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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Crocodile who wrote (8661)	1/24/1998 12:36:00 PM
From: Kerm Yerman	Respond to of 15196

MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING FRIDAY, JANUARY 23, 1998 (2) OIL & GAS FORWARD Just a brief note to let you know that over the near term, I will be including information pertaining to the US markets. My objective is to establish clear sentiment of the oil and gas sector in North America. In doing so, I feel investors can get a better grip on situations as they occur. One of my often used phrases comes into play - as the US goes, Canada follows. NYMEX A sharp sell-off in heating-oil futures dragged the crude oil futures to a new low Friday at the Nymex. The February heating oil contract broke through so-called long term trend line support dating back to 1986 on monthly price charts, which may have triggered the heavy fund selling seen in the contract, analysts said. Trend lines are one tool of technical analysis, which seeks to discern the future direction of markets based on trading patterns. The front-month heating oil contract fell 1.30 cents to a session low of 44.30 cents a gallon, the lowest point for front-month heating oil futures since early March 1995, before settling a bit higher. That low bested Thursday's low of 45.30 cents a gallon, which also was last hit in March 1995. March crude oil was able to resist some of the heating oil pull following news that a 2,500-barrel oil leak forced Amoco Corp. to shut an offshore crude oil pipeline that supplied light, sweet crude oil to Texas City-area refineries. The size of the pipeline isn't clear, but a U.S. Coast Guard spokesman said the line handles oil from 27 offshore oil platforms. March light sweet crude oil settled down $0.30 to $15.74. Natural gas futures ended mixed Friday in an active session, with front months undermined by moderate weather forecasts and some technical selling after an early move up stalled at resistance, industry sources said. February slipped 4.3 cents to close at $2.117 per million British thermal units after stalling at $2.18 on ACCESS. March settled 3.6 cents lower at $2.125. Other months ended mixed, with some 1999s finishing up slightly. "We saw a lot of short covering this week, but we couldn't decisively break to the upside. We couldn't get through the recent high (in February at $2.185), but we couldn't break $2.075 support either," said one East Coast trader. Traders said a rising year-on-year stock surplus and forecasts for normal or above normal U.S. temperatures into February continued to weigh on prices. Chartists said the technical picture also deteriorated this week when February failed to follow through on the prior week's rally, but they noted the spot month was still holding the recent technical range. On the upside, a close above $2.185 should set up a test of next resistance at $2.25 and $2.34, but few expected to see those levels without some Arctic cold. February support was pegged at $2.075, with better buying likely at the $1.97 contract low. Spot continuation chart support was seen at $1.85-1.88. In the cash Friday, Gulf Coast weekend quotes were up a couple of cents to the $2.10 area. Midcon pipes were flat to down slightly in the low-$2s. New York city gate gas held fairly steady at about $2.50, while Chicago was flat to modestly higher in the mid-teens. The NYMEX 12-month Henry Hub strip fell 1.2 cents to $2.27. NYMEX said an estimated 68,522 Hub contracts traded, up from Thursday's revised tally of 54,037. NORTH AMERICAN RIG COUNT The number of rigs exploring for oil and natural gas in the United States stood at 996 as of January 23, up seven from the previous week, and 181 above the year-ago total of 815, Baker Hughes Inc [NYSE:BHI] reported. The number of rigs drilling on land rose by five to 839, while rigs working offshore remained at 132. The number of rigs active in inland waters rose by two to 25. Among the individual states, the biggest changes occurred in Louisiana, up by 12, and in Kansas, down by six. The Gulf of Mexico rig count rose by one to 131. The number of rigs searching for gas fell by three to 595, the number of rigs searching for oil rose by nine to 396, while the number of miscellaneous drilling projects rose by one to five. There were 241 rigs drilling directionally, 64 