Canadian stocks rose for the first time in three days, led by industrial shares, after Bombardier Inc. signed an agreement with China-based Commercial Aircraft Corp. that will help cut costs and boost sales.
Bombardier, a maker of trains and airplanes, increased 3.2 percent. Canadian National Railway Co., the country’s largest railroad, rose 1.8 percent on plans to build a line in Quebec. Calfrac Well Services Ltd., which offers hydraulic fracturing in Canada and the U.S., fell 5.9 percent after Baker Hughes Inc. said a shift away from gas rigs may hurt its earnings.
The Standard & Poor’s/TSX Composite Index rose 5.79 points, or less than 0.1 percent, to 12,436.49 in Toronto.
“Bombardier has one of the lowest-margin businesses in Canada, and they need that increased volume,” Barry Schwartz, a money manager at Baskin Financial Services Inc. in Toronto, said in a telephone interview. The firm oversees about C$400 million ($386 million). “It’s been few and far between for them in terms of aircraft sales. Any news is good news for them.”
The index fell 0.5 percent this week through yesterday as China reported a smaller gain in exports than economists had forecast and energy shares dropped with oil prices. The S&P/TSX 60 VIX, an index of volatility of some of the biggest stocks in the Canadian index, has dropped to 15.13 from 19.17 on March 6.
“The fact that volatility has been put away is what investors should be cheering about,” said Schwartz. “In my mind that’s the most bullish sign, more so than rising earnings, interest yields or the fact that Greece is off the table.”
Bombardier increased 3.2 percent to C$4.18 after the agreement, which will allow its planned CSeries aircraft to have the same cockpit as China’s first passenger jet, helping the company pare research costs and challenge Boeing Co. and Airbus SAS.
Canadian National Railway rose 1.8 percent to C$78.88. The company is working with provincially owned pension-fund manager Caisse de Depot et Placement du Quebec on a project to build a 800-kilometer (500-mile) rail line, as the province ramps up investment in infrastructure to boost royalties from minerals and hydrocarbons, Finance Minister Raymond Bachand said.
“For the past couple of weeks this market has been predominantly driven off the commodity space, but you’re not seeing a lot of movement on it today,” Gareth Watson, vice president of investment management and research at Richardson GMP Ltd. in Toronto, said in a telephone interview. The firm oversees about C$16 billion.
Calfrac declined 5.9 percent to C$29.17 after Baker Hughes, the world’s third-largest oilfield services provider, said it expects operating profit before tax for the first quarter to fall as producers shift drilling from natural gas to crude.