Canada Stocks Rebound, Led by Manulife, Barrick Gold, EnCana

By John Kipphoff

Oct. 28 (Bloomberg) -- Canadian stocks rebounded from their steepest drop in 21 years, led by commodity and financial companies, as investors took advantage of the cheapest share valuations on record.

EnCana Corp. and Barrick Gold Corp. paced gains among energy and materials producers. Manulife Financial Corp. rallied, leading finance shares higher after the Canadian regulator said it may give insurers relief on capital requirements. Rogers Communications Inc. and Canadian Pacific Railway Ltd. advanced on better-than-expected profit reports.

The Standard & Poor's/TSX Composite Index rose 7.2 percent to 9,151.63 in Toronto, the biggest gain in a week. Canada's main stock benchmark dropped 8.1 percent yesterday, its worst slide since October 1987's ``Black Monday,'' on speculation the credit crisis will cause more losses at financial companies and a global recession will curb demand for Canada's commodities.

``Things got overdone yesterday,'' said Doug Davis, president of Davis-Rea Ltd., which manages C$450 million in Toronto. ``Some people are seeing bargains. But one day does not a trend make.''

Stocks in the S&P/TSX yesterday traded at an average of 9.73 times earnings for the past 12 months, the lowest multiple since Bloomberg started tracking the figure in 1994. The S&P/TSX is down 35 percent in 2008.

EnCana, the nation's biggest energy company, gained 8.7 percent today to C$55.50. Canadian Natural Resources Ltd. added 11 percent to C$51.48. Suncor Energy Inc., the second-largest oil-sands mining company, added 9.6 percent to C$25.40.

Exceeds Estimates

TransCanada Corp. advanced 5.6 percent to C$34.44. The owner of Canada's largest pipeline system reported third-quarter profit of 63 cents a share before one-time items, exceeding the average estimate of analyst estimates by 17 percent.

Barrick Gold, the biggest bullion mining company in the world, climbed 17 percent to C$26.26. Goldcorp Inc., the second- largest by market value, increased 10 percent to C$20.65.

Agnico-Eagles Mines Ltd., owner of Canada's biggest gold deposit, added 11 percent to C$30.58, recovering half of yesterday's 19 percent drop. Potash Corp. of Saskatchewan Inc., the biggest fertilizer maker by market value, rose 9.9 percent to C$89.89.

Copper, corn and natural gas prices rose, helping the Reuters/Jefferies CRB Index of 19 commodities to a second day of gains. The measure is still down about 28 percent this year.

Materials Producers

A measure of materials stocks climbed 9.8 percent today, paring its October loss to 38 percent. The group led the S&P/TSX to a record in June along with energy stocks, as commodities peaked. It has led the index lower since then, losing 59 percent while the S&P/TSX slid 39 percent. Energy shares, which rose 7.3 percent today, have fallen by almost half since June 18. Finance companies, up 6.7 percent today, have lost more than one-fifth of their value.

Manulife rose 11 percent to C$23.49, the most in two weeks. Canada's biggest insurance company dropped 15 percent yesterday, the most ever, on analyst reports that suggested Manulife and Sun Life Financial Inc. might have to raise billions of dollars in fresh capital to bolster balance sheets after global equities plunged. Sun Life, the country's third-biggest insurer, advanced 14 percent to C$30.06.

Toronto-Dominion Bank, Canada's second-largest lender, rose 5.4 percent to C$54.79 even after being downgraded by Dundee Securities analyst John Aiken, who predicted that Canadian banks' per-share profits will shrink by 15 percent on average in the current quarter from a year earlier.

`Sell' Rating

Bigger rival Royal Bank of Canada, which was cut to ``sell'' from ``buy'' by Aiken, added 5.9 percent to C$45.

Rogers rose 10 percent to C$32, the most in six years. Canada's largest wireless carrier posted third-quarter profit, excluding some costs, of 73 cents a share, beating the 51-cent estimate of analysts in a Bloomberg poll.

Canadian Pacific gained 16 percent to C$50.35 the most since it began trading in 2001. The country's second-largest railroad said third-quarter net income before certain one-time items fell to C$1.20 a share from C$1.23. That exceeded the C$1.14 average estimate of 9 analysts surveyed by Bloomberg.

Research In Motion Ltd. rose 11 percent to C$60.44, the most in five weeks. Shares of the BlackBerry e-mail phone maker opened today's trading at 13.8 times their profit in the past 12 months, the lowest ever and five times cheaper than a year ago.

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