Latest News and Market Trends in Canada: M&A Activity, Real Estate, Stellantis, Revive Therapeutics, and More

2023-07-06 14:10:52

(Illustration: Camille Charbonneau)

NEWS ESSENTIALS

• M&A activity in Canada is improving, but traders are uncertain about the outlook for the second half. The volume of mergers and acquisitions (M&A) in Canada increased in the second quarter, mainly due to large proposed transactions. Traders still remain cautious about the outlook for the rest of the year due to global economic concerns and potential interest rate hikes.

• Abu Dhabi’s ADQ and Canada’s Bank of Montreal plan to acquire minority stakes in Sagard. ADQ, the Abu Dhabi State Holding, and Canada’s Bank of Montreal plan to acquire minority stakes in Sagard, a global multi-strategy alternative asset management company with assets of $14.5 billion, the two entities said in a joint statement.

• Toronto real estate prices fall in June due to higher borrowing costs. House prices in the Greater Toronto Area fell in June for the first time in five months as the Bank of Canada’s decision to relaunch its interest rate hike campaign injected some market uncertainty.

• Stellantis obtains larger subsidies for its battery factory in Canada. Stellantis-LG Energy Solution will resume construction of an electric vehicle battery factory in Canada after the federal government and the province of Ontario increased subsidies for the C$5 billion project.

• Revive Therapeutics’ investigational COVID treatment fails in late-stage study. Canadian company Revive Therapeutics said its investigational COVID-19 treatment failed to meet the primary goal of a late-stage study.

TRENDS BEFORE OPENING

Futures for Canada’s main stock index fell, following the decline in global markets, with trade balance data in sight later in the day. Wall Street futures fell as investors digested minutes from the Federal Reserve’s June meeting ahead of US jobs data due out later in the day. European equities fell on heightened concerns about an economic slowdown and further rate hikes globally, which dented risk sentiment. The Japanese Nikkei closed at its lowest level in more than a week, dragged down by semiconductor-related companies. Hong Kong stocks fell 3%, on weak regional markets and escalating Sino-US tensions. The US dollar weakened, while gold prices rose slightly. Oil prices held steady as the market digested the supply and demand outlook.

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TITLES TO FOLLOW

• Bank of Montreal: ADQ, the Abu Dhabi state holding company, and Canada’s Bank of Montreal plan to acquire minority stakes in Sagard, a global multi-strategy alternative asset management company, whose assets are amount to $14.5 billion, the two entities said in a joint statement. They added that as part of the transaction, Canadian insurance-focused financial holding company Great-West Lifeco will increase an existing minority stake, helping to drive Sagard’s future growth, including through mergers and acquisitions. . The transaction is expected to close in the third quarter, subject to regulatory approvals. Power Corporation of Canada will remain Sagard’s majority shareholder.

• Barrick Gold: the Tongon mine in Ivory Coast will continue to operate until at least 2030, after the discovery of significant new deposits, said its managing director. Barrick Gold has planned to process gold mined at Boundiali in Tongon. However, the company plans to build a new mine at Boundiali in 2025 if the deposit proves to be larger than Tongo, he added. Production at the mine is expected to exceed 200,000 ounces of gold in 2023 and continue to increase gradually until at least 2026, Hilaire Diarra said.

• Revive Therapeutics: The company said its investigational COVID-19 treatment failed to meet the primary goal of a late-stage study. The company was evaluating the safety and effectiveness of its oral treatment, bucillamine, in the study involving 713 patients with mild to moderate COVID-19. The company said it was pursuing certain initiatives, including partnerships and government support, to further develop bucillamine. Revive Therapeutics said it is reformulating bucillamine into an intravenous and inhaled version targeting rare disorders, including a blood flow disorder known as ischemia-reperfusion injury and acute respiratory distress syndrome.