By John Kipphoff
Dec. 3 (Bloomberg) -- Canadian stocks fell a third day, led by commodity shares, as metals prices slid and Nexen Inc. plunged on a report that Total SA decided against making a bid for the company, co-owner of an oil-sands project in Alberta.
“Longer-term these assets are good,” said Francois Bourdon, who helps oversee about $14 billion at Fiera Capital Inc. in Montreal, referring to the Canadian oilsands, estimated to hold the second-biggest reserves after Saudi Arabia. “In the short run, the price of oil and the lack of available credit make these assets too expensive.”
Barrick Gold Corp. paced declines among mining companies as copper slid on concern that a global recession will reduce demand for the metal. Fortis Inc. retreated on a share sale. Research In Motion Ltd. and Bank of Nova Scotia rallied from two days of losses, leading computer and financial shares higher.
The Standard & Poor’s/TSX Composite Index dropped 30.85, or 0.4 percent, to 8,296.96 in Toronto as more than two stocks declined for every one that advanced.
Nexen, operator of the North Sea’s Buzzard oil field and co-owner of the Long Lake tar-sands project, plunged C$2.61, or 11 percent, to C$21.65, wiping out gains it made yesterday on speculation that it will be bought. France’s Total abandoned plans to acquire Calgary-based Nexen, the Times of London reported today, without saying where it got the information.
Total fell 1.5 percent in Paris trading and the cost of protecting its bonds from default jumped to a record. Nexen shares had jumped 11 percent yesterday after the Financial Times’s Alphaville Web site reported that Total had bank loans and other financing in place for a bid of up to C$19.7 billion ($15.8 billion), or C$38 a share, for the Canadian company.
Tarsands Partner
Opti Canada Inc., Nexen’s partner in Long Lake, dropped 16 percent to C$2.13 today after jumping 27 percent yesterday.
Other energy producers fell after crude oil fell 17 cents to $46.79 a barrel in New York, extending a three-year low. Prices have dropped $100 a barrel from a record in July.
EnCana Corp., the country’s largest oil and gas company by market value, fell 2 percent to C$52.88. Canadian Oil Sands Trust, a partner with Nexen and others in Syncrude Canada Ltd., the biggest tarsands producer, slid 6.8 percent to C$20.55.
Goldcorp, the second-biggest bullion miner by market value, fell 5.9 percent to C$29.28. Barrick Gold Corp., the biggest, declined 3.7 percent to C$33.25. Kinross Gold Corp., Canada’s third-biggest bullion miner, dropped 3.9 percent to C$17.95.
Metals Prices
Copper prices fell to the lowest since July 2005 in New York. Gold also declined, as the U.S. dollar strengthened, reducing the precious metal’s appeal as an investment.
Canada’s S&P/TSX, which gets three-quarters of its value from energy, raw-materials and finance shares, has declined 40 percent in 2008 before today, poised for its worst annual drop on record, after commodity prices slumped from records and global credit losses approached $1 trillion.
“We continue to be underweight equities,” said Bourdon. “We don’t know yet what shape this recession will take.”
Fortis slid 5.6 percent to C$25.48, the most since Nov. 18. The owner of utilities in Canada and the Caribbean said that it’s raising C$300.1 million by selling 11.7 million common shares at C$25.65 apiece to a group of brokerages, who will in turn sell the stock on to the public. Proceeds will be used to repay debt, St. John’s, Newfoundland-based Fortis said.
BlackBerry Maker
Research In Motion gained the first time in three days, adding 5.3 percent to C$48.90 even after saying that fourth- quarter profit will be less than it had previously forecast. The full earnings report is due on Dec. 18. The shares fell 15 percent in the past two days.
Results were “not the disaster many had feared,” said Rob Sanderson at Broadpoint.AmTech, in an e-mailed note. Investors should buy RIM stock on weakness because growth will probably exceed expectations, the San Francisco-based analyst wrote.
Scotiabank added 3.5 percent to C$33.50. Canada’s third- biggest lender said it would pay about one third of its C$2.3 billion purchase of a 37 percent stake in CI Financial Income Fund in stock. Previously the bank said it would pay all cash.
“This will alleviate some of the concerns surrounding the bank’s capitalization that arose out of its quarterly earnings,” Dundee Securities analyst John Aiken said. Scotiabank had fallen 12 percent in the previous two days after reporting a 67 percent drop in fourth-quarter profit because of bigger-than-anticipated investment writedowns.
Toronto-Dominion Bank gained 3.4 percent to C$42.50. The nation’s second-largest bank is scheduled to report its fourth- quarter earnings tomorrow. Toronto-Dominion pre-announced lower- than-expected fourth-quarter profit in November and sold C$1.38 billion in stock to bolster its capital.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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