By John Kipphoff
Dec. 4 (Bloomberg) -- Canadian stocks fell as oil prices slid below $44 a barrel and Prime Minister Stephen Harper won a suspension of Parliament, delaying an opposition bid to bring down his government and hasten an economic stimulus package.
Canadian Natural Resources Ltd. and Nexen Inc. paced a decline among energy producers. BCE Inc. surged on speculation that private-equity firms whose takeover of the company may have failed last week will instead buy a stake in the phone company.
The Standard & Poor’s/TSX Composite Index slid 2.9 percent to 8,057.82 in Toronto. The S&P/TSX, which gets three-quarters of its value from energy, raw-materials and finance shares, has declined 42 percent in 2008, poised for its worst annual drop, after commodity prices slid from records and global credit losses approached $1 trillion.
“The truth is that there’s nothing the government of Canada can do to stop the world financial crisis,” said David Baskin, president of Baskin Financial Services in Toronto, which manages about C$350 million. “Who are we kidding? We’re a bit player. We’re at the mercy of the commodity markets, which we can’t influence.”
Harper, who refused to grant the opposition a so-called confidence vote, which could oust the government, said today that Governor General Michaelle Jean agreed to his request to close Parliament for seven weeks. Upon parliament’s return, on Jan. 27, his administration will present a budget that includes “stimulus” for the ailing economy, Harper said.
Opposition
The opposition Liberals and the New Democratic Party agreed Dec. 1 to form a coalition, bring a vote of confidence against the government and accelerate a stimulus package for the economy, which is forecast to slip into recession in the fourth quarter. The separatist Bloc Quebecois would not be part of the government though it agreed to help it pass any legislation deemed matters of confidence.
Canadian Natural, the country’s second-biggest natural-gas producer, fell 13 percent to C$41. Larger rival EnCana Corp. retreated 5.8 percent to C$49.82. Suncor Energy Inc., the second-biggest oil-sands producer in the world, fell 7.3 percent to C$21.58.
Nexen lost 12 percent to C$19. The co-owner of the Long Lake oilsands mine in Alberta and the Buzzard field in the North Sea slid for a second day after a takeover bid from Total SA of France failed to materialize. The stock surged last week and on Dec. 2 on Financial Times reports that Total will make an offer. The stock fell on Dec. 3 after The Times of London reported that Total abandoned the plan.
Upgrader Canceled
Also weighing on companies with tarsands units was StatoilHydro ASA’s decision not to build an upgrader plant at its oilsands project, bought for about C$2.2 billion last year.
Baytex Energy Trust dropped 11 percent to C$14.90, the lowest intraday price in three years, after cutting its monthly dividend by 28 percent to 18 cents a unit. Penn West Energy Trust, Canada’s second-largest energy trust by market value, dropped 11 percent to C$14.30, the lowest intraday price since August 2003. Arc Energy Trust slid 11 percent to C$16.75.
Yesterday’s dividend cut by Baytex may kick off a series of distribution cuts among income trusts as oil “lingers below $50,” Scotia Capital analyst Jeremy Kaliel wrote in a note to clients today. Penn West and Arc, among others, are among the most likely trusts to lower their payouts, he said.
Crude oil fell 6.7 percent to $43.67 a barrel and touched $43.51, the lowest in almost four years, as the deepening recession in the U.S., Europe and Japan cuts fuel consumption. Copper dropped to the lowest closing price since May 2005.
New Proposal
BCE gained 4.8 percent to C$22.95. A group led by Ontario Teachers’ Pension Plan has brought a proposal to buy a minority stake to the Montreal-based company, said two people with knowledge of the plan. Last summer the group agreed to buy BCE for C$52 billion ($42 billion). The takeover was thrown into doubt last week when KPMG, the BCE’s auditor, said the transaction may leave it insolvent.
Canadian Imperial Bank of Commerce climbed 1.9 percent to C$46.18. The country’s fifth-largest lender by assets said fourth-quarter profit fell 51 percent to C$436 million, after it took writedowns tied to debt investments. Excluding one-time items, CIBC said it earned C$1.57 a share, beating the C$1.55-a- share median estimate of analysts.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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