Feb 1, 2018
TSX starts 2018 as the fourth-worst performing global market
The TSX Composite staggered badly out of the gate in 2018, falling nearly 1.6 per cent to post the fourth-worst performance to start the year among 93 global exchanges. The Canadian benchmark index is slotted between Oman’s exchange and London’s FTSE 100, as some of the usual suspects weighed on the TSX.
Worst performing sectors:
Energy: -5.46 per cent
Telecom: -4.54 per cent
Utilities: -4.53 per cent
The TSX Energy index was the biggest drag on the market, extending its losses from 2017. Much like last year, general weakness in natural gas prices is to blame, as crude has held steady above the US$60 per barrel mark. A pair of rate-sensitive sectors round out the bottom three; telecoms and utilities both posted more than a four per cent decline. Those sectors typically come under selling pressure in a rising-rate environment as investors look to other options in the fixed-income market in their hunt for yield.
Worst performing stocks:
Pretium Resources: -40.31 per cent
Crew Energy: -28.57 per cent
Corus Entertainment: -27.86 per cent
Advantage Oil & Gas: -26.85 per cent
Peyto Exploration: -25.35 per cent
In spite of the energy sector weakness, the lead laggard on the TSX in January was actually a gold company. Pretium Resources has had a disastrous start to 2018, as shares of the company tanked in the wake of disappointing fourth quarter results. Gold output was reported 12,000 ounces shy of the prior quarter at its Brucejack mine, and recoveries cratered, prompting a downgrade from Credit Suisse.
Familiar names populate two of the bottom five slots, as natural gas plays Crew Energy and Peyto exploration extended their rock bottom returns of 2017. The pair was joined by gas-weighted Advantage Oil & Gas as the Canadian benchmark AECO gas price languished.
Corus Entertainment joined the quartet as the only non-resource company in the bottom five. The company missed first quarter earnings expectations amid a tough television advertising environment, prompting a trio of analyst downgrades. The distributor of HGTV Canada, the W Network and Showcase made a massive bet on the future of television just two years ago, when it announced a deal to buy Shaw Media for $2.65 billion.