By James Langton
(September 24 – 13:20 ET) – Strong selling returned today. The sell-off broadened out and pushed the TSE 300 down about 76 points, or a little over 1%, at midday.
Volume was extremely strong this morning, at 64.4 million shares, although 17 million of that is attributable to Manulife Financial’s
huge IPO. Today’s decline is broader than the selling we’ve seen recently on the TSE, about 2:1 in favour of decliners. The market also saw 19 new 52-week lows this morning, and only five new highs. The volume picture is much more even. It indicates an orderly, albeit unanimous, decline. Selling volume is ahead of the buying only about 4:3.
The story is a familiar one for a bearish TSE of late. Everything is down except the golds. Apart from the tendency among golds to trade against the broader market these days, Salomon Smith Barney also upgraded its ratings on Placer and Kinross this morning. That gave the golds even more support. Placer is up more than 4.5% in heavy trading, second only to Manulife. Vengold is up 6% and Kinross has added more than 7% on the day.
But if you’re not mining gold you’re probably not happy. Financials, media, conglomerates and miners are all down about 2%, leading the sell-off.
The banks are particularly weak, led by the volatile TD Bank, which has dropped about 2.3% today.
Lets hope that Manulife does a better job running an insurance business than it does timing IPOs. The firm initially anticipated pricing in the upper end of its $18 to $24 IPO range. It slashed the price to $18 and has traded down in its debut. Huge blocks of stock are flying around the street this morning, with Manulife currently down about 25¢ to $17.75.
The firm is also debuting on the ME and NYSE today. Manulife’s launch has been a bit of a non-event in New York. It didn’t even get to ring the opening bell there. The debut also came on a day when Big Board insurers are all being hit with bad news. They expect losses in the P&C sector due to Hurricane Floyd and the Taiwanese earthquake.