A Republican victory in Congress has increased the likelihood of passing the Keystone XL crude oil pipeline project, bolstering Canadian energy stocks and country-specific exchange traded funds.
The Guggenheim Canadian Energy Income Fund (NYSEArca: ENY) jumped 3.2% Wednesday.
Broad Canada stock ETFs also strengthened Wednesday, with the iShares MSCI Canada ETF (NYSEArca: EWC) rising 1.6% and First Trust Canada AlphaDEX Fund (NYSEArca: FCAN) increase 2.5%. EWC includes a 23.3% tilt toward energy stocks and FCAN’s portfolio holds 37.5% in energy.
Additionally, the IndexIQ Canada Small Cap ETF (NYSEArca: CNDA) was up 0.8% Wednesday while iShares MSCI Canada Small Cap Index Fund (BATS: EWCS) was 0.6% higher. CNDA has a 36.3% position in the energy sector and EWCS holds 25.4% in energy stocks.
Republican Senator John Hoeven believes the Republican majority will likely introduce a stand-alone legislation in the first quarter of 2015 to approve the Keystone XL pipeline from Canada, Reuters reports.
“I think Keystone will be one of the first bills we’ll be able to put up in the new Congress,” Hoeven said in the article. “I’ve got a bill right now that’s got about 56 cosponsors. And with the election results, we’ll have over 60 who clearly support the legislation.”
Polls show that as many as two-thirds of Americans support the pipeline, and the entire Republican caucus, along with a dozen Senate Democrats, support the Keystone project, Fox reports.
However, the President still has veto power unless 67 senators support the bill. Currently, about 61 senators support the project.