July 2 (Bloomberg) -- Telus Corp. rose after Canaccord Financial Inc. said investors had overestimated how much Verizon Communications Inc. may shake up Canada’s wireless market.
Telus shares climbed 3.1 percent to C$31.66 at the close in Toronto. Larger mobile-phone rival Rogers Communications Inc. advanced 2.8 percent to C$42.37.
The companies’ shares were oversold amid concern that Verizon would usher in more intense competition, said Canaccord’s Dvai Ghose and Sanford Lee. Verizon said last month it was considering entering the Canadian mobile-phone market, and the Globe and Mail reported June 26 the company had submitted a bid for Toronto-based Wind Mobile. New York-based Verizon may only be focused on the corporate and urban markets of Canada, where it has more experience, the analysts said.
“These differences are important for investors, consumers and the government, which may be naively assuming that Verizon is the savior for wireless competition in Canada,” the analysts said in a report today. They advise buying Telus and Rogers.
The analysts downgraded BCE Inc. to hold from buy. Because of its landline business, BCE has less exposure to the wireless market than Vancouver-based Telus and Toronto-based Rogers. BCE shares have fallen 2.8 percent since June 17, when the Globe and Mail reported Verizon’s interest. Telus shares have dropped 9.4 percent and Rogers shares have declined 7.8 percent in that span.
BCE fell less than 1 percent today to C$43.01.
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