Bloomberg News

Canadian Stocks Climb as Natural Gas Futures Gain, Banks Rally

November 29, 2011

Nov. 29 (Bloomberg) -- Canadian stocks rose for a second day as energy stocks gained with natural gas futures on forecasts for colder temperatures in the northern U.S. and banks and Research In Motion Ltd. rallied.

Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, advanced 3.3 percent. Royal Bank of Canada, the country’s biggest lender by assets, increased 1.6 percent after the U.S. Conference Board reported higher consumer confidence. RIM, the BlackBerry maker, climbed 5.8 percent after an analyst at Sanford C. Bernstein & Co. raised his rating on the shares.

The Standard & Poor’s/TSX Composite Index rose 92.29 points, or 0.8 percent, to 11,732.50.

“Natural gas seems to have a little bit of life, and oil, no matter what the economy seems to be doing, stays around $100” a barrel, Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview. The firm oversees about C$1.7 billion ($1.7 billion). “That’s good for Canadian companies.”

The S&P/TSX surged 1.6 percent yesterday after falling each of the previous four weeks, the longest streak of weekly drops since July 2008. The index has fluctuated with developments in the European debt crisis this quarter as concern that problems in Greece, Italy and Spain will hurt the global economy has overshadowed growth in Canadian companies’ profits.

Energy stocks advanced after AccuWeather Inc. forecast below-normal temperatures for New York and Chicago. Crude oil increased for a third day on the U.S. consumer confidence report.

Oil, Gas Producers

Canadian Natural climbed 3.3 percent to C$36.35. Suncor Energy Inc., the country’s largest oil and gas producer, rose 1.5 percent to C$29.35. Athabasca Oil Sands Corp., PetroChina Co.’s partner in oil-sands development, jumped 5.1 percent to C$11.63.

Nexen Inc., an oil and gas producer with operations on five continents, advanced 4.5 percent to C$15.95 after agreeing to sell a 40 percent stake in British Columbia shale-gas fields to Tokyo-based Inpex Corp. and JGC Corp.

Canada’s seven largest banks each climbed after the New York-based Conference Board said its index of consumer confidence rose more than all 70 economist forecasts in a Bloomberg survey.

Royal Bank gained 1.6 percent to C$45.01. Toronto-Dominion Bank, its biggest domestic rival, increased 1.1 percent to C$69.63. Bank of Montreal, Canada’s fourth-largest lender by assets, advanced 1.2 percent to C$57.41.

Rating Raised

RIM climbed 5.8 percent to C$18 after Pierre Ferragu, an analyst at Bernstein, raised his rating on the stock to “market perform” from “underperform.” The shares had plunged 71 percent this year through yesterday.

“As the failure of RIM’s current strategy becomes more obvious, we see shareholder activism leading to a change in management and a takeover -- or at least the anticipation of it,” Ferragu wrote in a note to clients.

Shares also rallied after Alan Panezic, vice president of platform product management said in an interview that RIM will offer companies software to support competing smartphones. Laszlo Birinyi, founder of Westport, Connecticut-based Birinyi Associates Inc., recommended RIM shares in an interview on CNBC.

Raw-materials producers in the S&P/TSX rose as the U.S. dollar fell against all other major currencies and gold and copper gained.

Goldcorp Inc., the world’s second-biggest gold producer, advanced 1 percent to C$51.24. San Gold Corp., which operates in Manitoba, rallied 10 percent to C$1.80 after closing at the lowest since April 2009 yesterday. SouthGobi Resources Ltd., which mines coal in Mongolia, rose 7.6 percent to C$7.21.

Mercator Minerals Ltd., a copper and molybdenum producer, surged 9.8 percent to C$1.68. Jeffrey Woolley, an analyst at Paradigm Capital Inc., began coverage of the company with a “buy” rating in a note dated yesterday.

--With assistance from Hugo Miller in Toronto. Editors: Jeff Sutherland, 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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