drilling horizontally and 691 drilling vertically. In Canada, the number of working rigs rose by six to 512 versus 415 one year ago. The weekly rig count reflects the number of rigs exploring for oil and gas, not those producing oil and gas. For additional data, go here; bakerhughes.com HEADLINE STORY The possibility of a merger between TransCanada PipeLines Limited and NOVA Corporation has got industry buzzing after the two pipeline giants confirmed ongoing discussions this morning. Although no agreement has been reached, the potential of a joint enterprise has raised concerns from some producers that competition will be stifled if the merger produces a dominant force. "It's hard to say how it would affect producers, if they kept two separate companies it may not have a heavy impact, as if they merged it and had one company controlling all the gas transportation in western Canada," said Greg Stringham, vice-president of markets and transportation for the Canadian Association of Petroleum Producers. Stringham believes all the competitive pipeline proposals currently before the regulatory boards have fueled the merger talks. "The competition that's being brought forward right now has certainly led them to look at these kinds of competitive alternatives," he said. Verne Johnson, president of Ziff Energy Group, agreed a NOVA-TCPL entity would definitely be a powerful corporate combination. However, the mere existence of a merger does not mean the transport capacity situation will be better or worse for producers, he said. "It depends on how the business is conducted, neither company would want to frustrate their customers. What the industry is looking for now is additional gas export capacity and merging of existing pipelines doesn't increase or decrease that," Johnson said. For the Small Explorers and Producers Association of Canada, the merger could have both positive and negative effects, said President George Fink. Producers could see benefits if the combined companies lessen their administrative burden and pass those savings on. However Fink cautioned: "We have to be careful because where we have two monopolies now putting them into one could result in real abuse of monopolistic powers." SEPAC seeks open markets and greater competition in the pipeline industry and this would create a bigger behemoth than what already exists, Fink added. While SEPAC awaits the outcome of the talks, the organization hopes regulators will take notice and exert efforts to provide and protect open competition in the pipeline industry if the merger proceeds. "We really feel the regulators have to be on top of the situation and give a whole lot of guidance as to what can be done and what can't," Fink said. Tom Bugg, president of Beau Canada Exploration Ltd., thinks the merger could provide positive netbacks to producers. "Anytime you can get a bigger size, reduce the overall cost and make it a more efficient operation, then I think it's got to be positive." Beau Canada currently ships with NOVA, TCPL and has committed to Alliance Pipeline Ltd. Although Bugg admits lack of competition can be a problem, he believes producers would remedy a one-sided market somehow. "Obviously from a producer's perspective you'd like to have as much competition as possible, but if they become more efficient they might be able to reduce their rates," Bugg said. Another producer, who has also signed on with Alliance, is not as optimistic as Bugg. "One party would have too much control over the pipeline structure in Canada and we're not pleased about it at all," said an executive who did not wish to be named. "Our biggest concern is one party having too much sway over the gas pipeline infrastructure out of Western Canada and it's not healthy. There's not much competition going on right now anyway, but it just gives one party even more clout and that never bodes well for competition," the source said. The executive noted NOVA has got itself between a rock and a hard place in a class action lawsuit launched by disgruntled Pan-Alberta Gas Ltd.shippers. If TCPL purchases NOVA, it would have to consider the implications of the additional cost, the source said. "Obviously there's a big dollar figure that's hanging out there, that would effect the value of NOVA. From a producer's perspective, we've applied to have NOVA named in the lawsuit and TCPL could certainly be included."

