TSX rises, led by CP Rail on railroad merger prospects

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.

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

Canadian Pacific Railway CP.TO 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, 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 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.

Gains were tempered by investor caution ahead of Donald Trump’s inauguration on Friday.

“It’s going to be a little bit challenging over the next week or two as the reality of what a Trump presidency might be settles in and more importantly just how long it will take to actually get anything implemented in terms of policy,” Stephenson said.

Just five of the index’s 10 main groups ended higher.

The energy group, which includes Cameco, dipped 0.1 percent even as oil rose.

U.S. crude oil futures CLc1 settled 29 cents higher at $51.37 a barrel as the International Energy Agency said oil markets were tightening even before cuts agreed by OPEC and other producers took effect. [O/R]

Milestone Apartments Real Estate Investment Trust MST_u.TO surged 9.9 percent to C$21.60 after a unit of private investment firm Starwood Capital Group said it would buy the REIT in a deal valued at about $2.85 billion.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.3 percent, with Barrick Gold Corp ABX.TO climbing 1.2 percent to C$22.56.

Gold XAU= edged 0.1 percent higher after being pressured earlier in the day by strong U.S. economic data and support from Federal Reserve Chair Janet Yellen for higher U.S. interest rates. [GOL/]

Additional reporting by Alastair Sharp; Editing by Nick Zieminski and Sandra Maler