Canadian Stocks Rise, Led by RIM; Bank of Montreal Slumps
Canadian stocks rose for the first time in four days as Research In Motion Ltd. advanced on its profit and sales forecast and Teck Resources Ltd. gained on higher copper prices.
Research In Motion, maker of the BlackBerry smartphone, was the biggest contributor as the Standard & Poor’s/TSX Composite Index advanced 0.2 percent. Teck, the country’s biggest base- metal producer, rose 3.9 percent as copper rose for a third straight week. Bank of Montreal, Canada’s fourth-largest lender, slid 6.5 percent after agreeing to buy Milwaukee-based Marshall & Ilsley Corp. for about $4.1 billion.
The S&P/TSX rose 20.23 points to 13,201.46 in Toronto, with Teck and RIM accounting for about 14 points of the advance. The main benchmark for Canadian equities still fell 0.3 percent since Dec. 10, its first weekly decline this month, after closing at a 27-month high on Dec. 13.
“The market has been betting for some time that RIM had lost its technological edge,” said Sebastian Van Berkom, president of Van Berkom & Associates Inc. in Montreal, which manages C$1.4 billion, mainly in small and medium-sized company shares. The shares “got down to a really low multiple because of that.”
RIM, the 13th-largest company by weight in the S&P/TSX, gained 1.8 percent to C$60.69. Third-quarter profit excluding some items was $1.76 a share, beating the average of analyst estimates by 6.7 percent.
Revenue this quarter will be $5.5 billion to $5.7 billion and earnings per share will be $1.74 to $1.80, Waterloo, Ontario-based RIM said. Analysts projected revenue of $5.46 billion and profit of $1.61 a share.
RIM is counting on a new version of the BlackBerry Bold and the Torch, which has a slide-out keyboard and better Internet browser, to lure customers away from Apple Inc.’s iPhone. RIM is also tapping demand in markets such as Brazil and Indonesia for less expensive models like the Curve, which incorporate its free instant messaging system, to fend off the challenge from a slew of new phones based on Google Inc.’s Android software.
Teck Resources rose 3.9 percent to $58.39. Copper rose today as European Union leaders agreed on a plan to contain future debt crises and economic reports in the U.S. and Germany bolstered prospects for metal demand.
Bank of Montreal fell 6.5 percent to $58. It will raise about C$800 million in shares to help finance the purchase of Marshall & Ilsley, the largest takeover ever for the Canadian bank.
The acquisition is the third-largest by a Canadian bank or insurer in the U.S., ranking behind Manulife Financial Corp.’s $10.9 billion purchase of John Hancock Financial Services Inc. in 2003 and Toronto-Dominion Bank’s $8.3 billion deal for Commerce Bancorp Inc. in 2007, Bloomberg data shows.
The transaction will add to earnings in 2013, excluding merger costs of C$540 million, Bank of Montreal said.
Canada’s biggest bank, Royal Bank of Canada, slid 0.7 percent to C$51.50. Bank of Nova Scotia retreated 0.4 percent to $56.60.
Financial companies are the second-worst performing industry in the S&P/TSX this year, returning 4.9 percent compared with an index gain of 12 percent. They may be among the best-performing next year as the economy improves and dividends are restored, Van Berkom said.
Onex Corp. rose 0.9 percent to C$29.18. Canada’s largest private-equity firm is in talks to sell its Husky Injection Molding Systems unit to rival buyout firms and may reap as much as $2 billion, said people with direct knowledge of the matter.
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