TSX rises 1.55 percent to 10,825.56
* Mining, energy, industrials lead broad rally
* Surprise European growth helps sentiment
TORONTO, Aug 13 (Reuters) - Toronto's main stock index rose
sharply on Thursday as surprisingly strong European economic
data buoyed sentiment and commodity prices, sparking a
resource-led rally.
Reports showing recessions in Germany and France ended in
the second quarter overshadowed disappointing U.S. retail sales
and weekly jobless claims data, and allowed investors to become
increasingly more comfortable with risk in their portfolios.
Copper rallied to a 10-month peak on the strong sentiment
and gold rose on concerns about inflation, boosting the TSX
index's materials sector by 2.84 percent. Energy issues gained
1.88 percent as oil also ended higher.
"It does seem as though it's the premise that the North
American and global economies are strengthening," said Elvis
Picardo, analyst and strategist at Global Securities in
Vancouver.
"It's a good rally on the back of that sentiment."
Among materials issues, Pan American Silver jumped
10.4 percent to C$22.53, and copper and gold producer Quadra
Mining rose 7 percent to C$12.51.
Among oil and gas producers, Talisman Energy
gained 3.7 percent to C$17.55, while Nexen jumped 3.6
percent to C$23.41.
Altogether, the Toronto Stock Exchange's S&P/TSX index
climbed 165.69 points, or 1.55 percent, to end at 10,825.56.
($1=$1.09 Canadian)
(Reporting by Cameron French; editing by Peter Galloway)
Thursday, August 13, 2009
TSX rises 1.55 percent to 10,825.56
Pescod asks is Natural Gas finding a bottom?
For anyone who has been through the markets over the
last year, you know we’ve experienced something the likes
of which hasn’t been seen in a few generations. Not every-
one agrees that we are going back to more normal times—
whatever they are, but for those who were brave enough
five and six months ago to tiptoe back into the market, aver-
age down or whatever, there have been some amazing re-
wards.
At least for those stories that didn’t go bankrupt,
there have been some amazing rewards.
We’ve seen everything from base metals to oil to trans-
portation companies to you-name-it rebound significantly in
the last while, but there are two sectors that we have yet to
see much joy return. One is uranium and the other is natu-
ral gas.
If anything, natural gas has been steadily getting worse.
That doesn’t mean there is a lack of interest though be-
cause everyone assumes if you could figure out the bottom
for the gas cycle, there will be some abundant rewards
there as well.
One key is the absolutely outrageous volume being
traded on natural gas ETF’s, which tells you there are more
than a few people trying to pick the bottom.
For some thoughts on natural gas and when to get ex-
cited, we go to Doug Bartole, the well thought of President
of Vero Energy, one of the lower cost producers in the natu-
ral gas field.
Bartole’s first comments to us is about how it
has been the first of times...first of all, with so many drills
turning, so many wells drilled both in the United States and
Canada, it just provided the huge supply and then with the
economic landscaping getting lambasted, hitting industrial
demand, and now he points out we’ve even had a cool sum-
mer which has meant not many in Chicago, New England or
Eastern Canada have needed to turn on the air-conditioners
on at all.
As the key for investors as to when to get into the mar-
ket, Bartole looks at one number and that’s the number of
rigs that are turning. “It’s all about the rig numbers” he
suggests and he is rather frank in suggesting he wouldn’t
mind seeing gas in the $3.50—$4.00 area for a while as it
would keep the rig counts down.
In the meantime, for the second quarter he can see a
drop of natural gas supply in the United States of as much
as 4 1/2 to 5 BCF by the second quarter next year and 1 to 1
1/2 BCF in Canada because of current decline rates of al-
most 30% from producing wells.
Some of the excitement from the shale plays in the
United States which has caught the market’s attention he
also suggests are interesting because they produce big
flush production that sees dramatic drops in that produc-
tion.