Canada Stocks Climb as Economy Rebounds, Bank of Montreal Gains

  • Fourth-largest lender also raises dividend 2.4 percent
  • Canadian economy grew 2.3% in third quarter on exports

Canada stocks advanced to the highest level in almost a month as data showing the economy expanded for the first time in three quarters boosted lenders and energy producers.

Canada’s economy grew 2.3 percent in the third quarter on gains in automotive exports and consumer spending. The economy had been hampered by a slump in energy production as oil tumbled, weighing on shares of commodity producers.

The Standard & Poor’s/TSX Composite Index rose 166.23 points, or 1.2 percent, to 13,580.80 at 10:50 a.m. in Toronto. The benchmark equity gauge retreated 0.4 percent in November, and has dropped 7.3 percent this year, trailed only by Singapore and Greece among developed markets. 

Valeant Pharmaceuticals International Inc. contributed the most to gains in the index Wednesday. The drugmaker jumped 9.6 percent after rallying 4.5 percent on Monday. The shares have surged 33 percent since reaching a more than two-year low on Nov. 17 and now trade at the highest level since October.

Bank of Montreal, the nation’s fourth-largest lender, added 1.4 percent to lead financial services equities higher after its profit exceeded analysts’ estimates. Canada’s largest lenders have tumbled 4.2 percent this year, on pace for their first annual decline since 2011 amid the slowing domestic economy and slumping energy and commodities prices. 

Fourth-quarter profit at Bank of Montreal jumped 13 percent, led by capital markets and U.S. banking. The bank also raised its dividend 2.4 percent. Bank of Nova Scotia was little changed after trimming an earlier drop of more than 1 percent, as revenue growth was short of analysts’ forecasts while profit beat estimates.

Royal Bank of Canada and National Bank of Canada are scheduled to report Wednesday, followed by Canadian Imperial Bank of Commerce, Toronto-Dominion Bank and Canadian Western Bank on Dec. 3.

Energy and raw-materials producers, which account for about 30 percent of the index, have each slumped more than 20 percent this year for the second and third-worst performing industries in the S&P/TSX behind only health-care.

A combination of slowing economic growth in China and a rally in the U.S. dollar with impending interest-rate increases from the Federal Reserve as soon as Dec. 16 have crimped commodities prices this year from crude to copper. The Bloomberg Commodity Index has slumped 22 percent in 2015, the biggest drop since 2008 headed for a fifth straight annual decline.

Canadian Oil Sands Ltd. rose 4.3 percent for a second day of gains. The company has another month to find other suitors willing to counter Suncor Energy Inc.’s hostile takeover offer after Alberta regulators granted an extension to Jan. 4. Suncor’s bid expires Dec. 4. Suncor had said Nov. 26 it would walk away if Canadian Oil Sands was given more time to seek other bidders.

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