TSE reinvents itself as international bourse

In a surprise twist, the Toronto Stock Exchange took the spotlight over the Jan. 23-29 report period by announcing it was trimming its benchmark index by as many as 100 companies, based on share price and market capitalization.

On May 1, the TSE-Standard & Poor’s will become Canada’s new key index, representing between 200 and 225 of the country’s largest companies. The reconstruction will also see the existing 14 sub-groups shrink to 10, consequently placing major metal producers in the same pot.

The 300 index traded in a narrow range over the report period, rising 7.85 points over the five trading days, for a gain of less than 1%. Resource stocks fared much better, with the metals and minerals sub-group jumping 173.61 points, or 4.2%, and the gold and precious metals sub-group climbing 66.74 points, or 1.2%.

Gold sank 65 over the period to a London morning fix of US$280.95 per oz. on Jan. 30. Nevertheless, Canada’s major producers marched forward: Barrick Gold rose 3 to $27.05; Placer Dome gained 5 to close at $19.25; and Kinross Gold added 4 to finish at $1.44 on a volume of 9.4 million shares to make it the volume leader.

Franco-Nevada Mining continued its rally, touching a new 52-high in mid-week before settling back to a period close of $27.35, for a gain of $1.20. Following that, on Jan. 30, Franco’s shareholders approved its takeover by New York-listed Newmont Mining. Newmont now requires approval from its own shareholders and 50.1% of Normandy Mining to complete the transaction. Normandy rose 35 to finish the period at $17.35.

Nickel gained 7 in London to be fixed at US$2.74 per lb. on the morning of Jan. 30. Lead and zinc each fell, whereas copper remained unchanged at US68 per lb.

The major base metal producers were a mixed bag: Cameco leapt $3.87 to $41.80; Falconbridge fell a nickel to $16.25; Alcan jumped $3 to $59.80; Teck Cominco‘s B series slipped 2 to $13.28; and Noranda climbed 28 to $15.65.

First Quantum Minerals dropped 5 to $2.70 despite attempts to distance itself from fellow Zambian miner Anglo American, which announced a withdrawal from the Konkola Deep project. First Quantum does expect its 44%-held Mulfulira and Nkana operations to lose money for at least two more quarters.

Among juniors, McWatters Mining vaulted 4 to 9 as the Quebec Superior Court stamped its approval on the company’s proposed restructuring. Creditors and shareholders had agreed to the plan a week earlier.