To: Crocodile who wrote (8661)	1/24/1998 12:46:00 PM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING FRIDAY, JANUARY 23, 1998 (3) FEATURE STORY Terra Nova Shifting To Canada St. Johns Evening Telegram Newfoundland's second offshore project has already created 100 high paying jobs in St. John's and should bring 100 more here as soon as the 300 to 400 million-barrel Terra Nova project is sanctioned by its owners in a week or two. That's a year earlier than Calgary-based Petro-Canada and its partners had proposed for bringing platform engineering jobs into the country, says the head of the Canada - Newfoundland Offshore Petroleum Board, and it's proof the Atlantic accord is doing its job. The first condition in the CNOPB's approval document released last week is that engineers be moved here "as soon as practicable," said the board's acting chairman, John Fitzgerald. Terra Nova's major alliance partner, Brown and Root Energy Services Ltd., employs about 200 engineers and support staff at its offices in Leatherhead, England for the design of the floating production facility. About half are expected to be brought over from Leatherhead and the consortium has advertised locally for at least another 20 engineers. The move is expected to bring a quick measure of economic relief to the St. John's economy. But the economic punch from those jobs should have been felt a year ago, says a Newfoundland offshore engineer now working outside the province. Engineers working fulltime on Terra Nova overseas are doing jobs that could have been done here, said the engineer, who asked not to be named. This is exactly the sort of work required to help create a base for an offshore industry, he added - only the earliest design work needed to be completed elsewhere. "As for the conceptual design, I believe we can't do that in Newfoundland, we're not set up to do that in Newfoundland yet. But the work they're doing at this point, there's no problem. They can do it in Newfoundland," he said. Terra Nova partners unveiled their ship-shaped, steel-hulled, floating platform design concepts more than a year ago, in December 1996. CNOPB's Fitzgerald confirmed that about 200 engineers and support staff were designing the project outside Canada - and that many would be finished their tasks before the project shifted across the Atlantic. But he said regulators can do nothing about it. "A good piece of it has been done, yes," Fitzgerald said in an interview. "(But) you can't really insist that somebody do something (here) until they decide that they're going to go forward with the project." The board did what it could, insisting work be brought to Newfoundland upon sanction, he said. In addition to Leatherhead, a small amount of work is being carried out in Houston, Paris and in Norway. "What they had said in their application is that they would complete their engineering, the primary engineering work, at these foreign locations and then move the carry-over work back to Newfoundland in about a year's time," Fitzgerald said. "What we said to them was `well that's not good enough, you have to do better than that." Terra Nova spokeswoman Mona Rossiter could not say exactly how many jobs would be relocated here but that it would be fewer than 180. The consortium, made up of Petro-Canada, Mobil Oil Canada, Husky Oil, Norsk Hydro, Murphy Oil and Mosbacher Operating, will have a better idea of employment figures after sanction, she said. Minister of Mines and Energy Chuck Furey said he was satisfied jobs would migrate here soon after project sanction and was told by Terra Nova officials four weeks ago that work done to date represents only six per cent of the project. Furey said he expects a significant portion of topsides work will be done here through the Terra Nova Alliance. (The platform hull is to be constructed in South Korea by Daewoo Heavy Industries Ltd.) "I'd like to see more technology transfer, you always like to see that," Furey said. "That's why companies have been out there beating the bushes for the last 10 to 12 years, forming strategic alliances and joint ventures, that kind of thing, so that foreign companies aren't just coming in and taking work. "(Technology transfer) is happening. Now, it's not happening to the degree that I'd like it to happen. You can't have it all in one shot," he said. But the Newfoundland engineer said regulators must find a way to bring design work to the province sooner. "Just look when