MORNING NEWS CALL

TOP NEWS • Canada's Encana widens North America reach with $5.5 billion Newfield deal Canada's Encana Corp said it would buy Newfield Exploration for $5.5 billion, for greater access to North America's biggest oil patch- es and making it one of the largest shale oil producers in the region. • Canadian Natural's third-quarter profit beats on higher prices, output Canadian Natural Resources Ltd's quarterly profit more than doubled and beat analysts' estimates on Thursday, helped by higher production and average realized prices. • DowDuPont sales rise 10 percent, announces $3 billion share buyback DowDuPont Inc's third-quarter sales rose 10 percent, led by stronger demand for chemicals used in cosmetics, paints and packaging gear. • Shell accelerates share buybacks as profits soar Royal Dutch Shell's profits soared to a four-year high in the third quarter, boosted by rising oil and gas prices as the company acceler- ated its giant $25 billion share buyback programme. • Strong demand for wireless service drives BCE profit beat Canadian telecom services provider BCE said it added more wireless subscribers in the third quarter, helping it beat analysts' profit estimates.

BEFORE THE BELL Futures for Canada's main stock index were trading flat ahead of a slew of corporate earnings, with energy shares coming under pressure from lower oil prices. U.S. stock futures were higher, a day after the S&P 500 closed out its worst month in seven years. Strong corporate results pushed European shares higher. Stocks in China rose for the third straight day, while Japan's Nikkei bucked the trend and slipped following two days of big gains. The pound jumped on reports that Britain and the European Union are close to a post-Brexit deal on financial services. Gold recovered from a three-week low hit in the previous session. Data on manufac- turing activities is due for release later in the day.

STOCKS TO WATCH Deals Of The Day • Encana Corp (ECA). The Canadian oil and gas producer said it will buy Newfield Exploration Co in an all-stock deal valued at about $5.5 billion. Encana said it intends to raise dividend by 25 percent and expand its share buyback program to C$1.5 billion. Separately, the Calgary, Alberta-based company said total production rose 33 percent to 378,200 barrels of oil equivalent per day in the third- quarter ended .

Results • BCE Inc (BCE). The company reported a 1.4 percent rise in quarterly profit, as more subscribers signed up for its wireless services. -based BCE's net income attributable to shareholders increased to C$814 million or 90 Canadian cents per share in the third quarter, from C$803 million or 90 Canadian cents per share, a year earlier. • Canadian Natural Resources Ltd (CNQ). The oil and gas producer’s quarterly profit more than doubled, helped by higher produc- tion and average realized prices. The company said net income rose to C$1.80 billion, or C$1.47 per share, in the third quarter ended, from C$684 million, or 56 Canadian cents, a year earlier. Overall daily production rose 2 percent to 1.06 million barrels of oil equiva- lent per day. • Suncor Energy Inc (SU). Canada's second-largest energy producer reported a higher third-quarter profit on better oil prices and increased refinery margins, along with higher sales and output. The company's operating profit, which excludes one-time items, was C$1.6 billion, or 96 Canadian cents per share, in the quarter ended, up from C$867 million, or 52 Canadian cents per share, in the year-ago period. That was slightly above the average analyst estimate of 95 Canadian cents per share, according to I/B/E/S data from Refinitiv. Net earnings were C$1.8 billion, or C$1.12 per share, in the third quarter, compared with net earnings of C$1.3 billion in the year-ago quarter, or 78 Canadian cents per share.

In Other News • TransCanada Corp (TRP). The company said on Wednesday it was moving ahead with a C$1.5 billion expansion of its Western Canadian gas pipeline system, further boosting access for producers in Alberta and British Columbia's rich gas plays. The latest in- vestment increases expansion spending on the NOVA Gas Transmission line to more than C$9 billion, TransCanada said. The ex- pansion, which will connect producers in the gas-rich Montney and Deep Basin regions with industrial customers in Alberta, is under- pinned by roughly 1.1 billion cubic feet per day (bcfd) of new service contracts, TransCanada said. Construction on the 197 kilometer pipeline could start as soon as the third quarter of 2020, pending regulatory approvals.

