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tsxTORONTO: Toronto's main stock index hit a one-week high on Monday, led by a rally in Nexen Inc and Progress Energy Resources Corp, after Canada approved foreign bids for both energy companies while also imposing limits on takeovers in the sector.

 

Nexen shares jumped 13.8 percent to C$26.77 after Ottawa approved a $15.1 billion bid from CNOOC Ltd, China's third-largest oil company. Progress Energy, whose $5.3 billion takeover by Malaysian state-owned energy company Petronas was also approved, surged 13.4 percent to C$21.96.

 

Gains in those two stocks and the broader energy sector outweighed the impact of new restrictions on some investments in the oil sands sector that hurt shares of some smaller players.

 

The Conservative government said on Friday it would block virtually all new attempts by foreign state-owned enterprises to buy assets in the sector.

 

"It was a well-crafted decision. Overall people are satisfied. The primary concern here revolves around the fact that state-owned enterprises are, unlike free-market companies, competing with an unfair advantage," said Michael Sprung, president of Sprung Investment Management.

 

The Toronto Stock Exchange's S&P/TSX composite index ended up 70.88 points, or 0.58 percent, at 12,230.47. Earlier in the session the index touched 12,236.71, its highest point since Dec. 3.

 

All 10 main sectors on the index ended higher, with the energy sector up 0.9 percent and materials gaining 1 percent.

 

NO 'FOR SALE' SIGN IN CANADA

"There is no 'for sale' sign up in Canada. We are open for business, but not in all sectors are we willing to sell out ourselves to somebody offshore," said Fred Ketchen, director of equity trading at Scotia McLeod.

 

"Investors will be far more cautious of takeover talk. It removes some of the speculation of takeover chatter within the market, especially when they're involving foreign-based companies," he added.

 

Shares of some companies active in the oil sands sector declined over concerns about more limited investment.

 

Suncor Energy Inc, Canada's largest energy company and a dominant oil sands producer, fell 0.6 percent to C$32.04 and played the biggest role of any single stock in weighing on the market.

 

Smaller oil sands players were also hit. MEG Energy Corp was down 3.1 percent at C$33.65. Canadian Oil Sands Ltd fell 1.1 percent to C$19.78 and Athabasca Oil Corp lost 2.4 percent to C$10.00.

 

"People are worried about the capital that's going to be available in the oil industry. Certainly there has been a ring drawn around the oil sands," Sprung said. Investors might view smaller oil sands companies as being shut out from foreign takeovers at a premium price, he added.

 

On Monday, the chief executive of Canadian Oil Sands said the new rules will be healthy for the industry.

 

Miners were boosted by higher commodity prices.

 

Barrick Gold Corp rose 1.5 percent to C$33.77, Silver Wheaton Corp gained 2.1 percent to C$36.15 and Teck Resources Ltd advanced 2.1 percent to C$35.33. Both gold and silver prices were up about 0.5 percent.

 

Center>Copyright Reuters, 2012


 



 
Index Closing Chg%
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Arrow H.Seng 24,532.43 0.91
Arrow Sensex 25,480.84 1.60





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