Global markets have shifted downward this week prompted by China’s continued intervention in state-owned enterprises, COVID-hampered growth prospects, and the question of whether or not inflation is here to stay.
The TSX is down about two per cent so far in September after seven consecutive months of gains. The index fell 1.4 per cent to its lowest level in over a week on Tuesday, as investors offloaded global bonds and technology companies in favour of sectors more likely to benefit from the post-pandemic reopening.
Shares of Kirkland Lake Gold fell 7.4 per cent on Tuesday after Agnico Eagle Mines agreed to buy the company for C$13.5 billion, which amounts to a 1 per cent premium. The deal would create one of the world’s largest producers of gold bullion.
Agnico CEO, Sean Boyd, views the lack of a premium as a hedge against value destruction, setting the stage for the companies to find synergies as equals.
Also on Tuesday, cannabis giant Aurora reported a wider-than-expected Q4 loss of $135.1 million and smaller-than-expected sales of $19.5 million.
In spite of the misses, Aurora’s CEO, Miguel Martin, believes that restructuring measures will help the company reach profitability in the future. These measures include the forthcoming closure of its Aurora Polaris property in Edmonton, which accounts for eight per cent of its workforce.
Aurora expects to save up to $80 million on an annualized basis by Q2 2023.
Today’s rebound in Canada’s main index – up 0.1 per cent as of 1:07 pm ET – is but a tepid sign of investor sentiment against the uncertainty plaguing near-term returns.
That said, with the two-year bond at 0.5 per cent and the 10-year at 1.5 per cent, investors may be dealing with a severe case of the TINA Effect, which holds that There Is No Alternative besides equities to meet their spending needs.
Market movers
Companies with market-moving news this week fall into the technology, industrial and mining sectors.
PyroGenesis announced a new joint venture to convert aluminum dross residue into chemical products, furthering its ESG mandate.
Mining magnate Eric Sprott exercised 6,666,667 warrants into Benchmark Metals stock, picking up $2,666,667 in common shares, consolidating his position as the company’s largest shareholder.
E79 Resources reported visible gold in five out of seven deep exploration drill holes at its Happy Valley Gold Prospect in Victoria, Australia.
Finally, American Creek Resources released the third set of results from its 2021 drill program at the Treaty Creek Project, highlighted by 1.13 g/t gold equivalent over 67.5 m at the Eureka Zone.
Some of the companies announcing capital raises this week are:
Alpha Cognition, a biopharmaceutical company developing treatments for neurodegenerative diseases.
Nexus, a real estate investment trust focused on buying and managing industrial, office and retail properties.
Bluesky Digital Assets, which mines cryptocurrencies and develops technology services for the digital currency market.
