TSX ends flat ahead of word on Nexen, Progress
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index edged higher on Friday despite a sharp drop in shares of Nexen Inc NXY.TO and Progress Energy Resources Corp (PRQ.TO: Quote) ahead of a government announcement on what is expected to be its ruling on takeover bids for the companies.
Investors appeared to want to limit their exposure to stocks that could move violently in either direction depending on the announcement, which is also expected to include guidelines on how bids for Canadian companies by state-owned enterprises will be assessed in future.
"People don't want to be long the uncertainty over a weekend, so it's just shoot first and ask questions later," said John Goldsmith, deputy head of equities at Montrusco Bolton.
Nexen fell as much as 15.9 percent and Progress slipped almost 8 percent in late trade, before each pared those losses somewhat, closing down 6.4 percent at C$23.29 and off 4.4 percent at C$19.37 respectively.
China's CNOOC Ltd has offered $15.1 billion to buy Nexen and Malaysia's Petronas has bid C$5.2 billion for Progress. The Progress deal has already been rejected by the government once.
"Obviously this is a fairly significant policy decision, not just for Nexen but for the Canadian market and the resource sector specifically," said Levente Mady, senior portfolio manager at PI Financial Corp in Vancouver.
The news is expected at 5 p.m. EST (2200 GMT), with Prime Minister Stephen Harper to make a statement soon after that.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 8.46 points, or 0.07 percent at 12,159.59 after bobbing on both sides of the break-even line through most of the session. It dipped 0.65 percent on the week. Continued...