Canada Stocks Close Down 110 Pts; Canadian Tire and Scotiabank In The News
Canada stocks Thursday closed down for the third time this week, today losing near 110 points, led by energy stocks on lower oil prices .
Among sectors, all but Mining and Telecom were lower. Of commodities, gold prices ended the U.S. day session little changed. Benchmark iron ore hit its lowest level since September 2012. According to Bloomberg, West Texas Intermediate crude dropped with supplies at a seasonal record high and as the euro slipped against the U.S. dollar. Brent settled above US$108 for a second day, widening the premium to WTI.
In a pretty crazy, busy day for TSX and TSXV earnings and news, retailer Canadian Tire Corporation, Limited (CTC.TO, CTC-A.TO) and Bank of Nova Scotia (BNS.TO, BNS) stole the spotlight. CTC-A.TO closed slightly lower after earlier hitting a new record high of $110.18. BNS edged up and closer to a year high.
Canadian Tire said Thursday that diluted EPS attributable to owners were $0.88 in the first quarter, down 2.2% over the prior year due to the impact of approximately $5.0 million, or $0.06 per share, for earnings attributable to the public unitholders of CT REIT (non-controlling interests). Revenue rose 3.8% to $2.57 billion.
Canadian Tire also announced a 14.3% increase in dividend, increased its share purchase commitment under NCIB for an additional $100 million and said it intends to pursue early retirement of a portion of its long-term debt.
But, perhaps, the biggest news of the day involving Canadian Tire revolved around a strategic partnership that will see Scotiabank (BNS.TO, BNS) acquire a 20% equity interest in Canadian Tire's financial services business for $500 million in cash. The agreement also includes a credit card funding facility whereby Scotiabank will provide Canadian Tire's financial services business with credit card receivable financing of up to $2.25 billion satisfying the original objective of mitigating future funding risk. In addition, the partnership includes the option for Canadian Tire to sell an additional 29% of its financial services business to Scotiabank within 10 years. The deal is subject to customary closing conditions and regulatory approvals, and the transaction is expected to close by September 30, 2014.