Hibernia was going, you'd go downtown for lunch and in every restaurant you go to, there's somebody there who's working on the (Hibernia) project," he said. Newfoundland should follow the Norwegian example, he said. "The Norwegians brought in a lot of Texans in the early days and now they're the leaders in the world." FEATURE STORY Oil Capital Spending Plans Remain Intact, For Now Alarmed by the drop in oil prices to nearly four-year lows and by warnings from energy service company Schlumberger Ltd (SLB), shares in the sector tumbled again on Friday after Thursday's losses. However, the oil majors and industry watchers said that it was premature to predict that spending on exploration and production will slip in line with the $4.00-per-barrel drop in U.S. crude oil prices, to below $16, in the last few months. Among oil service companies, Schlumberger, which on Thursday tiggered the selloff when it said that spending plans could be modified due to the Asian crisis, lost 15/16 to 70-5/8. For the big drillers, Falcon Drilling Co Inc (FLC) was the biggest loser, down 9/16 at 28-13/16. However, none of the big oil companies was relying on rising oil prices to lift earnings and many have costed their spending at levels even lower than the present sub-$16 level, the sources said. Chevron Corp. (CHV) reaffirmed its commitment to a $400 million increase in capital spending to $6.3 billion when it reported earnings on Thursday. The San Francisco-based major will spend almost $4.0 billion on exploration and production spending. ''We plan our projects on the basis of $18.00-$21.00 oil, but we test them down to $15.00 and at this point in time we are committed to our capital spending plans,'' Mike Libbey, a spokesman for Chevron, said. A survey from Arthur Andersen LLP in October showed that 77 percent of oil and gas companies planned to increase E&P capital spending in 1998. ''If it ($16.00 oil) continues to be a short-term situation, it is very likely that capital plans of exploration and production companies will not be affected,'' said Jim Petrie, senior manager for the consultancy's energy practice. ''However, if it lasts longer, say six to nine months, you could see capital spending plans reduced,'' he added. Texaco Inc. (TX) aims to double its earnings over five years to 2001, helped by a growth in hydrocarbon production to 1.75 million barrels of oil equivalent from 1.19 million in 1997. To this end, Texaco raised its 1998 capital budget to $3.8 billion from $3.5 billion in 1997, chief executive Peter Bijur told the company's annual analysts' meeting in December. ''Texaco has no current plans to alter its capital spending as a result of lower oil prices, but if this trend continues, we could modicfy the timing of projects,'' said a spokeswoman for the company on Friday. She added that Texaco tested projects at $15.00 oil. Salomon Smith Barney's annual survey of capital spending plans predicted a 10.9 percent rise in worldwide exploration and production spending from 1997's $84.6 billion. ''An unusually large number of respondents plan on spending more than cashflow, indicating that spending plans are increasingly based on a multi-year outlook rather than near-term conditions,'' analysts Geoff Kieburtz and Mark Urness said. They noted that the average oil price assumptions had fallen to $19.23 per barrel for 1998 from $19.67 in 1997, and that some projects were tested as low as $12.00. Despite lower prices, evidence is that oil companies are still stumping up for long-term contracts for drilling rigs. On Friday, Oryx Energy Co. (ORX) entered two five-year deals for deepwater rigs to drill in the Gulf of Mexico. John O'Keefe, a spokesman for Oryx, said that the rig supply situation remains extremely tight. ''The only way to give yourself any confidence is to sign up for a long term,'' he said. According to driller Global Marine Inc. (GLM), lower oil prices actually stimulate demand for hydrocarbons and thus demand for rigs. It notes that the excess oil production worldwide is near a historic low, just two percent of the total. Global Marine says that in order to meet a rising demand, production would have to rise by 30 million barrels of oil per day by 2006, in addition to a further 25 million barrels per day that will be required to offset field declines. All of this will keep demand for rigs strong and should support rising dayrates. Oil companies are now paying $165,000 per day for a semisubersible