Canadian Stocks Rise as Valeant Jump Offsets Slumps in Oil, Gold

Canadian stocks rose, erasing earlier losses of as much as 0.3 percent to clinch a fifth week of gains, as a surge in Valeant Pharmaceuticals International Inc. (VRX) offset a slump in oil and gold producers.

Valeant jumped 13 percent to an 11-year high after a person familiar with negotiations said Canada's largest drugmaker might pay $9 billion to buy Bausch & Lomb. Manitoba Telecom Services Inc. surged 5.7 percent after agreeing to sell its Allstream unit to a firm co-founded by Egyptian billionaire Naguib Sawiris. Encana Corp. fell 0.7 percent as oil capped its biggest weekly decline in more than a month. Banro Corp. and OceanaGold Corp. slid more than 3.9 percent as gold retreated.

The Standard & Poor's/TSX Composite Index (SPTSX) rose 9.13 points, or 0.1 percent, to 12,667.22 at 4 p.m. in Toronto. The benchmark equity gauge's 0.4 percent gain in the past five days gave it the longest streak of weekly advances since February 2012.

"The S&P/TSX has been pretty quiet while other markets have been swinging a lot," said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. The firm manages C$500 million ($484 million). "Commodities are falling. We're seeing oil is down, as is gold. The U.S. economy has been doing pretty well, so it's providing a bit of a floor to markets."

Canadian equities traded as low as 0.3 percent as energy and raw-material shares retreated amid a slump in oil and gold prices. Seven of 10 industries in the S&P/TSX declined, as five stocks fell for every three that rose.

Valeant Deal

Valeant surged 13 percent to C$87, its highest close since January 2002, pacing an 8.7 percent increase among health-care stocks. Warburg Pincus LLC, which bought Bausch & Lomb in a 2007 leveraged buyout, as recently as March was considering an initial public offering, but is now near a deal to sell to Valeant, said a person who asked not to be identified because the negotiations are private.

Manitoba Telecom (MBT) gained 5.7 percent to C$33.93 after selling its Allstream fiber network business to Accelero Capital Holdings for C$520 million. The company will use the cash to invest in new wireless spectrum and improve the speed of its existing networks, Manitoba Telecom said in a statement.

National Bank of Canada, the country's sixth-largest lender, advanced 1.9 percent to C$77.02 after reporting record second-quarter adjusted profit and raising its dividend 4.8 percent.

Niko Resources Ltd. jumped 23 percent to C$7.35, for its biggest gain since 1996. Niko, along with partners Reliance Industries Ltd. and BP Plc, announced today they have discovered gas and condensate in a well off the east coast of India. Niko holds a 10 percent stake in the block where the discovery was made.

Banro slipped 3.9 percent to C$1 and OceanaGold sank 4.9 percent to C$1.76 as gold for June delivery retreated for the third time in four days.

Encana fell 0.7 percent to C$20.28 and Suncor Energy Inc. declined 1.1 percent to C$31.95 as the price of crude for July delivery retreated 10 cents to $94.15 a barrel. Oil slid 1.9 percent this week, the most since the seven days ended April 19.