 8.4 percent to C$51.52, the highest since July 2007. The cash and stock deal for the country’s leading drugstore chain is the largest between two Canadian companies since Suncor Energy Inc. bought Petro-Canada in 2009.
China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier, according to the National Bureau of Statistics in Beijing. That equaled the median forecast in a Bloomberg News survey and the government’s target rate for 2013. The economy expanded at a 7.7 percent pace in the first quarter.
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