Bloomberg News

Canadian Stocks Rise as Copper Gains: Financial Companies Drop

November 15, 2011

Nov. 15 (Bloomberg) -- Canadian stocks rose less than 0.1 percent as base-metals producers gained after copper advanced for a third day, offsetting the effect of Europe’s debt crisis on financial stocks.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, advanced 2.4 percent as copper advanced for a third day. Royal Bank of Canada, the country’s largest lender by assets, dropped 1.1 percent as bond yields increased in Italy, Spain and France. Research In Motion Ltd., the BlackBerry maker, climbed 5 percent after an analyst at Northern Securities Inc. boosted his rating on the shares.

The Standard & Poor’s/TSX Composite Index rose 5.08 points to 12,229.27 at 4 p.m. Toronto time after slipping as much as 0.6 percent earlier.

“Right now we’re in a state of suspense,” Timothy Lazaris, chief executive officer of Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees C$55 million ($54 million). “We need better visibility about what’s about to happen in Europe.”

The index has declined 2.3 percent since Oct. 28 as financial and energy stocks retreated on concern that the European debt crisis will weaken the global economy and Manulife Financial Corp. and Sun Life Financial Inc. reported quarterly losses. The S&P/TSX is heading for its first yearly decrease since 2008 and second in the past nine years.

Retail Sales

Base-metals producers advanced as copper gained after the U.S. reported a bigger gain in October retail sales than most economists in a Bloomberg survey had forecast. The Federal Reserve Bank of New York’s regional manufacturing index increased, contrary to most economists’ estimates.

Teck Resources Ltd., Canada’s largest company in the industry, climbed 2.4 percent to C$38.90 after Anthony Young, an analyst at Dahlman Rose & Co., began coverage of the company with a “buy” rating. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in Mongolia’s Oyu Tolgoi project, rose 4.8 percent to C$22.53. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, rallied 2.7 percent to C$19.05.

Gold producers gained as precious metals advanced on demand for havens from the European debt crisis. Barrick Gold Corp., the world’s largest producer of the metal, advanced 0.6 percent to C$53.42. Eldorado Gold Corp., Canada’s fifth-biggest gold producer by market value, increased 1.1 percent to C$19.55. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, climbed 6.4 percent to C$21.31.

Forecast Cut

Avion Gold Corp., which mines in Africa, sank 13 percent, the most since August 2010, to C$1.90 after cutting its 2011 production forecast.

The cost to insure Italian, Spanish and French bonds against default rose to records today as Mario Monti, Italy’s prime minister-designate, faced resistance in his attempts to include politicians in his so-called technical Cabinet. The euro fell for a second day against the U.S. dollar.

Royal Bank dropped 1.1 percent to C$45.40. Manulife, North America’s fourth-biggest insurer, lost 1.9 percent to C$11.77. Sun Life, Canada’s third-largest insurance company, declined 1.5 percent to C$21.03 after closing at the lowest since March 2009 yesterday.

RIM advanced 5 percent to C$19.54 after Sameet Kanade, an analyst at Northern Securities, raised his rating on the shares to “speculative buy” from “sell.” In a note to clients, Kanade cited potential negative news such as a decline in subscribers has already been factored into the share price.

Bullish Bets

Options traders boosted bullish bets on Research In Motion’s U.S. stock to the highest since 2007, convinced the shares will rebound from a 69 percent plunge this year through yesterday that left them trading below book value. Traders are probably betting the Waterloo, Ontario-based company will receive a buyout offer, said Bahl & Gaynor Investment Counsel’s Matt McCormick.

Auto-parts maker Martinrea International Inc. surged 8.1 percent to C$7.57 after forecasting higher profit for the year than analysts in a Bloomberg survey had estimated. The company also said it will buy back as many as 4.16 million shares.

Westport Innovations Inc., a developer of technology for natural-gas engines, jumped 8.7 percent to C$31.76 after three U.S. senators introduced a bill to provide tax credits for vehicles that run on the fuel.

Imris Inc., which develops medical-imaging technology, tumbled 17 percent, the since February 2009, to C$2.70 after saying it had a loss of 19 Canadian cents a share in the third quarter. Analysts had estimated a loss of 5 Canadian cents a share, excluding certain items, according to the average forecast in a Bloomberg survey.

--With assistance from Jeff Kearns and Cecile Vannucci in New York and Hugo Miller in Toronto. Editor: Stephen Kleege

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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