Fairfax, Sun Life Financial May Advance; Goldcorp May Decline

By John Kipphoff

Sept. 23 (Bloomberg) -- Fairfax Financial Holdings Ltd. and Sun Life Financial Inc. may rise, based on bids on the Toronto Stock Exchange, on a report that the two insurance companies may bid for parts of American International Group Inc.

Canadian National Railway Co. may gain as Goldman Sachs Group Inc. recommended the shares because the company is experiencing the best growth in freight volume among North America's biggest railroads. Goldcorp Inc. may decline along with the price of the precious metal.

The Standard & Poor's/TSX Composite Index declined 2.1 percent to 12,638.07 yesterday in Toronto.

Fairfax may advance C$16.45 to C$338, bids already submitted in Toronto showed. Sun Life may gain C$1.64 to C$38. The two companies have joined Manulife Financial Corp. among insurers that may bid for parts of American International, the Globe and Mail reported, citing a person it didn't name. AIG may get $115 billion selling units to help repay a $85 billion rescue loan from the Federal Reserve, analysts at Credit Suisse Group AG estimated.

Manulife, Canada's largest insurer, may climb C$1.08 to C$37.48, bids suggested.

Canadian National may add 5 cents to C$52.80.

Goldcorp may slip 48 cents to C$36.82, bids showed.

Gold had its first drop in three trading sessions in London as crude-oil prices fell, easing demand for the metal as an inflation hedge.

U.S. stock-index futures fell and shares in Europe and Asia retreated as Federal Reserve Chairman Ben S. Bernanke told Congress that failure to enact a plan to rid banks of bad assets would threaten markets and the economy.

To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.