Energy ETFs impacted after Progress deal nixed: ETF Insight

In a surprise decision, Ottawa blocked the acquisition of Progress Energy by Petronas last week.

Read: Petronas deal blocked by federal government

And ETF Insight says this move will impact all energy funds, as markets reconsider the odds of the larger CNOOC acquisition of Nexen.

It predicts markets will examine funding for our capital-intensive energy sector, as well as reduce any premiums that might have been coming into play for other companies seen to be potential acquisition targets.

It also says the message from this decision is investors should always be cautious when investing, and should never act based solely on their personal market readings and predictions.

Read: 5 reasons why stock picking is dead and A better way to measure volatility

A quick look at Energy Sector ETFs shows exposure to Progress was generally low (ZEO: 0%; CLO: 0%; HEE: 0%; XEG: 1.33%; OXF: 3.90%), while holdings in Nexen are higher: (ZEO: 8.82%; CLO: 6.08%; XEG: 4.50%; OXF: 4.02%).

Read more on Ottawa’s decision to halt the Progress deal.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.