Most Canadian stocks (SPTSX) fell as producers of base metals and energy declined with copper and natural gas futures after Germany reported a drop in industrial production and above-normal temperatures continued in the U.S.
Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, decreased 1.8 percent after agreeing to buy SilverBirch Energy Corp. (SBE) for C$435 million ($424 million). Enbridge Inc. (ENB), the country’s biggest pipeline company, lost 0.6 percent. Valeant Pharmaceuticals International Inc. (VRX), Canada’s biggest drugmaker, rose 2.7 percent after at least four analysts raised their price estimates on the shares.
Among Standard & Poor’s/TSX Composite Index (SPTSX) stocks, 134 retreated, 109 advanced and 10 were unchanged. The S&P/TSX increased 8.08 points, or 0.1 percent, to 12,196.72.
“Things are mixed south of the border, and Europe, even if they add money to the system, they’re still trying to be austere at the same time, which means you either get slowing or potentially negative growth, which doesn’t bode well for the commodity sector,” Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million.
The S&P/TSX climbed 2 percent last week, its third straight weekly advance, as raw-materials and energy stocks rose after economic data indicated global manufacturing is strengthening. The two industries make up 48 percent of Canadian stocks (SPTSX) by market value, according to Bloomberg data.
German industrial production fell 0.6 percent in November, the Economics Ministry said today in Berlin. The drop exceeded most economists’ forecast in a Bloomberg survey.
Teck slipped 1.8 percent to C$37.65 after the cash portion of its acquisition agreement with SilverBirch amounted to a 32 percent premium relative to the 20-day volume-weighted average price of the target company’s shares, according to Bloomberg data. SilverBirch, which owns a 50 percent stake in the Frontier oil-sands project, soared 33 percent, the most since it began trading in October 2010, to C$9.61.
Among other base-metals producers, First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper-mining company, fell 2 percent to C$21.58 to end a six-day streak of advances. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi project in Mongolia, dropped 2.8 percent to C$18.51.
The S&P/TSX Energy Index (STENRS) declined for a third day as crude oil retreated and natural gas slipped on forecasts for above- normal U.S. temperatures. Enbridge lost 0.6 percent to C$37.57. Talisman Energy Inc. (TLM), an oil and gas producer with operations in North America, the North Sea and Indonesia, decreased 2.2 percent to C$12.40 a day before the release of its 2012 financial forecasts.
Progress Energy Resources Corp. (PRQ), which produces natural gas and oil in Canada, slumped 5.1 percent to C$12.72 after Stacey McDonald, an analyst at GMP Capital Inc., cut her rating on the stock to “hold” from “buy.”
Valeant gained 2.7 percent to C$50.14 after at least four analysts raised their 12-month price estimates on the shares. The company forecast cash earnings higher than most analysts had projected on Jan. 6.
Lennox Gibbs, an analyst at Toronto-Dominion Bank, boosted his forecast to $70 from $60, saying in a note to clients that Chief Executive Officer J. Michael Pearson’s “strong strategic vision and the ongoing execution bode well for value creation at Valeant.”
The S&P/TSX Financials Index advanced as the country’s three largest banks climbed. Bank of Nova Scotia (BNS), the third- biggest lender by assets, increased 0.6 percent to C$51.71. Canadian Imperial Bank of Commerce, the fifth-largest bank, rose 0.5 percent to C$74.99. Sun Life Financial Inc. (SLF), Canada’s third- biggest insurer, gained 0.9 percent to C$19.81.
Trucking company TransForce Inc. (TFI) rallied 7.7 percent, the most since October 2010, to C$14.85 after Walter Spracklin, an analyst at Royal Bank, raised his rating on the shares to “top pick” from “outperform.”
“The company has now assembled a group of assets that are high-quality in nature,” Spracklin wrote in a note to clients. TransForce “shares are not being properly valued by the marketplace.”
Rare Element Resources Ltd. (RES), which is developing a rare- earths project in Wyoming, advanced 18 percent to C$6.85 to extend its six-day surge to 109 percent. The shares jumped after the company said Jan. 4 that it had more resources on its property than previously disclosed. The six-day climb was the biggest since 2001.
Imax Corp. (IMAX), the maker of giant-screen movie-projection systems, climbed 5.8 percent to C$20.71 after the Wall Street Journal’s “Heard on the Street” column said its profits are likely to increase.
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