Canadian Stocks Decline as Oil Retreats on Greek Debt Concern
Canadian stocks declined for the first time in five days as oil fell after German Chancellor Angela Merkel said “time is running out” for Greece to accept the conditions for a bailout.
Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, dropped 1.4 percent as crude futures declined for the sixth time in the last seven days. Canadian Pacific Railway Ltd. rallied 1.2 percent after William Ackman, the largest investor, renewed his call to replace Chief Executive Officer Fred Green. Rogers Communications Inc. (RCI/B), Canada’s biggest wireless provider, lost 1.5 percent after an analyst at Macquarie Group Ltd. cut his rating on the shares.
The S&P/TSX Composite Index dropped 17.43 points, or 0.1 percent, to 12,559.85 in Toronto after closing at a four-month high Feb. 3.
“Greece has been an almost-deal for a long time,” Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees about C$335 million ($336 million). “The longer it goes on, the more one has to realize that there might eventually be what’s been called the ‘hard default.’ It’s going to be a huge political chaos if that happens. Likely, everyone’s going to hit the sell button at the same time.”
The S&P/TSX gained each of the previous seven weeks, the longest streak since April 2009, and has advanced 5.1 percent this year. Canadian stocks have climbed as improvements in U.S. employment and manufacturing data have overshadowed the European debt crisis.
European leaders stepped up pressure on Greek politicians to meet the conditions of a 130 billion-euro ($171 billion) bailout. A gathering of Greek political leaders was delayed by a day until tomorrow as they struggled for a unified response. Antonis Samaras, the head of the second-largest party, indicated he would oppose some measures put forward by international creditors.
“I can’t quite understand why we need a few more days -- time is running out,” Merkel said today in a joint briefing with French President Nicolas Sarkozy in Paris.
Antrim Energy Inc. (AEN), which explores for oil and gas in the North Sea and Argentina, plunged 22 percent, the most since August 2006, to C$1.07 after abandoning a North Sea well. Cenovus Energy Inc. (CVE), the country’s fifth-biggest energy company, fell 1.8 percent to C$38.11.
C&C Energia Ltd. (CZE), an oil and gas producer with operations in Colombia, sank 13 percent to C$7.80 after reporting a well in the Putumayo Basin is a dry hole and will be abandoned.
Most gold producers fell as the metal retreated to the lowest price in more than a week as a rally in the dollar curbed demand for the metal as an alternative investment.
Great Basin Gold Ltd., which mines in Nevada and South Africa, dropped 8.7 percent to C$1.05 after saying its 2011 production trailed its forecast.
Base-metals and coal producers fell as copper dropped on the Comex in New York. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, declined 3.4 percent to C$22.64.
Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, decreased 2.1 percent to C$42.50 after Greg Barnes, an analyst at Toronto-Dominion Bank, reduced his rating on the stock to “buy” from “action list buy.” Barnes cited a lower coal-price forecast and higher copper-mining-cost estimates in a note to clients.
Rogers retreated 1.5 percent to C$38.07 after Greg MacDonald, an analyst at Macquarie, cut his rating on the stock to “neutral” from “outperform.” The company may report lower margins in the fourth quarter due to subsidies related to strong sales of Apple Inc.’s iPhone, MacDonald wrote in a note to clients.
Canadian Pacific Railway Ltd. (CP) advanced 1.2 percent to C$74.34. Ackman, the founder of New York-based Pershing Square Capital Management LP, told shareholders at a meeting in Toronto the board “has chosen the wrong CEO.”
Ackman, 45, buys stakes in companies he deems undervalued and pushes changes to improve returns. He arranged the meeting in Toronto to win support for his slate of five directors, a group that he said would help persuade the board to replace the current CEO, Fred Green, with Hunter Harrison, the former head of Canadian National Railway Co.
SXC Health Solutions Corp. (SXC), a pharmacy-benefits manager, fell 3.8 percent to C$61.02 after Reuters reported that “key people” at the Federal Trade Commission are seeking to stop the acquisition of Medco Health Solutions Inc. by rival pharmacy benefits company Express Scripts Inc.
-- Editors: Stephen Kleege, Jeff Sutherland
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