Canadian Stocks Rise as Manufacturing Expands in U.S., China
Canadian stocks advanced for a third day, led by producers of base and precious metals and financial companies, after measures of manufacturing growth showed expansion in the U.S., China and Europe.
Teck Resources Ltd., Canada’s largest base-metals and coal producer, gained 2.9 percent as copper futures climbed to records in London and New York. Valeant Pharmaceuticals International, Inc., Canada’s largest drugmaker, soared 5.8 percent after agreeing to buy PharmaSwiss SA. Bank of Nova Scotia, the country’s third-biggest lender by assets, rose 1.5 percent after the Institute for Supply Management’s factory index for the U.S. rose to its highest level since 2004.
The Standard & Poor’s/TSX Composite Index increased 160.63 points, or 1.2 percent, to 13,712.62, the highest since August 2008.
“Things are improving around the world.” said Greg Eckel, who helps oversee about C$1 billion ($1 billion) as a money manager at Morgan Meighen & Associates Ltd. in Toronto. “The U.S. data still takes the lion’s share of our attention. It’s further indication that things are improving, and obviously, with our resource-based markets, we need that to happen for us to be perceived in a favorable light.”
The S&P/TSX rose 0.8 percent in January for its seventh- straight monthly gain. The stock benchmark’s energy companies surged 4 percent in the last two days of the month as oil jumped 7.7 percent on the unrest in Egypt.
The manufacturing index for January from the Tempe, Arizona-based ISM topped all 78 forecasts in a Bloomberg survey. The measure increased to 60.8 from 58.5 in December. Readings above 50 signal expansion.
A purchasing managers’ index released today by China’s logistics federation showed a 23rd-straight month of manufacturing growth in the country, the world’s largest user of base metals.
Purchasing managers’ indexes for the euro region and the U.K. from Markit Economics and the Chartered Institute of Purchasing and Supply surpassed the median forecasts of economists in Bloomberg surveys.
Producers of metals used in industry rose as copper gained for a fifth day. Teck increased 2.9 percent to C$62.42. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, advanced 5.5 percent to C$122.24 after Eugene King, an analyst at Goldman Sachs Group Inc., named it his “top pick” among copper-mining companies. Quadra FNX Mining Ltd., which produces copper in the U.S., Canada and Chile, climbed 6 percent to C$14.31.
All S&P/TSX banks and insurers rose. Scotiabank gained 1.5 percent to C$57.29. Toronto-Dominion Bank, Canada’s second- biggest lender by assets, advanced 1.5 percent to C$76.11. Manulife Financial Corp., North America’s fourth-largest insurer by revenue, increased 2.9 percent to C$17.95, a seven-month high.
Valeant jumped 5.8 percent to C$38.62 after announcing the purchase of PharmaSwiss for 350 million euros ($480 million). Valeant has soared 37 percent this year, behind only Uranium One Inc.’s 43 percent gain among S&P/TSX stocks.
“This is the kind of deal investors want to see,” Marc Goodman, an analyst at UBS AG, wrote in a note to clients. Goodman boosted his 12-month share-price estimate on Valeant’s U.S.-listed shares to $43 from $40.
Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, climbed for a fifth day, rising 2.1 percent to C$181.20 as a port strike delayed shipments of corn and soybeans from Argentina. Agrium Inc., Canada’s second-largest fertilizer producer, gained 1.9 percent to C$90.12.
Precious-metals producers rallied as the U.S. dollar fell to the lowest level since Nov. 9 against a basket of world currencies.
Silver reseller Silver Wheaton Corp. advanced 5.2 percent to C$32.46. Eastern Platinum Ltd., which produces precious metals in South Africa, increased 8.8 percent to C$1.74 after receiving final credit approval on a $100 million debt-financing package.
Harry Winston Diamond Corp., which mines in northern Canada, soared 9.7 percent to C$11.88. Brian MacArthur, an analyst at UBS, raised his rating on the shares to “buy” from “neutral,” citing the stock’s 27 percent loss from Dec. 9 to Jan. 30 in a note to clients.
Detour Gold Corp., which is developing a gold mine in northern Ontario, surged 7.2 percent to C$28 after announcing an increase in reserves. Stephen Parsons, an analyst at Wellington West Holdings Inc., raised his 12-month share-price estimate on the stock to C$48.60 from C$38.50.
Oil-sands developer Opti Canada Inc. tumbled a record 35 percent to 45 cents on concern that the company may run out of money to operate its Long Lake project with partner Nexen Inc. The shares have dropped 97 percent over the past three years.
TransGlobe Energy Corp., which produces oil and gas in Egypt and Yemen, rebounded 8.8 percent to C$13.27 after analysts at Canaccord Financial Inc., FirstEnergy Capital Corp. and GMP Capital Inc. reiterated “buy” ratings on the company. TransGlobe shares plunged 9 percent yesterday.
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