Canada Stocks Rise to Three-Week High as ECB Is Set to Buy Debt

Canadian stocks rose to their highest level in almost three weeks after European Central Bank President Mario Draghi said the bank is ready to buy government bonds as soon as the necessary conditions are fulfilled.

Enbridge Inc. rose 1.8 percent after analysts at BMO Capital Markets and UBS AG raised their rating on the stock on an improved company outlook. Dundee Industrial Real Estate Investment Trust jumped 9 percent in its first day of trading on the Toronto Stock Exchange.

The Standard & Poor’s/TSX Composite Index gained 88.21 points, or 0.7 percent, to 12,447.68 in Toronto. The benchmark index has risen 4.1 percent this year. Mining and telephone stocks led the advance today as eight of 10 industries rose.

“Draghi’s comments definitely help,” said Bruce Campbell, president of Campbell & Lee Investment Management Inc., in an interview from Oakville, Ontario. “It’s fairly obvious Spain needs some bailout help. We can argue what the number is, but because of what he’s said he’ll do and what he’s already done, it’s become self-fulfilling.”

The ECB is ready to start buying government bonds as soon as the necessary conditions are fulfilled by any countries needing assistance, Draghi said today at a press conference in Ljubljana, Slovenia. The central bank is ready to undertake purchases “once all the prerequisites are in place,” Draghi said, after policy makers left the benchmark rate at a historic low of 0.75 percent.

‘Solid’ Investment

Bank of Canada Senior Deputy Governor Tiff Macklem said today that business investment has been “solid” and that executives need to become more competitive and win sales in faster-growing emerging markets such as Asia. Macklem also reiterated the amount of slack in the labor market has shrunk and policy makers may raise the policy interest rate to meet a 2 percent inflation target.

Canadian equities joined a rally in North American markets after U.S. jobless claims data rose less than estimated. Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, U.S. Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey.

The Canadian economy probably added 10,000 jobs in September, with the unemployment rate unchanged at 7.3 percent, according to the median estimate of economists surveyed by Bloomberg news ahead of a Statistics Canada announcement tomorrow.

Analyst Ratings

Enbridge, Canada’s largest pipeline company by market value, rose 1.8 percent to C$40.08 after Carl Kirst, an analyst with BMO Capital Markets, raised the stock to outperform and Chad Friess of UBS raised his rating to buy after the company’s investor meeting in Toronto yesterday.

Dundee Industrial REIT climbed 9 percent to C$10.90 in its first day of trading on the Toronto Stock Exchange after its C$155 million ($158 million) initial public offering last month at C$10 a unit.

Whitecap Resources Inc. jumped 6.7 percent to C$7.84 after the oil and gas explorer reported record September production of 16,900 barrels of oil equivalent per day yesterday after the market close.

Bankers Petroleum Ltd., which operates in the Patos-Marinza oil field in Albania, surged 4.8 percent to C$3.25 after the Albanian project reported a 10 percent increase in production in the third quarter.

Sulliden Gold Corp., run by Forbes & Manhattan Inc. Chairman Stan Bharti, soared 14 percent to C$1.06 after the mineral exploration company canceled a bonus plan for the board on shareholders’ input. The stock fell 15 percent yesterday.

Suncor Energy Inc., Canada’s largest energy company, advanced 1.3 percent to C$33.15 and Canadian Natural Resources Ltd. rose 1.4 percent to C$30.70 as crude rebounded from a two-month low. Oil for November delivery gained 4.1 percent to settle at $91.71 a barrel in New York as tensions between Syria and Turkey fanned concern Middle East production may be disrupted.

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