Canadian stocks climb; Enbridge in assets deal
U.S. markets closed for Fourth of July holiday
Canada’s main stock index closed higher Wednesday, helped by broad-based gains in the health-care, energy and gold sectors, while the loonie inched higher.
Enbridge Inc.’s deal to sell $4.31-billion worth of Western Canadian natural gas infrastructure was the big mover of the day, said Michael Currie, vice-president and senior investment adviser at TD Wealth. “It’s definitely the biggest story of the day, it definitely got it moving. Enbridge has been struggling a bit this year, it’s still negative year-to-date. But it’s nice to see a deal where both Enbridge and Brookfield did take a jump on the day.”
Enbridge ended up 45 cents or 0.97 per cent at $46.84 while Brookfield Infrastructure Partners, which has agreed to buy the assets, closed up $1.98 or 3.93 per cent at $52.38.
The positive response from investors in both companies helped the TSX in general on the day, Currie said.
“It seems like it fits in with what Brookfield’s been trying to do, taking more steps into the gas distribution business. For Enbridge, it’s part of their strategy to reduce their debt. So it seems like a win-win, which is nice to see and that’s probably got the TSX up overall with strength in the energy sector.”
The S&P/TSX composite index closed up 41.56 points at 16,304.72 on a day that saw lighter than usual trading.
In New York, Wall Street markets were closed for the U.S. July 4 holiday.
On Friday, the U.S. is set to impose a 25 per cent tariff on $34 billion US worth of Chinese imports. China is expected to strike back with tariffs on a similar amount of U.S. exports. The pending tariffs, and the potential to add tariffs to hundreds of billions worth of more products, has put pressure on Chinese currency, Currie said.
“That got the Chinese yuan swinging around until the bank intervened to get that flat again, China stocks are a little bit down today, that’s one concern.”
The Canadian dollar averaged 76.09 cents US, up 0.07 of a US cent.
In international trading, the August crude contract was up 19 cents at $74.33 US per barrel and the August natural gas contract was down three cents at $2.84 US per mmBTU.
The August gold contract was up $4.60 at $1,258.10 US an ounce and the September copper contract was down six cents at $2.86 US a pound.
Crude-by-rail exports rise to record high
CALGARY — The National Energy Board says crude-by-rail exports from Canada grew to a record 193,500 barrels per day in April, up 13 per cent from the previous month, as full pipelines forced more producers to use trains to get their products to market.
The oil shipping tally beat the previous record of nearly 179,000 bpd in September 2014 and was well ahead of the 150,000 bpd moved in April 2017.
Andrew Botterill, a partner with accounting firm Deloitte, said he expects rail shipments will continue to grow this year.
He said the increased use of rail will allow prices for Western Canadian Select bitumen-blend crude oil to strengthen as compared with New York benchmark West Texas Intermediate crude. Botterill said demand for Canadian heavy oil is expected to increase as it will be needed in the U.S. Gulf Coast refining complex to replace shrinking volumes from Venezuela.
Deloitte forecasts global oil prices will fall back from recent three-year highs in the coming months as OPEC countries increase output and international demand for oil falls.