CANADA STOCKS-CIBC, RBC pull TSX lower; PrairieSky soars in debut

Thu May 29, 2014 5:23pm EDT

* TSX down 22.01 points, or 0.15 percent, at 14,588.95
    * Six of the 10 main index sectors advance
    * CIBC drops 1.4 percent after reporting results

    By John Tilak
    TORONTO, May 29 (Reuters) - Canada's main stock index closed
lower on Thursday, hurt by a decline in Canadian Imperial Bank
of Commerce after it reported quarterly results, while
Royal Bank of Canada and other major banks also fell.
    A jump in Encana Corp spinoff PrairieSky Royalty
Ltd, which had its trading debut, helped inject some
optimism into the market. Its initial public offering was the
second biggest in Canadian history.
    The stock closed at C$37. Encana said it sold 52 million
PrairieSky shares priced at C$28 to a group of underwriters led
by TD Securities Inc and CIBC.
    PrairieSky holds Encana's wholly owned lands in Western
Canada and its IPO raised C$1.46 billion ($1.35 billion). About
20 million shares changed hands on Thursday, making PrairieSky
the most heavily traded stock on the Toronto exchange.
 
     CIBC shares dropped 1.4 percent to C$97.68 after the bank's
second-quarter profit fell by nearly two-thirds, hurt by C$543
million in charges related to its Caribbean banking unit
. Overall, financials, the index's most heavily
weighted sector, fell 0.5 percent, with RBC losing 0.5 percent
to C$74.76. 
    Investors also digested figures showing that the U.S.
economy contracted in the first quarter for the first time in
three years. But separate data indicated the number of Americans
filing new claims for unemployment benefits fell more than
expected last week. 
    After a strong start to the year, the Toronto stock market's
 benchmark index is down on the month. It has fallen in the last
three sessions.
    "I expect short-term volatility," said Diana Avigdor,
portfolio manager and head of trading at Barometer Capital
Management.
    "Some energy shares are taking a bit of a breather," she
said, adding that investors with current positions in oil and
gas shares may not want to add to them until they see some
upward momentum.
    Avigdor said she was seeing strong international interest in
PrairieSky.
    "We like the natural gas market," she said. "The 4 percent
yield and the royalty production growth of 3-5 percent are
probably two of the most important metrics to this deal."
Barometer owns shares of PrairieSky.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 22.01 points, or 0.15 percent, at
14,588.95. Six of the 10 main sectors on the index were higher.
    Shares of energy companies edged higher, helped by stronger
oil prices. Canadian Natural Resources Ltd added 0.8
percent to C$44.28. Encana rose 1.2 percent to C$25.25.
    ($1=$1.08 Canadian)

 (Editing by Nick Zieminski; and Peter Galloway)
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