S&P/TSX Composite index (INDEXTSI:OSPTX) to head lower while Emera Inc (TSE:EMA) trades heavily on FERC approval, Suncor Energy Inc. (TSE:SU) will lose ground on oil prices, and Royal Bank of Canada (TSE:RY) (NYSE:RY) looking like it will take a hit as energy prices impact the loonie to the downside.
Emera’s Instalment Receipts traded a whopping 16 million shares on Friday after announcing it had received approval from the Federal Energy Regulatory Commission (FERC) to go ahead with the company’s acquisition of TECO Energy Inc. (NYSE:TE), finding it was ‘consistent’ with the public interest. The deal is worth CA$14.75 billion and still faces hurdles from other regulators who must sign off on the deal. Halifax-based Emera is quickly becoming one of the world’s major electrical power utility players, with assets before the TECO acquisition of $11 billion, and delivering energy throughout northeastern North America. TECO delivers gas and electricity to over 1 million customers throughout Florida and New Mexico.
Emera’s Instalment Receipts traded 16 million shares on Friday closing the day up $0.70 at CA$34.50. The company’s common shares closed up $0.47, or 1.09 percent to $43.72 per share on volume of 745,000.
Suncor Energy Inc, who saw its shares recover on Friday as oil prices last week rallied ever so slightly, finished the week at $31.33 per share with 7.3 million shares changing hands, up 5.28 percent.
With oil losing 3 percent in early trading on Monday, Suncor Energy shares look poised to retreat, as do many other higher cost energy producers focused on the Canadian oil sands. Suncor and Canadian Oil Sands Limited (TSE:COS) moved closer to a completion of their merger after Suncor bumped its offer to 0.28 of one Suncor common share for each outstanding share of Canadian Oil Sands.
And finally the Royal Bank of Canada, whose shares were seen to appreciate by 3.76% on Friday on volume of 5.2 million shares, closing the week at $69.34 per share, will also head lower today as lower oil prices make the loonie less attractive, and thus Canadian bank stocks as well. Analysts in the United States see the loonie heading lower by the end of 2016, with some targets suggesting it will fall to as low as $0.60 by the year-end.
Canada is poised on the bring of a recession, and job losses are starting to mount across the country -especially in the oil and gas-dependent western states. The question investors are asking – and one that will very much determine to what extent Canada tumbles into recession – is whether or not the widespread economic downturn in Canada is finally going to be the pin that pops the real estate bubble that has been propelling the Canadian economy along.
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