Canada Stocks Rise, Led by Manulife, Agnico-Eagle; Rogers Drops

By John Kipphoff

Dec. 12 (Bloomberg) -- Canadian stocks rose, extending a weekly gain, as raw-materials producers and finance companies advanced after the U.S. government said it may rescue carmakers with money from a bank bailout fund.

Manulife Financial Corp. gained on an upgrade from CIBC World Markets, a gay after it completed a capital raising. Gold producers including Agnico-Eagle Mines Ltd. rose as the metal capped its best weekly gain in almost three months. Rogers Communications Inc. slid on a regulator’s decision, pacing a drop in phone shares.

Canada’s main stock index initially dropped after the U.S. Senate voted down $14 billion in aid for the three biggest automakers, stoking concern they’ll go bankrupt and deepen the recession in the country’s biggest export market.

“We should have been down 500 points today on the Big Three,” said Andrew Martyn, who helps manage about C$450 million at Toronto-based Davis-Rea Ltd. “There’s a better tone to the market. Bad news isn’t pushing it down so much anymore. Expectations are pretty low after a wretched September, October and November.”

The Standard & Poor’s/TSX Composite Index rose 1.5 percent to 8,515.45 in Toronto. The main benchmark for Canadian stocks rose 4.9 percent this week as commodity prices rallied, lifting raw-materials and energy shares, which account for more than two-fifths of its value.

The S&P/TSX is still poised for a 38 percent drop in 2008.

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Manulife Financial rose 10 percent to C$20.92, its steepest gain in two weeks. The stock was raised to “sector outperformer” from “sector performer” by Darko Mihelic an analyst at CIBC World Markets. Canada’s biggest insurance company closed a C$2.28 billion ($1.82 billion) share sale yesterday to shore up capital after falling stock investments led to its first quarterly loss in nine years as a public company.

“In the end, it is still Manulife. Maybe a little battered and bruised, but it’s still Manulife,” Mihelic, based in Toronto, wrote in a note. “Earnings visibility is poor for Q4/08 and even 2009 (and every time equity markets fall we’ll probably cringe a little), however, this company is now well capitalized, very well reserved and has a clean balance sheet.”

Royal Bank of Canada, the nation’s biggest lender, added 2.5 percent to C$34.80. Toronto-Dominion Bank, the second- largest, added 2.8 percent to C$41.64.

Gold fell today and closed the week up 9.1 percent for its steepest weekly advance since mid-September.

Miners Advance

Agnico-Eagle, owner of Canada’s biggest gold deposit, added 8.1 percent to C$48.51. Kinross Gold Corp., Canada’s third- largest bullion producer, added 6.1 percent to C$20.49. Goldcorp Inc. added 3.5 percent to C$34.79. Barrick Gold Corp., the world’s biggest gold producer, rose 2.7 percent to C$38.91

Gold mining companies led a measure of raw-materials producers 3.7 percent higher today. The group completed a 22 percent weekly gain, its best since at least 1995.

“Gold and gold stocks are the best asset class now,” Martyn said. “The Americans are printing money like it’s going out of style. Ultimately, gold’s a store of value.”

General Motors Corp. dropped 37 percent in New York trading before paring its loss after the White House said it might finance an industry rescue with funds set aside for banks. Finance Minister Jim Flaherty said the Canadian government is considering aid to carmakers even after the Senate rejection of the bailout plan.

Parts Suppliers

Martinrea International Inc., Canada’ second-biggest auto parts supplier, slid 4 percent to C$1.94, the lowest price since June 1997.

Magna International Inc., North America’s biggest car- parts maker, rose 1 cent to C$35.51 after dropping as much as 12 percent earlier.

Rogers fell 3.1 percent to C$32.91. Canada’s biggest cable television and internet provider slid after the Canadian Radio- television and Telecommunications Commission yesterday ordered the nation’s bigger phone companies to offer internet speeds to resellers that are as fast as those of their own services.

Manitoba Telecom Services Inc., Canada’s third-largest land-line telephone company, fell 6.4 percent to C$35.40, its biggest drop since Match 2004.

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