Canadian Stocks Gain as Gold, Oil Advance; Manulife Rallies

Canadian stocks rose to a four- month high as gold and oil prices gained and Manulife Financial Corp. advanced after Desjardins Securities Inc. boosted its rating on the shares.

Kinross Gold Corp., Canada’s third-biggest producer, climbed 2 percent as the metal rallied on speculation the U.S. Federal Reserve may consider more measures to keep borrowing costs low. Cenovus Energy Inc., Canada’s seventh-largest energy company by market value, rose 1.9 percent as crude oil futures added 1.6 percent, the first gain in five days. Manulife, North America’s third-biggest insurer, increased 3.8 percent after analyst Michael Goldberg at Desjardins Securities raised his rating on the company to “buy” from “hold.”

The Standard & Poor’s/TSX Composite Index advanced 69.95 points, or 0.6 percent, to 12,234.51, the highest since April 26.

“Gold is continuing to reflect the potential weakness of the U.S. dollar, and we have oil back, which certainly helps,” said David Cockfield, who helps oversee C$300 million ($292 million) as a money manager at MacNicol & Associates Asset Management Inc. in Toronto. “People are looking at the amount of money being printed and thinking there are more U.S. dollars around than there should be.”

The S&P/TSX has surged 5.9 percent since Aug. 24 as gold futures climbed 3.7 percent to a record high and economic data from the U.S. allayed concerns that the economy may dip back into recession.

Dollar Drops

Gold futures rose for a third day, gaining 0.3 percent to $1,280.80 an ounce. The U.S. dollar dropped against 14 of 16 other major currencies after touching a five-week low against the euro last week on speculation the Federal Open Market Committee will say tomorrow that it’s considering more measures to keep borrowing costs low as American unemployment remains at its highest since the 1980s.

“Because unemployment has been very sticky, the feeling is more has to be done,” said Irwin Michael, who helps manage about C$1 billion as a money manager at ABC Group of Funds in Toronto.

Kinross gained 2 percent to C$19.31. Goldcorp Inc., Canada’s second-largest gold producer, advanced 2 percent to C$44.91. Barrick Gold Corp., the world’s largest producer by revenue, climbed 0.6 percent to C$47.80.

The S&P 500 rose 1.5 percent after Lennar Corp., the third- largest U.S. homebuilder, beat analysts’ earnings estimates and International Business Machines Corp. said it would buy business software maker Netezza Corp. for $1.7 billion.

Cenovus climbed 1.9 percent to C$28.41. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, increased 0.9 percent to C$34.58.

Drilling Technology

Petrobank Energy and Resources Ltd., which produces oil and gas in Canada and Colombia, jumped 3.7 percent to C$40.22 after Barron’s said the company may rally as production increases in its oil-sand fields and demand for its efficient drilling technology expands.

Ivanhoe Energy Inc., which, like Petrobank, is developing technology to make heavy oil production more economically efficient, surged 6.6 percent to C$1.77 to lead the S&P/TSX.

Ivanhoe Mines Ltd. climbed for a sixth day, increasing 5.4 percent from a record close to C$22.13. Ivanhoe Mines has rallied 19 percent since Sept. 10, the last trading day before it announced Rio Tinto Group’s stake in the company had increased to 35 percent. Ivanhoe Mines’ chairman, Robert Friedland, is co-chairman and chief executive officer of Ivanhoe Energy.

Rating Raised

Manulife Financial Corp. gained for the first time in five days, advancing 3.8 percent to C$13.48. Desjardins Securities’ Goldberg raised his rating on the company to “buy” today after demoting it two notches to “hold” last month. In a note to clients, he cited the company’s efforts to reduce its sensitivity to equity markets. Manulife has soared 15 percent since Aug. 26 after falling to a 17-month low.

Open Text Corp., Canada’s biggest software maker, climbed 5.8 percent to C$48.45 after receiving a “buy” rating in new coverage from Richard Tse of Cormark Securities Inc.

Chartwell Seniors Housing Real Estate Investment Trust, which owns retirement and long-term-care homes in Canada, rallied 3.6 percent to C$8.61. In a note dated Sept. 17, Pammi Bir, an analyst at Bank of Nova Scotia, said Ontario is “highly unlikely” to try to freeze or suspend shareholder payouts at for-profit seniors’ residences.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.