Bloomberg News

Canadian Stocks Rise as Banks Advance, TMX Group Rallies

March 15, 2012

Canadian stocks rebounded from the biggest drop in a week as financial shares gained after U.S. economic data was better than forecast and Quebec said it plans to approve the takeover of the Toronto Stock Exchange’s owner.

TMX Group Inc. (X) gained 3.1 percent after the province’s financial markets authority said it plans to approve the proposed C$3.73 billion ($3.76 billion) purchase by Maple Group Acquisition Inc., a group of pension funds and banks. Royal Bank of Canada, the nation’s biggest lender, advanced 0.8 percent. China Gold International Resources Corp. increased 2.1 percent on speculation that low interest rates will spur investment in gold.

The S&P/TSX Composite Index (SPTSX) increased 77.92 points, or 0.6 percent, to 12,455.82 in Toronto.

“The approval of the TMX deal is certainly a plus,” Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, said in a telephone interview. The firm oversees about C$600 million. “Strength in the U.S. market, especially in financials, is also having a positive effect on the Canadian market today. It’s definitely helped the banks.”

The index has increased 1.3 percent since March 6, the day of its largest decline of the year, as stronger-than-forecast American jobs data and Greece’s debt restructuring helped offset concern over China’s lower growth target and Europe’s economic contraction. The U.S. accounted for 74 percent of Canada’s exports last year.

U.S. Data

Canadian banks and insurers rose after the Federal Reserve Bank of New York said manufacturing in the region expanded in March at the fastest pace since June 2010 and the Labor Department said claims for jobless benefits fell last week, matching the lowest level in four years. The Federal Reserve Bank of Philadelphia’s general economic index increased to 12.5 in March from 10.2 last month, beating economists’ estimates.

Royal Bank of Canada (RY) rose 0.8 percent to C$58.18. Bank of Nova Scotia (BNS), Canada’s third-biggest lender, advanced 2.1 percent to $55.35.

TMX Group gained 3.1 percent to C$45.09. Maple said today it was in discussions to extend its offer for Toronto-based TMX beyond the planned April 30 completion date as it pursues regulatory approval from provincial authorities and Canada’s Competition Bureau.

Materials stocks in the S&P/TSX rebounded from a three-day decline, led by gold companies, as futures for the precious metal rallied on signs that investors are stepping up purchases as an alternative to a weaker dollar.

China Gold, which focuses on Asian gold development and exploration, increased 2.1 percent to C$4.32. Barrick Gold Corp. (ABX), the world’s largest gold-mining company, rose 1.5 percent to C$43.54. Yamana Gold Inc. (YRI), Canada’s third-largest company in the industry by market value, gained 1.8 percent to C$15.60.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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


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