3 Things to Watch on the TSX Index on Tuesday

The ongoing trade war between the U.S. and China is expected to rattle markets on Tuesday. Making matters worse, a crash in Argentina’s peso and stock market along with ongoing protests in Hong Kong have investors looking for U.S. bonds and gold. 

| More on:

The ongoing trade war between the U.S. and China is expected to rattle markets on Tuesday. Making matters worse, a crash in Argentina’s peso and stock market along with ongoing protests in Hong Kong have investors looking for U.S. bonds and gold. 

The wall of worry continues to grow higher. As investors look for actionable news on Tuesday, here are three TSX stories to watch that could affect your portfolio.

Genworth MI Canada gets a new owner

In July, Genworth Canada MI’s (TSX:MIC) parent, Genworth Financial, announced that it would look at all strategic alternatives for its 57% stake in its Canadian subsidiary, so it could sell itself to a Chinese company that was having a hard time getting the Canadian government to grant regulatory approval of the sale.

On Monday, Genworth announced that it had found a buyer for its stake. 

Brookfield Business Partners (TSX:BBU.UN)(NYSE:BBU) will acquire 48.9 million shares of Genworth Canada MI for $48.86 a share for a total acquisition cost of $2.4 billion. 

Owners of Brookfield Business Partners ought to be happy with the company’s latest private equity acquisition. Genworth Canada is a leading mortgage insurance company in Canada with high barriers to entry and healthy profits.      

Jim Pattison bets on forestry

The forestry industry got a leg up Monday when Jim Pattison, one of Canada’s wealthiest people and owner of 51% of Canfor (TSX:CFP), offered to buy the remaining 49% for $16 a share. As a result of the unsolicited bid, shares of forestry stocks jumped nicely on Monday. 

Is it possible that the rally will carry into Tuesday?

“The bid shines a big light on Canadian lumber names, but how lasting that effect is will be interesting to see. I think the share prices will stay up this week and then probably drift lower unless something positive happens to lumber prices,” RBC Dominion Securities Inc. analyst Paul Quinn said in an interview.

Pattison, who also owns 12% of West Frase Timber, is confident that lumber prices will eventually recover, and when they do, Pattison will be a slightly wealthier billionaire as a result of his bold Canfor bid.  

Air Canada ups offer for Transat A.T.

Thanks to the competitive efforts of the Group Mach’s $14 bid for Transat A.T. (TSX:TRZ) along with protests from some of Air Canada’s (TSX:AC)(TSX:AC.B) shareholders, the airline has been forced to sweeten its offer for the tour operator to $18 a share, adding $200 million to the final cost of the takeover.

Without the increased offer, it’s unlikely that Letko Brosseau and Associates Inc., Air Transat’s largest shareholder with slightly more than 19% of its stock, would have voted for the sale. 

Group Mach had been acquiring Class B Transat shares to stop the transaction from going ahead. Transat’s board called on Quebec securities regulators to halt what it felt was a “clear abuse” of the capital markets. Group Mach CEO Vincent Chiara believes the actions of Transat should be examined given the board’s initial support of a $13 bid that was clearly inadequate.

Where will Air Canada stock go from here?

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Will Ashworth has no position in any stocks mentioned. The Motley Fool owns shares of BROOKFIELD BUSINESS PARTNERS LP.

More on Investing

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

Hourglass and stock price chart
Stock Market

It’s Not Too Late: Invest in These TSX Growth Stocks Now

Solid fundamentals of these top TSX growth stocks could help them maintain strong upward momentum in the years to come.

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

dividends can compound over time
Bank Stocks

Is TD Bank Stock a Buy for Its 5.2% Dividend Yield?

TD Bank stock offers a rare 5.2% dividend yield—can it rebound from challenges and reward contrarian investors? Here's what to…

Read more »

chart reflected in eyeglass lenses
Investing

How Should a Beginner Invest in Stocks? Start With This Index Fund

This Vanguard index fund is the perfect way to start a Canadian investment portfolio.

Read more »

analyze data
Bank Stocks

Is BMO Stock a Buy for its 4.7% Dividend Yield?

Bank of Montreal is up 20% since late August. Are more gains on the way?

Read more »