Cenovus stock sale another perfect example of capital flight from Canada: Canoe's Tahmazian
Canada needs to end in-fighting over its energy industry and focus on the foreign capital fleeing the country, according to one portfolio manager.
Canoe Financial’s Rafi Tahmazian said reports that surfaced Monday about ConocoPhillips possibly selling its stake in Cenovus should set off alarm bells in the oil patch.
“The problem is, we have a country battling and fighting and disagreeing and we’re not addressing that,” Tahmazian told BNN Bloomberg in an interview. “And, we have foreign money [that] has already run out of the country and left.”
Reuters reported on Monday that ConocoPhillips could sell its stake in Cenovus - acquired as part of a 2017 asset sale - in June or early July, but possibly as late as September.
“That’s companies saying ‘we’ve got these massive holdings in Canadian companies’ ... They’re saying ‘we could put that money to work in much better jurisdictions than this,’ and they’re taking the money elsewhere. That’s the problem we have today.”
Tahmazian also targeted Finance Minister Bill Morneau and his recent defence of the current investment climate in Canada. Last month Morneau told BNN Bloomberg that he would not accept the idea that Canada is not competitive.
“This government keeps celebrating all the things they do and they don’t come clean about the problems that they created to have to celebrate their new deal,” Tahmazian said. “They need to start talking truth to people, come clean, be open and honest about the problems.”
Still, Tahmazian said that Canadian players may see some benefit when companies like ConocoPhillips and Shell make the decision to pull out.
“I’m glad it’s out of the way, then, if [the Cenovus sale] gets done,” Tahmazian said. “Same with the [Canadian Natural Resources] block. Those are Canadian companies that need to work within the gyrations of the global market and the Canadian market issues. Having this overhang is always a burden on companies like that. So, it’s healthy.”
“But, the message it sends, that companies want to get out of here and move their money elsewhere, is bad.”