rig, up from $32,000 in 1993 and are paying 80,000 per day for jackup rigs, up from $24,000, according to Global Marine. MARKET ACTIVITY U.S. NOTES The decline in oil prices is not going to spare the energy sector, which is 8 or 9 percent of the S&P." Crude oil today slid a further 30 cents per barrel to $15.74, preventing any bounce in the hurting oil-service sector. Drillers and oil-service stocks had another bad day. Halliburton gave up 7/16 to 43 1/16 despite reporting fourth-quarter earnings of 56 cents per share, 2 cents better than the 25-analyst estimate and up from the year-ago 43 cents. Elsewhere, Smith International lost 2 1/2 to 47, Transocean Offshore lost 1 to 39 1/16, Cliffs Drilling lost 9/16 to 39 7/16 and Schlumberger lost 1 5/16 to 70 1/4. Continued

To: Crocodile who wrote (8661)	1/27/1998 12:55:00 AM
From: Crocodile	Read Replies (4) \| Respond to of 15196

MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING MONDAY, JANUARY 26, 1998 (1) Tuesday, January 27, 1998 Canadian stocks rose on speculation more banking mergers and acquisitions lie ahead. U.S. stocks were mixed as a crude oil rally spurred gains among producers The Toronto Stock Exchange 300 composite index rose 92.15 points, or 1.4%, to 6583.14, with banks accounting for almost 60 points of the advance. ÿ The benchmark index has gained on four of the past 11 trading days. ÿ More than 137.3 million shares, valued at more than $2.8 billion, changed hands on the TSE, up from 132.6 million shares traded on Friday. Still, 56 companies touched 52-week lows compared with 24 companies that hit 52-week highs. ÿ Canada's Big Six banks powered the TSE's advance after Royal Bank of Canada said Friday it will acquire Bank of Montreal to create the country's largest financial institution. ÿ Royal Bank (RY/TSE) rose $2.25 to $78 while Bank of Montreal (BMO/TSE) climbed $2.50 to $70.20. ÿ Canadian Imperial Bank of Commerce (CM/TSE) rose $2.45 to $40.75 and Bank of Nova Scotia (BNS/TSE) gained $4.15 to $65.65. ÿ Norcen Energy Resources Inc. (NCN/TSE) was the most actively traded stock in Toronto after U.S.-based Union Pacific Resources Group Inc. said it will buy the petroleum company for $19.80 a share, or $3.5 billion in cash and assumed debt. ÿ Norcen gained $4.15 to $19.45 on volume of 20.1 million shares. The firm is 49.5% owned by Toronto-based Noranda Inc., which has agreed to sell its entire stake to Union Pacific. Noranda (NOR/TSE) gained 40› to $25.10. ÿ Nova Corp. was the second most active issue after Trans-Canada Pipelines Ltd. said it will buy the company for $7.12 billion, creating the fourth largest energy services company in North America. Nova (NVA/TSE) rose 20› to $15.05 on volume of 16.1 million shares while TransCanada (TRP/TSE) fell 5› to $30.30. ÿ Noranda and Rio Algom Ltd. (ROM/TSE), up $1.25 to $25.75, were also lifted by higher copper prices. Three-month forward copper on the New York Mercantile Exchange rose US$9 to US$1,757 a tonne as a weaker US$ made the base metal less expensive for buyers in foreign currencies. ÿ Avenor Inc. (AVR/TSE) gained $1.70 to $23.85, Abitibi-Consolidated Inc. (A/TSE) rose 70› to $19.95 and Donohue Inc. (DHCa/TSE) gained 75› to $26 to lead forest product stocks higher. ÿ Barrick Gold Corp. (ABX/TSE) gained 40› to $28.15 and Placer Dome Inc. (PDG/TSE) climbed 45› to $19.95 on concern a sex scandal may cripple U.S. President Bill Clinton's office. ÿ Investors bought gold stocks as a haven and abandoned some US$-denominated securities. ÿ Other Canadian markets closed higher. The Montreal Exchange portfolio rose 62.08 points, or 1.9%, to 3394.78. The Vancouver Stock Exchange rose 1.22 points, or 0.2%, to close at 591.02. For a scorecard of trading activity on all Canadian Stock Exchanges, go to: quote.yahoo.com . ÿ The Dow Jones industrial average rose 12.21 points, or 0.2%, to 7712.94. The Standard & Poor's 500 index fell 0.64 of a point to 956.95 and the Nasdaq composite index dropped 14.47 points, or 0.9%, to 1561.46. ÿ Declining stocks outnumbered advancers on the New York Stock Exchange where about 559.7 million shares changed hands, compared with 649.5 million shares traded on Friday. ÿ Exxon Corp. (XON/NYSE) gained US$1 3/16 to US$601 1/84 and Chevron Corp. (CHV/NYSE) rose US$1 9/16 to US$75 9/16 as the price of crude oil climbed on reports the U.S. is considering a military strike against Iraq because of its refusal to co-operate with United Nations weapons inspectors. ÿ Major overseas markets closed mixed. ÿ London: British stocks closed near the day's peak after staging an afternoon rally prompted by a firm opening on Wall Street. The FT-SE 100 index ended at 5237.2, up 55.8 points or 1.1%. ÿ Frankfurt: German shares fell. The Dax index closed at 4224.78, down 12.53 points or 0.3%. ÿ Tokyo: Japanese stocks rose, with the main average closing above 17,000 points for the first time this year. The 225-share Nikkei average climbed to 17,073.33, up 284.22 points or 1.7%. ÿ Hong Kong: Stocks closed higher, spurred by gains in the futures market ahead of the expiry of the January Hang Seng index contract, but brokers said sentiment remained cautious. The Hang Seng index rose 53.66 points, or 0.6%, to 8973.86, after hitting a high of 9278.82 ÿ Sydney: The stock market was closed for the Australia Day holiday. On Friday the all ordinaries index closed up 23.9 points at 2623.3. ********************************************************************************* Market Eye For sale signs go up on industry at large -- By WILLIAM HANLEY Who's next? With Royal Bank of Canada "merging" with Bank of Montreal in a $40-billion deal, TransCanada PipeLines Ltd. and Nova Corp. teaming up for $14 billion, Compaq Computer Corp. paying US$9.6 billion for Digital Equipment Corp. and Union Pacific Resources Group Inc. spending $3.7 billion on Norcen Energy Resources Ltd., mergers and acquisitions mania is in the air. Or maybe it's something in the water. ÿ In 1997, the total dollar value of M&A activity in Canada topped $100 billion for the first time. And U.S.-led companies spent a record US$333 billion to acquire firms in other countries last year. ÿ Everything, it seems, is for sale at the right price, regulators and miffed finance ministers notwithstanding. Armies of merchant bankers are stalking corporate corridors in search of synergies (and fat fees) from the relentless restructuring and realignment of business worldwide. ÿ We caught up with David Mongeau, the personable, lanky lawyer who heads the CIBC Wood Gundy Securities Inc. global M&A team, last week before the Royal Bank-BMO bombshell hit the Street, proving no deal is too big. ÿ Mongeau was quietly relishing the success Wood Gundy had finally achieved in a much more modest assignment: Boliden Ltd.'s $520-million takeover of Westmin Resources Ltd., which Gundy led from start to finish. ÿ He is not about to tip his hand on other M&A&D (for divestitures) deals Gundy is pursuing. But he is willing to identify the trends and themes he and his team see emerging this year: * Favorable economic conditions in Canada will prompt foreign bargain-hunting because the low C$ will help us look cheap. * Activity will be spurred by low interest rates, a strong stock market and ample capital. * Consolidation will accelerate as leading companies seize the opportunity to make large, strategic acquisitions to expand operations in the global economy. * Real estate, financial services, forestry and mining will drive activity. * Opportunities will arise for stronger-performing income trusts to acquire weaker ones. ÿ Mongeau says that M&A is now accepted in corporate cultures, such as Germany where it was once shunned. "People will not automatically say 'no' to a deal." ÿ He believes merger activity in the various sectors moves in cycles. Real estate and mining will present opportunities this year even though they are at different stages of their individual business cycles. ÿ Mongeau, who formerly worked in acquisitions for Four Seasons Hotels Inc., sees the hotel industry, which is recovering nicely, as possible fertile ground for good deals this year. ÿ In mining, for instance, he sees the Bre-X scandal and the resulting decline in available public markets capital for junior explorers triggering consolidations and asset shuffling that will favor low-cost producers. ÿ In the energy sector, Mongeau expects many international players to seek strategic positions in the rapidly expanding heavy oil sector. Meantime, the pressure to maintain growth of assets in the oilpatch will further speed the move toward consolidation. ÿ As for specific cases, Inco Ltd.'s poison pill would not likely be an impediment to a takeover, merely buying the company more time - not protection - from a hostile bid. ÿ And the Wood Gundy team expects Rogers Communications Inc. may have to sell assets and/or shares and/or restructure to improve share performance and cut its