December 10, 2012 / 7:54 PM / 6 years ago

CANADA STOCKS-TSX hits 1-wk high as Nexen jumps on deal approval

* TSX rises 60.12 points, or 0.49 percent, to 12,210.78
    * Eight of 10 main sectors advance.
    * Nexen up 14 percent, Progress gains 13 percent
    * MEG, Canadian Oil Sands, Athabasca decline

    By John Tilak
    TORONTO, Dec 10 (Reuters) - 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 13.5 percent to C$26.43 after the
federal government okayed 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
    Gains in the 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.
    At mid afternoon, the Toronto Stock Exchange's S&P/TSX
composite index was up 60.12 points, or 0.49 percent,
at 12,210.78. Earlier in the session the index touched
12,228.85, its highest point since Dec. 3.
    Eight of the 10 main sectors on the index were trading
higher, with the energy sector up about 0.8 percent.

    "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 0.5 percent to C$32.08
and played one of the biggest roles of any single stock in
weighing on the market.
    Smaller oil sands players were also hit. MEG Energy Corp
 was down 3.5 percent at C$33.52. Canadian Oil Sands Ltd
 fell 1.8 percent to C$19.64 and Athabasca Oil Corp
 lost 2.2 percent to C$10.03.    
    "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
new government rules limiting control of the Alberta oil sands
by state-owned companies will be healthy for the industry.
    After energy stocks, materials companies played the biggest
role in leading the market higher. The sector, which includes
mining companies, was up more than 1 percent, helped by higher
commodity prices.
    Barrick Gold Corp rose 1.4 percent to C$33.75,
Silver Wheaton Corp gained 2.5 percent to C$36.30 and
Teck Resources Ltd advanced 2 percent to C$35.30. Both
gold and silver prices were up about 0.5 percent.
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