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Pharmaceuticals are launching new products at record prices this year, according to a Reuters analysis. (Photo: Taufiq Barbhouia for Unsplash)

News is essential

• Turquoise Hill rejected Rio Tinto’s US$2.7 billion offer to buy the company Turquoise Hill Resources has rejected an offer by majority shareholder Rio Tinto to buy the 49% stake it does not already own for US$2.7 billion, saying the offer would not reflect the full and fair value of the Canadian company.

• Wall Street resumes trading in Russian government bonds Several major Wall Street banks have resumed offers to facilitate Russian debt transactions in recent days, according to bank documents seen by Reuters, giving investors another chance to dump assets widely seen as toxic in the West.

• Withdrawal of Chinese firms from the NYSE paves the way for a deal with the US The decision to delist five Chinese state-owned enterprises from the New York Stock Exchange (NYSE) could allow Beijing to reach an audit agreement with the United States, ending a dispute that has dragged on for more than a decade, according to analysts and advisers.

• Markets react quickly to Federal Reserve warnings. The U.S. Federal Reserve’s pessimistic tone on inflation quickly filtered through the U.S. housing market this summer, raising mortgage rates and slowing home sales.

• Record prices of new drugs launched in the US in 2022. Pharmaceuticals are launching new products at record prices this year, a Reuters analysis shows, underscoring their pricing power even as the US Congress tries to cut the annual bill for prescription drugs in the US by more than US$500 billion.

(Re)read all market news

Trends before the opening

Futures for Canada’s main stock index are headed lower as falling gold prices hurt investor sentiment.

Wall Street futures were trading in negative territory after China’s central bank surprised markets and cut its key rate.

Chinese stock markets ended the session on fears of an economic slowdown, while the Japanese Nikkei ended higher, benefiting from a very good earnings release.

European stocks were ahead as investors turned to defensive stocks such as healthcare and consumer staples.

The US dollar is rising and the Chinese yuan is falling.

Oil prices fell due to demand in China.

Follow the headlines

• Turquoise Hill Resources: The mining company has rejected an offer from its majority shareholder Rio Tinto to buy the 49% stake it does not already own for US$2.7 billion, saying the offer would not reflect the full and fair value of the Canadian company. “The engagement between the parties did not result in consensus on price and pricing or an improved proposal from Rio Tinto,” Turquoise Hill said in a statement. “Rio Tinto is disappointed by the special committee’s decision and continues to believe that the terms of the proposed transaction will provide compelling value to Turquoise Hill’s minority shareholders by providing certainty of an all-cash offer at an attractive premium,” Anglo-Australian miner Dr. Toronto-listed Turquoise Hill has a market capitalization of US$5.3 billion.

recommendation

• CCL Industry: CIBC raised its target price from C$71 to C$74 due to an increase in certain valuation metrics.

• Sentara Gold: National Bank of Canada cut its target price from C$14 to C$10.5 after the company reported weaker-than-expected second-quarter results.

• Exchange Income: CIBC raised its target price to C$59 from C$56.5 after the company released very strong second-quarter results.

• Northland Power: National Bank of Canada raised its price target to C$49 from C$47 after the company reported better-than-expected second-quarter results and raised its target for the current year.

• Shokar: ATB Capital Markets raised its target price to C$10.5 from C$8 after the company reported very strong second quarter results.

Key indicators on the agenda

8:30 am Manufacturing Sales, var. False (June): Consensus -0.9%, Previous -2.0%

08:30 Wholesale trade, var. False (June): Consensus 0.5%; Previous 1.6%

Publication of results

August 15th

Ivanhoe Mine: Q2 earnings per share forecast at US$0.10

K92 Mining: Q2 earnings per share are forecast at US$0.05

August 16

No publication of major results is anticipated.

Corporate agenda

08:30 K92 Mining: Q2 earnings conference call

10:30 a.m. Ivanhoe Mines: Q2 earnings conference call

Coupon Secondment

No major coupon separation expected today.

All analyst forecasts are based on I/B/E/S data from Refinitiv.

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