Canadian Stocks Rise as CIBC Beats Analysts’ Earnings Estimate
Canadian stocks rose for a fourth day, paring a monthly decline, as financial companies rallied after Canadian Imperial Bank of Commerce reported earnings that beat the average analyst estimate.
CIBC, Canada’s fifth-largest lender by assets, gained 4.6 percent after raising its dividend. Enbridge Inc. (ENB), the country’s biggest pipeline company, advanced 2.2 percent as natural gas jumped 3.7 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, fell 2.4 percent as corn and wheat dropped.
The Standard & Poor’s/TSX Composite Index climbed 133.99 points, or 1.1 percent, to 12,768.70, reducing its monthly loss to 1.4 percent.
“Going into the quarter, most people were expecting the banks to disappoint,” Jeff Bradacs, a money manager at Manulife Financial Corp. (MFC) in Toronto, said in a telephone interview. Bradacs’s team oversees C$1.7 billion ($1.7 billion). “The results beat consensus, but the big thing was the dividend increase.”
The stock benchmark completed its sixth-straight monthly drop. Energy stocks led the retreat, tumbling 6.3 percent as crude oil slumped on concern the global economic recovery is slowing. Energy companies make up 26 percent of Canadian stocks by market value, according to Bloomberg data.
CIBC gained 4.6 percent to C$76.40 after its third-quarter earnings beat the average estimate of analysts in a Bloomberg survey by 5.9 percent, excluding certain items. The lender raised its quarterly dividend for the first time in four years, increasing it 3.4 percent to 90 Canadian cents a share.
The S&P/TSX Banks Index erased its monthly decline. Toronto-Dominion Bank (TD), which is scheduled to report quarterly financial results tomorrow, climbed 2.7 percent to C$77.47. Royal Bank of Canada, its larger domestic rival, advanced 2.4 percent to C$50.12.
Bank of Nova Scotia (BNS), Canada’s third-largest lender by assets, rose 1.9 percent to C$54.53 after Robert Sedran, an analyst at CIBC, boosted his rating on the shares to “sector outperformer” from “sector performer.” Scotiabank reported third-quarter earnings yesterday that beat its average analyst estimate by 2.2 percent, excluding certain items.
The S&P/TSX Energy Index reduced its largest monthly drop since December 2008 as natural gas futures gained on forecasts for above-normal temperatures in the U.S.
Enbridge advanced 2.2 percent to a record C$32.50. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, increased 1.8 percent to C$37. Encana Corp. (ECA), Canada’s biggest natural gas producer, climbed 2.3 percent to C$24.87. Tourmaline Oil Corp., a western Canadian oil and gas producer, surged 5.6 percent to C$34.
Base-metals and coal producers rose as copper futures gained to the highest level in more than three weeks. Base metals rallied after the U.S. reported a bigger monthly jump in factory orders than most economists in a Bloomberg survey had forecast.
Teck Resources Ltd. (TCK/B), Canada’s largest company in the industry, advanced 0.8 percent to C$43.50, extending its four- day surge to 10 percent. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, increased 6.6 percent to C$24.09. Capstone Mining Corp. (CS), which operates in Canada and Mexico, climbed 7.6 percent to C$3.25.
Women’s clothing retailer Reitmans (Canada) Ltd. jumped 5.2 percent, the most since March 2010, to C$14.70 after reporting second-quarter earnings of 48 Canadian cents a share, excluding certain items. Two analysts in a Bloomberg survey had estimated profit of 41 Canadian cents a share and 46 Canadian cents a share, respectively.
Potash Corp. fell 2.4 percent to C$56.46 as corn futures dropped after settling at the highest since June 9 yesterday. Corn is heading for its biggest monthly surge since December 2010 on speculation hot weather will limit yields in the U.S.
Bombardier Inc. (BBD/B), the maker of trains and airplanes, sank 6.8 percent, the most since April 2010, to C$4.77 after reporting financial results for the second quarter. The company said it may cut output of some regional-jet models as slowing economic growth damps demand.
To contact the reporter on this story: Matt Walcoff at Mwalcoff1@bloomberg.net
To contact the editor responsible for this story: Nick Baker at Nbaker7@bloomberg.net