debts. ÿ Trying to divine the next takeover target can be a mug's game for investors. Obviously, the Royal Bank-BMO deal puts the financial services sector in the M&A spotlight. The feeling is that more deals will be unveiled in the next couple of months. ÿ Indeed, M&A has entered a bold new phase that puts a for sale sign on industry worldwide. ******************************************************************************** HOT STOCKS - Financia Post - Jill Vardy RIO ALGOM LTD. (ROM/TSE), up $1.25 to $25.75, on volume of 190,307 shares. The base-metal miner said it had purchased the remaining 50% of Crandon Mining Co. that it did not already own from Exxon Corp. for US$17.5 million. Crandon is a zinc-mine located in Wisconsin. ÿHowever, analysts said the deal was not big enough deal to move the stock. They speculate the driving force behind the rise is speculation that Noranda Inc. will purchase Rio Algom with proceeds from the sale of Norcen Energy Resources Ltd. NORTHERN TELECOM LTD. (NTL/TSE), down $2.85 to $57.65, on volume of 527,421 shares. ÿThe telecommunication equipment maker's shares have slipped 14.5% this year. ÿThe company today is expected to report fourth-quarter 1997 earnings of US74› a share by a consensus of 34 analysts polled by First Call Inc., compared with US62› a share a year ago. The same analysts expect Nortel to post earnings of US$1.54 a share for 1997, up from $1.20 a share in 1996. ÿHowever, analysts expect the company's gross margins to dip to about 41%, compared to Lucent Technologies Inc.'s recently announced 48% margins.ÿMerrill Lynch & Co. analyst Joseph Bellace lowered his near-term rating on the stock to "neutral" from "accumulate", but still retains a long-term "buy" rating. BANK OF MONTREAL (BMO/TSE), up $2.50 to $70.20, on volume of 5.2 million shares. Royal Bank of Canada (RY/TSE), up $2.25 to $78, on volume of 2.3 million shares. Bank of Nova Scotia (BNS/TSE), up $4.15 to $65.65, on volume of 1.7 million shares. Toronto Dominion Bank (TD/TSE), up $2.50 to $57.25, on volume of 2.2 million shares. ÿThe Toronto Stock Exchange financial services subindex rose another 319.43 points, or 4%, on continued reaction to Friday's news of the merger of Royal and B of M. Speculation is growing that there will be further consolidation in the sector. MICROSOFT CORP. (MSFT/nasdaq), up US$3 1/2 to US$141 3/4, on heavy volume of 9.3 million shares. ÿThe software giant said it will split its stock for the seventh time since going public in 1986. ÿShareholders of record on Feb. 6 will be eligible for the two-for-one split, which will leave the firm with about 2.4 billion outstanding shares. JDS FITEL (JDS/TSE), down $2.50 to $73.25, on volume of 81,815 shares. ÿThe Nepean, Ont-based manufacturer of communications equipment said its board had approved a three-for-one stock split. ÿThe split is still subject to shareholder approval and will be voted on at a special meeting March 30. ÿIf the split is approved the number of common shares outstanding will rise to 76.5 million from 25.5 million. CALL-NET ENTERPRISES INC. (CN/TSE), up 50› to $20.25, on volume of 14,100 shares. ÿThe long-distance telephone provider was rated "outperform" by Morgan Stanley Dean Witter Discovery Co., who initiated coverage on the stock. ÿ"People are realizing there is still a lot of value in this company and it was way oversold," said Kaan Oran of First Marathon Securities Ltd. ÿOran said he is considering re-evaluating his "hold" rating, even though the company's earnings will be depressed in the near-term by its foray into the local telephone market. BARRICK GOLD CORP. (ABX/TSE), up 40› to $28.15, on volume of 2.9 million shares. Placer Dome Inc. (PDG/TSE), up 45› to $19.95, on volume of 2.6 million shares. ÿThe shares of gold producers gained as bullion climbed to more than US$300 an ounce intraday. However, bullion fell back in the afternoon to close the session down US$3.10 at $296.80 an ounce. ÿThe TSE gold and precious mineral subindex rose 101.94 points, or 1.5%, to 6817.23. ÿAfter the market closed, Placer said it will write down by $247 million, or 99› a share after tax and minority interests, assets which have been hurt by the current low gold price. ALI TECHNOLOGIES INC. (ALT/TSE), up 50› to $15.80, on volume of 19,650 shares. ÿThe shares climbed $2.30 to a 52-week intraday high of $17.60 before falling back. ÿShares of the Richmond, B.C.