COLUMN Why Trump’s Iran sanctions will fail The next round of economic sanctions on Iran, which will start going into effect on Nov.4, will mainly target the country’s oil and gas industries. These sanctions were eased after the 2015 signing of the Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal, but are being phased back in following President Donald Trump’s decision to withdraw from the accord six months ago.

ANALYSTS' RECOMMENDATION • Capstone Mining Corp (CS). CIBC cuts price target to C$1.15 from C$1.40 saying that it expects the company to incur higher op- erating costs and lower throughput in 2019 in its Pinto Valley mine as well as maintenance expenses for the Minto mine. • Open Text Corp (OTEX). Barclays raises target price to C$63 from C$62 following the company’s first-quarter fiscal 2019 results, which were largely in line, helped by growth in cloud and support businesses.

2 ECONOMIC EVENTS (All timings in U.S. Eastern Time) 0930 Markit Manufacturing PMI SA for Oct: Prior 54.8

COMPANIES REPORTING RESULTS November 01: BCE Inc (BCE). Expected Q3 earnings of 93 Canadian cents per share Canadian Natural Resources Ltd (CNQ). Expected Q3 earnings of 90 Canadian cents per share Encana Corp (ECA). Expected Q3 earnings of 13 cents per share Excellon Resources Inc (EXN). Expected Q3 earnings of 1 cent per share Fairfax Financial Holdings Ltd (FFH). Expected Q3 earnings of 9.50 cents per share Activewear Inc (GIL). Expected Q3 earnings of 58 cents per share MEG Energy Corp (MEG). Expected Q3 loss of 8 Canadian cents per share Norbord Inc (OSB). Expected Q3 earnings of $1.10 per share Pembina Pipeline Corp (PPL). Expected Q3 earnings of 60 Canadian cents per share Saputo Inc (SAP). Expected Q2 earnings of 44 Canadian cents per share Snc-Lavalin Group Inc (SNC). Expected Q3 earnings of 67 Canadian cents per share TransCanada Corp (TRP). Expected Q3 earnings of 78 Canadian cents per share Whitecap Resources Inc (WCP). Expected Q3 earnings of 11 Canadian cents per share

November 02: Cameco Corp (CCO). Expected Q3 earnings of 3 Canadian cents per share Dorel Industries Inc (DIIb). Expected Q3 earnings of 37 cents per share Fortis Inc (FTS). Expected Q3 earnings of 63 Canadian cents per share Hydrogenics Corp (HYG). Expected Q3 loss of 7 cents per share IGM Financial Inc (IGM). Expected Q3 earnings of 85 Canadian cents per share Imperial Oil Ltd (IMO). Expected Q3 earnings of 85 Canadian cents per share

CORPORATE EVENTS (All timings in U.S. Eastern Time) 0800 BCE Inc (BCE). Q3 earnings conference call 0830 Gildan Activewear Inc (GIL). Q3 earnings conference call 0900 Encana Corp (ECA). Q3 earnings conference call 0900 Resolute Forest Products Inc (RFP). Q3 earnings conference call 0930 Suncor Energy Inc (SU). Q3 earnings conference call 1000 Great-West Lifeco Inc (GWO). Q3 earnings conference call 1000 Hudbay Minerals Inc (HBM). Q3 earnings conference call 1000 MEG Energy Corp (MEG). Q3 earnings conference call 1000 TransCanada Corp (TRP). Q3 earnings conference call 1100 Canadian Natural Resources Ltd (CNQ). Q3 earnings conference call 1100 Inc & Cogeco Communications Inc (CCA). Q4 earnings conference call 1100 Norbord Inc (OSB). Q3 earnings conference call 1100 Whitecap Resources Inc (WCP). Q3 earnings conference call 1330 Snc-Lavalin Group Inc (SNC). Q3 earnings conference call 1430 Saputo Inc (SAP). Q2 earnings conference call

EXDIVIDENDS No major exdividends are scheduled.

(All analysts' estimates are according to Thomson Reuters I/B/E/S)

3 PICTURE OF THE DAY

Canada's Prime Minister Justin Trudeau meeting people wearing the face masks of Muppets characters Waldorf and Statler during a caucus meeting on Hallowe'en Day in Ottawa, Ontario, Canada, October 31. Courtesy Adam Scotti/Prime Minister's Office/Handout via REUTERS

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