TSX rises, led by CP Rail on railroad merger prospects

Thu Jan 19, 2017 4:59pm EST
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By Fergal Smith

TORONTO (Reuters) - Canada's main stock index edged higher on Thursday, helped by a jump in Canadian Pacific Railway shares on prospects of consolidation in the railroad industry and a rebound of uranium producer Cameco Corp.

Canadian Pacific Railway (CP.TO: Quote) rose nearly 4 percent to C$200.11 a day after saying its chief executive, Hunter Harrison, would leave five months earlier than originally expected and reporting a lower-than-expected adjusted quarterly profit.

"Many people believe that there will be consolidation in this industry," said John Stephenson, president & CEO of Stephenson & Company Capital Management.

"Someone who has the operational record of a Hunter Harrison is probably going to be one of the people to do it."

Harrison is in advanced talks to team up with a former Pershing Square Capital partner, seeking to shake up rival railroad CSX Corp (CSX.O: Quote), according to a person familiar with the matter. nL1N1F901X

The industrials group rose 0.5 percent overall, while the heavyweight financials group gained 0.2 percent.

Uranium producer Cameco Corp (CCO.TO: Quote) bounced 10.2 percent higher to C$15.85. It fell nearly 17 percent on Wednesday after a profit warning.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 11.96 points, or 0.08 percent, at 15,409.81.   Continued...

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014.  REUTERS/Mark Blinch