Canadian Stocks Advance as Greek Debt Swap Nears

March 8 (Bloomberg) -- Canadian stocks rose the most in two weeks as commodities gained with the euro and banks advanced on speculation Greece will complete a debt swap.

Royal Bank of Canada, the country’s largest lender by assets, advanced 2.3 percent. Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.6 percent as crude oil gained. Goldcorp Inc., the world’s second-biggest gold producer by market value, rallied 1.1 percent as the U.S. dollar dropped the most intraday against the euro since Jan 17.

The S&P/TSX Composite Index gained 111.77 points, or 0.9 percent, to 12,461.93.

“The market has really figured it out,” Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “The banks are in shape for this large swap. They have to go along with it.”

After closing at an almost six-month high on Feb. 28, the index fell 3.1 percent through yesterday as raw-materials and energy companies dropped on concern Greece might not get enough bondholders to participate in the debt exchange. The industries make up 47 percent of Canadian stocks by market value.

Holders of about 85 percent of the Greek bonds eligible for the swap agreed to take part, according to a banking official in Athens who declined to be identified. The country had set a minimum of 75 percent participation. The deal would reduce Greece’s outstanding privately held debt by 53.5 percent.

Lenders Rally

Banks in the S&P/TSX gained the most since Jan 23. Royal Bank advanced 2.3 percent to C$56.93. Toronto-Dominion Bank, its biggest domestic rival, rose 1.7 percent to C$81.70.

Regional lender Canadian Western Bank rallied after Sumit Malhotra, an analyst at Macquarie Group Ltd., boosted his rating on the shares to outperform from neutral. An outperform rating means Macquarie expects the stock to return at least 5 percentage points more than its benchmark over the next 12 months. The company’s net interest margin has probably bottomed, Malhotra wrote in a note to clients.

The shares climbed 2.8 percent to C$29.09.

Crude oil advanced on the New York Mercantile Exchange after Barclays Plc said international sanctions have reduced Iranian oil shipments by 300,000 to 400,000 barrels a day.

Suncor increased 1.6 percent to C$34.27. Cenovus Energy Inc., Canada’s fifth-largest energy company, climbed 3.4 percent to C$37.89.

Price Forecasts

PetroBakken Energy Ltd., a western Canadian oil and gas producer, rose 6.3 percent to C$17.43 to extend its two-day surge to 16 percent. At least five analysts boosted their price forecasts on the shares today, a day after the company reported fourth-quarter cash flow that beat the average analyst estimate in a Bloomberg survey by 15 percent. Petrobank Energy & Resources Ltd., which owns a majority stake in PetroBakken, jumped 8 percent to C$16.60.

Oil and gas company NAL Energy Corp. rallied 5.1 percent to C$7.63 after Travis Wood, an analyst at Toronto-Dominion Bank, raised his rating on the shares to buy from hold. In a note to clients, Wood said the company is cheaper than its peers based on its price, debt and forecast cash flow. NAL Energy had declined six straight days through yesterday, its third streak of that length this year.

Gold futures gained the most in two weeks on the Comex in New York. Goldcorp advanced 1.1 percent to C$47.12. Yamana Gold Inc., Canada’s third-largest company in the industry by market value, increased 2.6 percent to C$16.98. Dundee Precious Metals Inc., which operates in Bulgaria, Armenia and Namibia, climbed 5.7 percent to C$10.02.

German Production

Base-metals producers rose after Germany reported a 1.6 percent increase in industrial production for January, beating the median economist forecast of 1.1 percent growth.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 2 percent to C$20.55 after plunging 14 percent in the previous four days. Coal and base-metals company Sherritt International Corp. surged 7.5 percent to C$5.88.

HudBay Minerals Inc., which mines copper, zinc and precious metals, advanced 4.9 percent to C$11.67 after reporting quarterly earnings that beat the average analyst estimate in a Bloomberg survey by 40 percent, excluding certain items.

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