-based developer of filmless diagnostic imaging software have climbed steadily from a 52-week low of $4.50 a year ago. ****************************************************************************** North America to provide shelter from Asian turmoil -- By SONITA HORVITCH Toronto-based Indago Capital Management Inc. has modest expectations of the North American equity market, said John Vipond, partner Canadian equities. ÿ In light of events in Asia, he and colleague Diane Haflidson, partner foreign equities, who looks after the U.S. portfolios, are focusing on companies with a North American emphasis. ÿ Both money managers note that the full impact on North American economies from the turmoil in the Pacific Rim has yet to be felt. ÿ But it is likely, for the time being, to translate into lower or stable U.S. interest rates, said Haflidson. "This has helped to set the bond market on fire," she noted. ÿ Indago's asset allocation for an "average risk" pension fund portfolio is 5% in cash, 43% in bonds, 18% in foreign equities and 34% in Canadian equities, said Indago president Jock Fleming. ÿ Haflidson noted that her emphasis on domestic U.S. companies implies more of a mid-cap bias (US$3 billion to US$7 billion). Her stock picks include: ÿ * USA Waste Services Inc. (UW/NYSE), which closed recently at US$35 and has a 52-week trading range of US$44 1/8 to US$29 1/2. The Houston-based company provides solid waste management services in the U.S., Canada, Mexico and Puerto Rico. "This company has been on an aggressive takeover strategy but is sticking to its knitting," said Haflidson. It is conservatively expected to generate earnings growth of 20% to 25% a year. The stock is trading at around 17 times expected 1999 earnings per share, so it fits her strategy of looking for companies with "growth at a reasonable stock price." Her 12-month target price on the stock is US$45 to US$50. ÿ * Hasbro Inc. (HAS/amex) US$33 1/4 (US$36 1/2-US$22 7/8). ÿBased in Pawtucket, R.I., the company makes and sells toys. It is a restructuring story, she said. The company is focusing on its core products, reducing its labor costs and divesting itself of unprofitable businesses. It is also putting more money into interactive media products to better exploit its licensing agreements. This stock is a switch from Mattel Inc. (MAT/NYSE) US$39 7/8 (US$42 1/4- ÿUS$23 3/8), another toymaker and her selection in this column Dec. 14, 1996, at US$31 1/8. Hasbro is trading at 14 times expected 1999 earnings against a multiple of 17 for Mattel, so Hasbro could enjoy some multiple expansion, said Haflidson. ÿIn keeping with her concerns about major U.S. multinationals, Haflidson has sold Colgate Palmolive Co. (CL/NYSE) US$69 1/4 (US$78 5/8-US$46 5/8). "It was a great stock in 1997, but the valuations are now lofty and there will be a negative translation impact from the strong US$." ÿ In the Canadian equity portfolio, Vipond has been emphasizing pipeline stocks. His top picks are TransCanada PipeLines Ltd. (TRP/TSE) $30.35 ($33.05-$23.90), which yesterday announced plans to merge with Nova Corp. to create the fourth largest energy services company in North America, and Westcoast Energy Inc. (W/TSE) $33.60 ($34.15-$22.65). TransCanada and Westcoast have a high dividend yield and a high price-to-book ratio relative to the Toronto Stock Exchange 300 composite index. ÿ Looking among the beaten down cyclicals, Vipond sees an opportunity in Potash Corp.of Saskatchewan Inc. (POT/TSE) $115.50 ($122.20-$98.50). He argues that Asian countries will continue to buy fertilizer as they will want to maintain exports of food products. His earnings estimate for 1998 is US$7 a share, which means that the stock is trading around 11 times projected earnings. "It is a very well-managed company." ÿ Vipond continues to like consumer products producer CCL Industries Inc. (CCQ/TSE) $17.30 ($19-$14.50), his selection in this column Nov. 14 at $19. He also continues to champion long-standing favorite Laidlaw Inc. (LDM/TSE) $19.90 ($22.90-$17.70) with its bus and health-care transportation business. ÿHis "sell" is methanol producer Methanex Corp. (MX/TSE) $11.20 ($14.40-$10.50). ÿAlthough the commodity price has held up well, it is unlikely to continue to do so, he said. ÿ"There is new capacity coming on stream that will not help the price of this commodity." ******************************************************************************* *******************************************************************************