Canadian Stocks Rise as Encana, PetroChina Sign Joint Venture

Canadian stocks rose for the third time in four days, led by energy producers, after Encana Corp. agreed to a joint venture with PetroChina Co.

Encana, Canada’s biggest natural gas producer, advanced 4.5 percent after selling a 50 percent interest in some gas assets for C$5.4 billion ($5.4 billion). BlackBerry maker Research In Motion Ltd. increased 5.6 percent on speculation its forthcoming tablet computer will run applications designed for Google Inc.’s Android operating system. Manulife Financial Corp., North America’s fourth-largest insurer, slumped 5.1 percent after its fourth-quarter earnings missed the average analyst estimate.

The Standard & Poor’s/TSX Composite Index rose 56.27 points, or 0.4 percent, to 13,840.57.

The Encana deal “shows there is still interest officially from the Chinese for our resources,” said Jennifer Radman, who helps oversee about C$1 billion as a money manager at Caldwell Investment Management Ltd. in Toronto. “There was a disconnect between what this Chinese government is willing to pay and what the market is valuing these assets.”

After outgaining the S&P 500 each of the past seven years, the S&P/TSX has risen 3 percent this year, while its U.S. peer advanced 5.1 percent. A 4.4 percent decline in oil prices and 9.5 percent retreat in natural gas held back the Canadian equity benchmark. Energy companies make up 27 percent of Canadian stocks by market value.

Encana

Encana surged 4.5 percent, the most since June, to C$32.02 after announcing the joint venture with PetroChina, China’s largest energy producer. Shares of the Calgary-based company have increased 10 percent this year after falling 19 percent over the previous three years.

“Natural gas is one area which has been relatively dead for a few years,” said Pat McHugh, Canadian equity strategist for Manulife’s asset-management unit. “PetroChina, a fund with a long-term horizon, is basically saying this is a great opportunity. It’s a nice shot in the arm for Canada.”

Oil and gas producers with nearby assets advanced. Celtic Exploration Ltd. increased 5.1 percent to C$20.67. Progress Energy Resources Corp. jumped 8.4 percent, the most in 16 months, to C$14.43 after saying its reserve base expanded 63 percent last year.

Trilogy Energy Corp., another energy producer with operations in Alberta, soared a record 23 percent to C$18.18 after announcing drilling results it called a “success.”

Energy Companies

Other energy companies rose after the U.S. reported first- time jobless claims declined to a 31-month low last week.

Cenovus Energy Inc., Canada’s fifth-largest energy company, gained 2.9 percent to C$34.80. Canadian Natural Resources Ltd., Canada’s second-largest energy producer by market value, advanced 1.8 percent to C$44.22. Oil and gas producer Penn West Petroleum Ltd. increased for the first time in eight days, climbing 3 percent to C$26.25.

Nexen Inc., an oil and gas producer with operations on five continents, lost 3.9 percent to C$22.92 after saying production at its Long Lake oil-sands project declined last month. Todd Kepler, an analyst at Cormark Securities Inc., cut his rating on the shares to “market perform” from “buy”

Canada’s six biggest banks all climbed. Bank of Nova Scotia, the third-largest lender by assets, rose 2 percent to C$59.19, erasing a 1.9 percent loss from yesterday. Toronto- Dominion Bank, the No. 2 bank, gained 1 percent to C$78.52.

RIM, Potash

RIM surged 5.6 percent to an eight-month high of C$66.70 after three people familiar with the matter said the company is working on software to allow its PlayBook tablets to run Android applications. The people asked not to be identified because the effort isn’t public.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, advanced 1.9 percent to a 28-month high of C$184.71 after Jaret Anderson, an analyst at Salman Partners Inc., raised his rating on the shares to “buy” from “hold.”

Manulife, the owner of John Hancock Financial Services Inc., reported fourth-quarter profit of 38 Canadian cents a share, excluding certain items, missing the average of 11 analyst estimates by 8.4 percent.

Manulife declined 5.1 percent to C$17.95. Sun Life Financial Inc., Canada’s third-largest insurer, decreased 0.9 percent to C$33.46.

Thomson Reuters Corp., the financial news and information provider, fell 2.7 percent to C$39.96 after its fourth-quarter profit trailed the average of 11 analyst estimates by 5.5 percent, excluding certain items. The company hadn’t missed analysts’ average forecast by so much in four years.

BCE Inc., Canada’s biggest phone company, slipped 1.2 percent to C$36.14. Its fourth-quarter earnings of 60 Canadian cents a share, excluding certain items, missed the average of 17 analyst estimates by 1 cent a share, or 2 percent.

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

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