TSX Closes Up 48 Pts, Buoyed By Blackberry; But Colossus Weighs


Canada's main stock market, the Toronto Stock Exchange ( TSX ), closed up 48 points on Monday, with all sectors except for Utilities higher. The TSX will close for a half day on Tuesday and won't reopen again until 9.30am on Friday.

The Info Tech sector was the biggest gainer, led up by Blackberry (BB.TO, BBRY), which gained 3% after last week's news of a tie up with Foxconn pleased investors - despite news of a worse than expected result and more charges being booked. However, Blackberry did come under some late selling pressure and closed under $8, having touched a day high of $8.21 earlier.

Easily most actively traded was Colossus Minerals (CSI.TO), closing down 59% and touching record lows with 13.5 million shares changing hands, making it the most active on the TSX. The company this afternoon released a funding deadline update and resource estimate.

Meanwhile, Kris Thompson at National Bank of Canada noted while BlackBerry reported weaker then expect Q3 (Nov) results on Friday, investors cheered the manufacturing partnership with Foxconn, and management's targets to achieve cash flow breakeven by the end of F2015 and profitability in F2016.

Key Takeaways For National Bank were: Revenue declined 56% y/y to $1.2 bln vs. National Bank's $1.5 bln estimate. Service revenue of $632 mln was down 13% sequentially. Subscriber count was not disclosed. 1.9 mln handsets shipped vs. its 4.0 estimate; down 73% y/y and down 49% q/q. The poor shipments led to another inventory writedown of $1.6 bln (after a $934 mln charge in the previous quarter).

It said: "BlackBerry will eventually outsource all handset manufacturing to Foxconn, which should aid gross margin. The first handset will be jointly developed, manufactured by Foxconn and launched in Indonesia (& in other growth markets) in April 2014. While the balance sheet strengthened on a $1 billion debenture issuance, FCF was -$361 mln (aided by a tax refund and an unsustainable inventory reduction). While the commentary and strategy resonated with investors, we would continue to avoid the stock. Significant execution risk remains."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: TSX

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