Canada Stocks Fall to 3-Week Low as Manulife, Goldcorp Decline

By John Kipphoff

Nov. 17 (Bloomberg) -- Canada's main stock index fell to a three-week low, led by finance and commodity companies, after Citigroup Inc. announced 50,000 job cuts and Japan entered a recession.

Manulife Financial Corp. led finance companies to the lowest in almost 4 ½ years after CIBC World Markets cut its share-price target for Canada's biggest insurer. Goldcorp Inc. and EnCana Corp. paced drop in commodity producers after oil and metal prices slid and UBS AG predicted lower prices next year for all but four of 28 raw materials that it forecasts. Research In Motion Ltd. rose, ending a five-day slump.

``The recession will be long on Main Street,'' said Pierre Bernard, who co-manages about $1 billion at Clarington Capital Management Inc. in Montreal. ``I'm trying to take advantage of the pessimism and buy here and there. But you can't fight the tape. Commodities went too high and now they're going too low.''

The Standard & Poor's/TSX Composite Index dropped 2.9 percent to 8,795.45 in Toronto, the lowest closing level since Oct. 27. The S&P/TSX, which gets almost three-quarters of its value from mining, energy and finance shares, has slid 42 percent from a June peak as global credit losses approached $1 trillion and commodities slumped.

New York-based Citigroup, which lost $20 billion in the last four quarters, plans to cut more than 50,000 jobs and reduce expenses by 20 percent from their peak. Japan, the second-biggest economy, slid into a recession in the third quarter, the first since 2001, a report showed. The Federal Reserve Bank of New York's general economic index fell to the lowest level since records began in 2001.

The U.S. and Japan are Canada's two biggest export markets.

`Disappointing' Results

Manulife retreated 8.8 percent to C$21.06. Canadian life insurance companies had ``disappointing'' third-quarter results as poor equity market performance and credit losses reduced earnings, CIBC World Markets analyst Darko Mihelic wrote in an e-mailed note to clients. He lowered Manulife's share-price target by 14 percent to C$31.

Sun Life Financial Inc., which had its share estimate cut 13 percent to C$34 by Mihelic, slid 6 percent to C$23.65.

Royal Bank of Canada, the nation's biggest lender, dropped 2.6 percent to C$43.36. Toronto-Dominion Bank, the second- largest bank, slid 3.4 percent to C$51.75. Bank of Montreal decreased 3.7 percent to C$39.90. Canadian Imperial Bank of Commerce fell 1.7 percent to C$51.86.

Bank of Montreal and Canadian Imperial may be the most ``adversely affected'' among Canadian lenders by calls emerging from the Group of 20 leaders meeting for higher capital standards and stronger risk management at banks, said Michael Goldberg, a Desjardins Securities analyst.

Industry Indexes

A gauge of financial companies dropped 3.9 percent to 1,247.82, the lowest since May 2004. Measures of raw-materials and energy shares fell 3.5 percent and 2.9 percent, respectively.

EnCana, Canada's biggest energy company by market value, fell 5.9 percent to C$51.50. Canadian Oil Sands Trust, lead partner in the largest tarsands producer, fell 3.3 percent to C$25.61.

Petro-Canada slid 6.5 percent to C$23.95. The country's third-largest oil company delayed a C$25.3 billion ($20.6 billion) oil-sands mining project because of rising costs and falling oil prices. Partner UTS Energy Corp. fell 12 percent to 80 cents. Another partner, Teck Cominco Ltd., gained 4.6 percent to C$6.64.

Crude oil for December delivery fell 3.7 percent to $54.95 a barrel in New York, the lowest close in 21 months, as Japan entered its first recession since 2001 and China's largest oil producer said demand had declined ``sharply.'' Prices have tumbled 63 percent from a July record.

Copper, Gold

Copper futures fell 2.8 percent in New York and gold retreated as the U.S. dollar rose, reducing commodities' appeal.

Goldcorp, the world's second-biggest bullion mining company by market value, dropped 7.5 percent to C$24.25. Larger rival Barrick Gold Corp. slid 3.9 percent to C$26.14. Agnico-Eagle Mines Ltd., the owner of Canada's biggest gold deposit, plunged 8.1 percent to C$36.79.

Agrium Inc., North America's third-biggest fertilizer company, retreated 5.9 percent to C$38.10.

Research In Motion gained 5 percent to C$51.60. The maker of the BlackBerry e-mail phone dropped 15 percent last week. Soros Fund Management LLC and Citadel LP added shares of Research In Motion in the quarter ended Sept. 30, regulatory filings published Nov. 14 after markets closed showed.

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