UPDATE 1-Canada's TSX boosted by Repsol purchase of Talisman
I know this is not directly related but I thought it may be good to share this news on this board. I especially like this quote from the news article:
"People are recognising that there is a difference between stock prices and business value,"
TORONTO, Dec 16 (Reuters) - Canada's main stock index jumped on Tuesday, with Talisman Energy Inc surging 46 percent after Spanish oil major Repsol agreed to buy the independent producer for $13 billion.
The Toronto Stock Exchange's S&P/TSX composite index was up 172.61 points, or 1.26 percent, at 13,877.75 in mid-morning trading.
"People are recognising that there is a difference between stock prices and business value," said Barry Schwartz, a portfolio manager at Baskin Financial Services. "At some point it's cheaper for companies with cash to go out and buy oil companies instead of drilling for themselves."
A near halving in the global oil price since June has lowered price tags on producers like Talisman. Repsol has long been searching for oil and gas assets in North America and elsewhere.
The weakness in oil has hurt Canada's stock markets, which have a large contingent of energy producers. The S&P/TSX composite index had lost 10 percent of its value in the last month, prior to Tuesday's rise. It is roughly flat for the year.
Canadian Natural Resources and Suncor Energy Inc also were up more than 3 percent each on Tuesday.
"At some point sellers are going to get tired of selling," Schwartz said. "To take us higher next year, I think we need to see commodities obviously stabilise and people to rush back into the financial services sector."
In the financial sector, Royal Bank of Canada gained 1.2 percent to C$78.50 and Toronto-Dominion Bank was up 0.9 percent at C$52.62. (Reporting by Alastair Sharp; Editing by Paul Simao)
