Canadian Stocks Gain as Dividend-Paying Shares Rise, CN Climbs

Canadian stocks rose for a fourth day as dividend-paying stocks gained on speculation the Bank of Canada will be slow to raise interest rates and transportation companies advanced as fuel prices fell.

Rogers Communications Inc., Canada’s biggest wireless provider, increased 1.9 percent after UBS AG said the country may delay changes to foreign-ownership restrictions in the telecommunications industry. Canadian National Railway Co., the country’s biggest railroad, rallied 1.6 percent as crude oil fell 1.7 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped 2.9 percent as corn retreated for the first time in six days.

The Standard & Poor’s/TSX Composite Index climbed 17.84 points, or 0.1 percent, to 13,625.09.

“People are looking for yield, and I think they are going to look for larger names, what are perceived to be safer names, in the Canadian market,” said Andrew Pyle, who helps manage C$200 million ($206 million) as an associate portfolio manager for Scotia McLeod in Peterborough, Ontario. “Even some of the lower-dividend-yielding stocks you see of a pickup in demand for because of this pullback in interest rates.”

The S&P/TSX rose 1.7 percent this week through yesterday as investors took advantage of the lowest share prices relative to earnings in six months and oil, copper and agricultural commodities rebounded. The stock benchmark remained down 3.6 percent for the quarter as of yesterday’s close.

‘Generally Pessimistic’

Bank of Canada Governor Mark Carney gave a “generally pessimistic” speech at a fund-raising dinner yesterday, Avery Shenfeld, an economist at Canadian Imperial Bank of Commerce, said in an e-mail message to clients today.

Shenfeld later sent an e-mail asking people not to cite his earlier message because it was an “off the record” event.

David Tulk, a strategist at Toronto-Dominion Bank, said on May 17 that the central bank probably won’t raise its benchmark rate until September. TD had previously forecast a July interest rate boost.

Indexes of S&P/TSX financial, telecommunications and pipeline stocks, each of which has a dividend yield of at least 3.4 percent, gained.

TD, Canada’s second-largest bank, advanced for a fifth day, climbing 0.6 percent to C$83.97. Manulife Financial Corp., North America’s fourth-largest insurer, increased 0.7 percent to C$17.59.

Wireless Carriers

Wireless carriers rose after Phillip Huang, an analyst at UBS, said the appointment of Christian Paradis as Canada’s industry minister may hold up the government’s review of foreign-ownership rules.

Rogers gained 1.9 percent to C$37.45. BCE Inc., Canada’s largest phone company, advanced 1 percent from a 32-month high to C$39.

Transportation companies gained as crude futures retreated to less than $99 a barrel in New York.

CN increased 1.6 percent to a record C$74.83. Canadian Pacific Railway Ltd., the country’s second-biggest railroad, climbed 0.7 percent to C$60.06. Transat A.T. Inc., the owner of Air Transat, surged 6.6 percent to C$12.39.

Fertilizer producers fell today as corn and wheat dropped after surging 10 percent and 12 percent, respectively, this week through yesterday.

Potash Corp. declined 2.9 percent to C$51.93. Agrium Inc., Canada’s second-largest fertilizer producer, lost 1.5 percent to C$78.49.

BlackBerry maker Research In Motion Ltd. fell 2.8 percent to C$42.87 after market-research firm Gartner Inc. said its share of the global smartphone market fell to 13 percent last quarter from 20 percent a year earlier.

Electronic-whiteboard maker Smart Technologies Inc. sank 28 percent to C$6.79, the lowest level since its July initial public offering, after saying it lost 2 cents a share in the fourth quarter, excluding certain items. All eight analysts in a Bloomberg survey had forecast a profit. Analysts at Cowen Group Inc. and Piper Jaffray Cos. cut their ratings on the company to “neutral.”

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