By John Kipphoff
Dec. 8 (Bloomberg) -- Canadian stocks rose the most this month, led by resource and bank shares, as oil, metals and grains appreciated on speculation the biggest U.S. public works spending plan since the 1950s will boost demand for commodities.
Potash Corp. of Saskatchewan Inc. jumped a record 14 percent and EnCana Corp. rose 9 percent, pacing energy producers’ and miners’ rebound from three days of decline. Toronto-Dominion Bank jumped more than 5 percent, leading finance shares higher. BCE Inc. surged as much as 31 percent after it received an auditor’s opinion that company would be solvent after its C$52 billion leveraged buyout.
The Standard & Poor’s/TSX Composite Index rose 5.6 percent to 8,567.12 in Toronto, the most this month, after losing 12 percent last week when oil had its biggest drop since 1991.
“Stocks are already discounting a huge amount of economic decline,” David Cockfield, who helps oversee about $2 billion as a portfolio manager at Leon Frazer & Associates in Toronto. “Authorities are throwing trillions of dollars at the system to make sure we don’t go into a depression. If you’re sitting on some cash, this is probably a good time to dip into the market.
Stocks rallied worldwide on U.S. President-elect Barack Obama’s pledge to boost investment in infrastructure to create or preserve 2.5 million jobs. A report last week showed U.S. employers cut 533,000 workers last month, adding to concern that a recession in the U.S., Canada’s biggest trade partner, is getting worse. U.S. lawmakers were also working today to reach an agreement on aid to automakers.
Oil, Copper
Oil rose for the first time in seven days, adding 7.1 percent to $43.71 a barrel in New York. Oil has slid more than $103 from a record in July. Copper jumped 9.1 percent to $1.498 a pound and gold added 2.3 percent to $769.30 an ounce. Corn rose the most in more than five weeks in Chicago.
Potash, the largest maker of fertilizer, added C$9.49, or 14 percent, to C$76.99, the biggest increase since at least November 1989. Barrick Gold Corp., the largest bullion mining company in the world, advanced 7.1 percent to C$34.35. Smaller rival Goldcorp Inc. added 8.2 percent to C$30.12. Teck Cominco Ltd., Canada’s biggest diversified mining company, rose 8.1 percent to C$4.25.
EnCana, Canada’s largest energy company by market value, added 9.3 percent to C$55.61, its biggest gain since Nov. 21. Suncor Energy Inc., the world’s second-largest oil-sands producer, rose 6.6 percent to C$23.30. Canadian Oil Sands Trust, the biggest tarsands miner, gained 12 percent to C$21.97. Canadian Natural Resources Ltd. climbed 7.3 percent to C$42.20.
Measures of raw-materials and energy shares added 9.2 percent and 6.7 percent, paring their respective declines this year to 43 percent and 39 percent.
Annual Drop
The S&P/TSX, which gets almost three-quarters of its value from energy, mining and finance shares, has still fallen 38 percent in 2008, poised for its worst annual drop, as the U.S., Europe and Japan entered recessions, curbing global demand for commodities, which account for about half of Canada’s exports
“Commodities have been grossly oversold,” Cockfield said. “There’s some positive feeling out there today and some people are willing to step in. Maybe we’re through the worst. Mind you, we’ve had a number of false starts already.”
Toronto-Dominion rose 5.3 percent to C$45.50. Canada’s second-largest bank reported a 7.3 percent drop in fourth- quarter profit to C$1.01 billion ($800.5 million) last week on losses from credit trading investments, and sold as much as C$1.38 billion in new stock to shore up capital.
Royal Bank of Canada climbed 3 percent to C$37.50.
‘Action List’
Canadian Imperial Bank of Commerce advanced 7.1 percent to C$53.27. The country’s fifth-largest lender, which also reported results last week, was raised to “action list buy” from “buy” at TD Newcrest. CIBC’s writedowns in the fourth quarter were smaller than “feared,” TD Newcrest analyst Jason Bilodeau in Toronto wrote in an e-mailed note.
“Coming out of the quarter the bank appears to be well capitalized and we believe that the worst, although not all, of the writedowns are behind us,” Bilodeau wrote.
Laurentian Bank of Canada gained 11 percent to C$36.50. Investors should buy the stock, recommended Merrill Lynch & Co. analyst Sumit Malhotra, citing a “spectacular 2008,” which saw the bank report better-than-expected profit and declining bad loans in the fourth quarter.
BCE rose C$1.80, or 7.9 percent to C$24.65. Earlier the stock surged as much C$7.15, or 31 percent, for its steepest intraday gain in at least 25 years.
The pending acquisition hinges on an auditor’s determination that the combined company would be viable after the scheduled close on Dec. 11. The assessment, from PricewaterhouseCoopers LLP, is contrary to an analysis by rival accounting firm KPMG LLC last month.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
Posts
No comments:
Post a Comment