Market update, Tuesday November 26, 2013

By Musabbir Mazhar

In US, as housing permits data was released, the numbers for showed an increase at a peak level since June 2008. The number of building permits climbed in October by 6.2% to 1.034 million on a yearly basis. This is good news for the economy.  However, if interest rates rise in the near future, this will not be sustainable as mortgage rates would rise and borrowing would become expensive. Home prices in major cities also increased by 1% in September as indicated by S&P/Case-Shiller Index. This is the 20 city composite index which increased by Professor Dr. Robert Shiller – the index is up 13.3% year over year.

The S&P/TSX closed down 122.45 points to 13,349.77 points as the Materials and Financial sectors of the index were both down, 1.37% and 1.06% respectively. The S&P 500 ended slightly higher at 1802.75 (+0.01). DJIA was slightly changed at 16,072.80 on Tuesday (+0.26 points), still at record highs since the great recession. Nasdaq closed at 4,017.49 (+0.58%), at highest levels seen since 2000 – after the tech-bubble burst.

Anterra Energy Inc., listed on TSX Venture Exchange, announced a $12.1 million acquisition of oil properties/wells in Nipisi, Alberta. Anterra is a junior exploration and oil production company with a market cap of $7.39 Million, trading at C$0.03. The deal was all cash and little credit facilities used; and will close before Dec 20, 2013. The buy-sell agreement includes 17 oil producing oil wells producing 400 boe/d (barrels of oil equivalent per day). This gives Anterra increased stable production with the enlarged asset base in western Canada.

Yesterday, WTI crude fell as a temporary deal was reached over Iran Nuclear program restriction. WTI decreased to $94.09 by 75 cents (for January Delivery), currently trading at $92.64. The deal outlines restrictions on atomic programs in Iran and the country would benefit about $7 billion in withdrawn trade restrictions in the next 6 months. Brent Crude is at 111.28 (+0.36%) for Jan Delivery. The Brent-WTI spread went up to $16.91 on the deal news; Brent fell as much as 2.7% yesterday – which is understandable as tensions in international oil supply eased.