CP outlook, Valeant deal inject cheer into TSX
By Alastair Sharp TORONTO (Reuters) - Canada's main stock index notched a solid gain on Tuesday, helped by a surge in Valeant Pharmaceuticals International Inc after it said it planned to buy Botox maker Allergan Inc and an upbeat outlook from Canadian Pacific Railway Ltd . Valeant is not the only acquisition story bubbling in Canada, with major gold miner Barrick Gold Corp looking to snap up a smaller producer and its rival Goldcorp Inc having just walked away from another deal. "There's nothing like acquisitions to get everybody's juices going," said John Ing, president of Maison Placements Canada. "Barrick remains a big trader on speculation on whether they return to the bargaining table." Barrick gained 1.8 percent to C$19.37 in heavy trade as Goldman Sachs upgraded the stock to a "buy" from "neutral" and investors placed bets on whether it can pull off a bid for Newmont Mining Corp . Sources told Reuters on Monday that talks had hit a snag but are likely to resume with both companies eager for a deal. Valeant gained 7.7 percent to C$149.38 as investors cheered its latest acquisition plan, a partnership with activist investor Bill Ackman that could make Valeant a top five global pharmaceutical company. "Valeant is a growth story. There is a big chunk of the market that likes growth," said Michael Simpson, a senior portfolio manager at Sentry Select Capital Corp. "They like the fact that they're possibly teaming up with an activist investor who's got a decent track record, Bill Ackman, in their potential acquisition of Allergan." Shares in Canadian Pacific, the country's second largest railway, jumped 5.3 percent to C$172.62 after it reported strong first-quarter profit and said it could still meet its full-year targets despite one of the harshest winters in decades. The largest railway, Canadian National Railway Co reported solid numbers after the bell on Tuesday. Overall, the Toronto Stock Exchange's S&P/TSX composite index <.GSPTSE> ended the session up 62.29 points, or 0.43 percent, at 14,555.97. It hit a fresh near six-year high during the session. Maison's Ing said the index's sharp rise puts it at risk of pullback as geopolitical and other risks continue to swirl. "There's a lot of headwinds. We're up in rarefied territory, the technical indicators are very much overbought," he said. Rogers Communications Inc slipped 3.4 percent to C$42.78, meanwhile, after Canada's largest wireless provider reported a slip in profit and disappointing mobile subscriber adds. "Maybe the expectations on a new CEO coming in and dazzling analysts with some new area of growth were too high, but as it declines I would see it as a buying opportunity," Sentry's Simpson said. (Reporting by Alastair Sharp; Editing by Chizu Nomiyama and Tom Brown)
