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Canada Stocks Rise as Crude Rallies Amid U.S. Housing, Jobs Data

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Jan. 17 (Bloomberg) -- Canadian stocks rose to a 10-month high as banks rallied and crude advanced after U.S. reports showed housing starts climbed more than anticipated in December and initial jobless claims dropped to a five-year low.

Canadian Natural Resources Ltd. gained 2.1 percent as oil rose to a four-month high. Ivanplats Ltd. climbed 2.1 percent after more than doubling resource estimates at its Kamoa copper mine. Sun Life Financial Inc. added 1.1 percent after partnering with Malaysia’s state investment fund to buy an insurance joint venture. H&R Real Estate Investment Trust dropped 2.1 percent as it offered to acquire Primaris Retail Real Estate Investment Trust, trumping a hostile offer from another investor group.

The Standard & Poor’s/TSX Composite Index rose 65.91 points, or 0.5 percent, to 12,674.73 in Toronto, the highest level since March 1. The benchmark gauge has gained 1.9 percent this year.

The U.S. housing and jobs data “is definitely a positive, it’s more validation of a trend that’s been in place,” said Jeff Parent, investment manager with Quadrexx Asset Management in Toronto. The firm manages about C$100 million. “The markets want to move higher but have been pausing and waiting. I’m quite bullish.”

U.S. Commerce Department figures showed housing starts rose 12.1 percent in December to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey and the most since June 2008. Initial jobless claims fell 37,000 to 335,000 last week, the lowest since January 2008, Labor Department figures showed.

Banks Rally

The Toronto-Dominion Bank climbed 1 percent to C$82.69 and Royal Bank of Canada rose 0.6 percent to C$61.44 as financial and energy companies contributed most to gains in the S&P/TSX. All 10 industries advanced, on trading volume 6.7 percent lower than the 30-day average.

Canadian Natural Resources rose 2.1 percent to C$29.33 and TransCanada Corp., builder of the Keystone XL pipeline project, added 0.8 percent to C$48.58. Crude for February delivery surged 1.3 percent to settle at $95.49 a barrel in New York, the highest settlement since Sept. 17.

Ivanplats rose 2.1 percent to C$5.30 after reporting a 115 percent increase in resource estimates compared with September 2011 at its Kamoa copper project in the Democratic Republic of Congo. Copper futures for March delivery rose the most in two weeks, gaining 1.5 percent to settle at $3.662 a pound in New York.

Raised Target

Aecon Group Inc., a Toronto-based construction company, jumped 7.3 percent to C$11.75 after Michael Tupholme, an analyst with TD Securities, raised his price target to C$16 from C$15.50 while maintaining the stock as a top pick.

“We continue to see meaningful upside potential from current levels,” he said in a note to clients today.

Rogers Communications Inc. gained 1.4 percent to C$45.44 after Phillip Huang, an analyst with UBS Securities, said he expects the telecommunications giant to boost its dividend by 10 percent and renew a share buyback program on Feb. 15.

Sun Life added 1.1 percent to C$28.24. Canada’s third-largest insurer partnered with Khazanah Nasional Bhd., Malaysia’s state investment fund, to purchase 98 percent of Aviva Plc and CIMB Group Holdings Bhd.’s Malaysian insurance joint venture for 1.8 billion Malaysian ringgit ($600 million).

The deal is part of the company’s strategy to grow its business in Asia, said Kevin Strain, president of Sun Life’s Asian operations.

H&R REIT slipped 2.1 percent to C$23.28. It offered about C$27.33 in cash and stock for Primaris, the Canadian shopping mall owner that was the target of a hostile bid from an investor group led by KingSett Capital Inc. Primaris increased 0.3 percent to C$26.58.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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