Most Canadian stocks gained as energy stocks rose after an acquisition in the shale-gas industry and gold futures rallied with concern over European government debt.
Talisman Energy Inc. (TLM), which produces oil and gas in North America, the North Sea and Indonesia, advanced 4.8 percent after agreeing to sell shale-gas assets to Sasol Ltd. Toronto-Dominion Bank, the country’s second-largest lender by assets, fell 2.3 percent after three people with knowledge of the matter said it is close to an agreement to buy Chrysler Financial. Goldcorp Inc. (G), the world’s second-largest gold producer by market value, increased 1.4 percent.
The Standard & Poor’s/TSX Composite Index (SPTSX) lost 8.18 points, or 0.1 percent, to 13,193.28. Among S&P/TSX stocks, 140 gained, 93 fell and 11 were unchanged.
The Talisman deal “is positive for Canadian stocks,” said Mathieu Roy, who helps manage C$1.5 billion ($1.47 billion) as a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick. “It suggests the money’s there to develop. A lot of Canadian companies with North American resources can grow them more quickly because they won’t have any trouble finding partners.”
The index slipped 0.3 percent last week as gold futures declined and Bank of Montreal (BMO) announced the $4.1 billion purchase of Milwaukee-based lender Marshall & Ilsley Corp. Financial and natural resources companies make up 76 percent of Canadian stocks by market value, according to Bloomberg data. The index increased 12 percent this year through Dec. 17.
Talisman climbed 4.8 percent, the most in 14 months, to C$21.89 after agreeing to sell a 50 percent stake in its Farrell Creek shale-gas assets to Johannesburg-based Sasol for C$1.05 billion ($1.04 billion). The advance extended a 29-month high.
Progress Energy Resources Corp., which also owns shale-gas projects in western Canada, surged 8 percent, the most in 14 months, to C$11.93. Shale-gas developer Questerre Energy Corp. (QEC) soared 18 percent to C$1.68.
Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, increased 0.9 percent to C$36.64 after Greg M. Pardy, an analyst at Royal Bank of Canada, raised his 12-month share-price estimate to C$46 from C$43. On Dec. 17, Suncor announced the C$1.75 billion ($1.72 billion) sale of stakes in two oil-sands projects to Total SA.
The S&P/TSX Financials Index retreated for a fifth day, the longest streak since June, as TD and BMO slipped.
TD dropped 2.3 percent to C$70.52 after the report that it will buy Chrysler Financial, the lender once owned by automaker Chrysler, as soon as tomorrow. The three people with knowledge of the matter spoke on condition of anonymity because the talks are private.
BMO, Canada’s fourth-biggest bank, lost 2.4 percent to C$56.60 after analysts at Cormark Securities Inc. and Barclays Plc lowered their ratings on the shares. John Aiken, the Barclays analyst, told clients in a note that the M&I acquisition “will dampen absolute and relative profitability for several years.”
BMO sank 6.5 percent on Dec. 17 after announcing what would be the third-largest purchase of a U.S. company by a Canadian bank or insurer.
S&P/TSX gold stocks gained the most in two weeks as the yield on Irish 10-year government bonds increased for a third day and the euro retreated against 15 of 16 other major currencies. On Dec. 17, Moody’s Investors Service cut Ireland’s credit rating.
Barrick Gold Corp. (ABX), the world’s largest gold producer, advanced 0.5 percent to C$52.65. Goldcorp increased for the first time in seven days, climbing 1.4 percent to C$45.59. Agnico-Eagle Mines Ltd. (AEM), Canada’s No. 5 producer by total revenue, rallied 2.1 percent to C$78.04.
OceanaGold Corp. (OGC), which mines in New Zealand, rose 8.6 percent to C$3.92 after Ian Preston, an analyst at Goldman Sachs Group Inc., gave the company a “buy” rating in new coverage.
NovaGold Resources Inc., which is developing gold and base-metals properties in Alaska and British Columbia, gained 6.1 percent to C$14.86. The company offered to buy Copper Canyon Resources Ltd., which owns 40 percent of a NovaGold joint venture, in a deal NovaGold valued at C$34.1 million.
Paramount Gold and Silver Corp. (PZG), which explores for precious metals in Mexico, jumped 19 percent to a record C$3.24. The shares have surged 75 percent since Dec. 9, the day before the company announced what it called “the most significant discovery to date” at its San Miguel project.
Uranium One Inc., the uranium producer in which Moscow-based ARMZ Uranium Holding is buying a controlling stake, advanced 6.7 percent to $4.64.
Bart Jaworski, an analyst at Raymond James Financial Inc., raised his rating on the stock to “outperform” from “market perform.” In a note to clients, Jaworski cited recent share-price declines and “increased geographical diversification.”
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