Canadian Stocks Rise as Exports Increase, BCE Boosts Dividend

Canadian stocks rose, completing a second-straight weekly gain, as financial and telecommunications companies advanced after Canadian and U.S. exports increased and BCE Inc. boosted its quarterly dividend.

BCE, Canada’s biggest phone company, advanced 2.9 percent after raising its dividend by 7.7 percent. First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, climbed 9.6 percent as China’s imports rose to a record. Manulife Financial Corp., North America’s fourth-largest insurer, surged 5.7 percent.

The Standard & Poor’s/TSX Composite Index gained 72.53 points, or 0.6 percent, to 13,239.47 at 4:15 p.m. in Toronto. The Canadian benchmark advanced 0.5 percent this week after U.S. President Barack Obama and congressional Republicans agreed to extend tax cuts due to expire Dec. 31.

“It’s a continuing effect of the Bush tax cuts that have been extended,” said Todd Johnson, who helps oversee C$230 million ($228 million) as a money manager at BCV Asset Management in Winnipeg, Manitoba. “The market was starting to price in that nothing would get done, but Obama’s definitely shifted to a bit more of a pro-growth stance, and I think the market’s viewed that positively.”

The index is performing better than the S&P 500 for the seventh straight year, boosted by raw-material producers. The growth of the Chinese economy helped spur copper to a 24 percent gain through yesterday, while concern over the safety of government debt led gold to a 25 percent jump.

Metal User

Chinese imports rose 38 percent last month from November 2009, the country’s customs bureau said today. China is the world’s biggest user of industrial metals.

Canada’s trade deficit narrowed more in October than all 24 economists in a Bloomberg survey forecast as metal exports surged 18 percent from September, Statistics Canada said today. The U.S. today reported the smallest trade gap since January as exports advanced to a 26-month high.

The S&P/TSX Financials Index increased for a fourth day. Manulife rallied 5.7 percent to C$16.89. Financial holding company Power Corp. of Canada, climbed 1 percent to C$27.90. National Bank of Canada, the country’s sixth-largest bank, rose 1 percent to a record C$70.22.

“You have interest rates starting to move higher this week,” Johnson said. “This week is a pretty seminal event. Manulife is positively levered to the normalization of the interest-rate cycle.”

Rising Rate

The yield on U.S. 10-year Treasuries increased 0.31 percentage points this week, the biggest weekly gain in more than a month.

Canada’s dollar slipped the most in four weeks versus its U.S. counterpart as investors bet interest rates will remain on hold until late next year after the central bank said it will be careful about future rate boosts.

The currency reversed last week’s gain as the Bank of Canada kept the benchmark overnight lending rate at 1 percent for a second consecutive meeting and underlined threats to the economic recovery from falling exports and Europe’s sovereign-debt crisis.

The largest base-metals producers gained as copper advanced. First Quantum increased 9.6 percent to its highest price ever of C$118.94. Teck Resources Ltd., Canada’s largest base-metals and coal producer, climbed 4.1 percent to C$57.90.

Gold companies fell as the metal dropped on a stronger U.S. dollar. Goldcorp Inc., the world’s second-largest gold producer by market value, declined 0.6 percent to C$46.50.

Production Forecast

Harry Winston Diamond Corp. sank 13 percent to C$12.62 after lowering its 2010 production estimate by 12 percent. The company also forecast 2011 production 31 percent below the estimate of Bank of Montreal analysts.

BCE, the parent of Bell Canada, rose 2.9 percent to a 24-month high of C$36.09 after boosting its quarterly dividend to 49.25 cents a share. The company also increased its 2010 profit forecast by 1.8 percent to reflect a tax deduction for a C$750 million ($742 million) voluntary pension contribution.

Forzani Group Ltd. jumped 12 percent to C$17.64, the biggest gain since November 2008. Canada’s largest sporting-goods retailer reported third-quarter earnings that beat the average analyst estimate by 12 percent, excluding certain items. The company also said same-store sales gained 16 percent in the first five weeks of the fourth quarter from a year earlier.

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