Bloomberg News

Canadian Stocks Decline on Chinese Exports Data

March 12, 2012

Canadian stocks fell for the first time in four days as fuels and metals dropped after China reported a smaller gain in exports than most economists in a Bloomberg survey had forecast.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, lost 3.1 percent as the fuels declined on the New York Mercantile Exchange. Goldcorp Inc. (G), the world’s second-biggest gold producer by market value, decreased 1.4 percent as precious metals retreated. Viterra Inc. (VT), Canada’s largest grain handler, rose 6.4 percent after an analyst at Bank of Montreal said the company may be bought for as much as C$17.50 a share.

The S&P/TSX Composite Index (SPTSX) slipped 75.61 points, or 0.6 percent, to 12,428.01.

“There’s been a number of cautionary straws in the wind, such as the slowdown in China: How deep is it?” Bob Decker, a money manager at Aurion Capital in Toronto, said in a telephone interview. The firm oversees about $5.5 billion. “If you’re looking for growth, and equity markets typically live and die on growth, you’re going to have to see it somewhere, and emerging markets are where most people are expecting a resumption of growth to be most robust.”

The index fell 1.8 percent in the previous two weeks in its first back-to-back weekly decline since Dec. 16 as commodity producers dropped with the prices of oil, natural gas and precious metals. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.

Missing Forecasts

Chinese exports increased 18 percent in February from a year earlier, the country’s customs bureau said March 10. Economists had forecast a gain of 31 percent, according to the median estimate in a Bloomberg survey. China also reported smaller-than-forecast increases in retail sales and industrial production for February last week.

Crude oil futures retreated for the first time in four days, while natural gas slipped on forecasts for above-normal temperatures in the U.S.

Suncor lost 3.1 percent to C$33.19. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, decreased 3.1 percent to C$34.40. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, slipped 2.6 percent to C$21.86.

Precious-metals producers in the S&P/TSX retreated as gold and silver fell on the Comex in New York. Barrick Gold Corp. (ABX), the world’s largest gold-mining company, dropped 0.4 percent to C$45.29, extending its streak of losses to nine days. Goldcorp declined 1.4 percent to C$46.25. New Gold Inc. (NGD), which mines in Mexico, the U.S. and Australia, slumped 4.9 percent to C$10.06.

Junior Gold Index

China Gold International Resources Corp. soared 19 percent, the most since October 2009, to C$4.56. The surge probably reflects Van Eck Associates Corp.’s increase in China Gold’s weighting in the Market Vectors Junior Gold Miners Index, which is used for a $2.41 billion exchange-traded fund, Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview. Xu’s firm oversees about C$1.7 billion ($1.7 billion).

Base-metals companies retreated after the data release from China, the world’s largest user of the commodities. Teck Resources Ltd. (TCK/B), Canada’s biggest company in the industry, lost 2.9 percent to C$35.48. Copper, zinc and gold producer HudBay Minerals Inc. (HBM) decreased 5.6 percent to C$11.49.

SouthGobi Resources Ltd. (SGQ), which mines coal in Mongolia for Chinese steel mills, fell 9.9 percent to C$6.19 after S&P said it will cut the stock from the S&P/TSX.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, fell 2.1 percent to C$42.75. China was the fourth-biggest importer of Canadian fertilizer in 2011, according to Statistics Canada.

Viterra advanced 6.4 percent to C$14.45 after surging 24 percent March 9, when it said it had “received expressions of interest from third parties.”

The company may sell for C$14.50 a share to C$17.50 a share, Kenneth B. Zaslow, an analyst at BMO, wrote in a note to clients today. Glencore International Plc, the world’s largest publicly traded commodities supplier, is among the companies that expressed an interest in a potential offer for Regina, Saskatchewan-based Viterra, according to a person familiar with the situation who declined to be identified because the details haven’t been made public.

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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