Canadian Stocks Decline as Greece Debt Talks Reach Stalemate

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Canadian Stocks Decline as Greece Debt Talks Reach Stalemate

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By Matt Walcoff - Jan 24, 2012 10:59 AM ET

Canadian stocks fell for the first time in five days as talks between European finance ministers and holders of Greek debt reached a stalemate and the euro dropped against the U.S. dollar.
Royal Bank of Canada (RY), the country’s largest lender by assets, declined 1 percent. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, decreased 2.5 percent after an analyst at JPMorgan Chase & Co. cut his rating on the shares. Semiconductor designer Gennum Corp. (GND) soared 118 percent after agreeing to be bought by Semtech Corp. for about C$500 million ($494 million).
The S&P/TSX Composite Index (SPTSX) slipped 91.31 points, or 0.7 percent, to 12,430.39 at 10:58 a.m. Toronto time after closing at a four-month high yesterday.
“The clock is really ticking for the Greeks,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees about C$1.7 billion. “If it’s finally confirmed that one of the euro members actually defaults, the next question is, ‘Who’s next?’”
The index gained 4.7 percent this month through yesterday as improving employment and manufacturing data in the U.S. overshadowed the European debt crisis. The S&P/TSX slumped 11 percent in 2011 as concern the crisis would hamper global growth led to declines in commodity producers’ shares.
European finance ministers refused to increase their offer of 130 billion euros ($169 billion) in public funds for a second Greek debt program. They sought to make bondholders accept lowerinterest rates on new bonds than the investors want.

Streak Ends

The S&P/TSX Financials Index (STFINL) declined for the first time in seven days. Royal Bank lost 1 percent to C$53.76.Bank of Nova Scotia (BNS), Canada’s third-largest lender by assets, decreased 1.1 percent to C$53.97. Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, slipped 1.5 percent to C$12.57.
Potash Corp. retreated 2.5 percent to C$44.78 after Jeffrey Zekauskas, an analyst at JPMorgan, reduced his rating on the stock to “neutral” from “overweight.” In a note to clients, Zekauskas cited the 18 percent gain in the company’s U.S.-traded shares from Dec. 19 to yesterday and a preference for shares of Agrium Inc.
Barrick Gold Corp. (ABX), the world’s largest gold producer, fell 1.8 percent to C$46.45 after Stephen D. Walker, an analyst at Royal Bank, cut his rating on the shares to “sector perform” from “outperform.” Walker had had an “outperform” rating on Barrick since June 2009.
Gennum surged 118 percent, the most since at least 1987, to C$13.41 after Camarillo, California-based Semtech agreed to buy it for C$13.55 a share. Last month, Sterling Partners bought Ottawa-based Mosaid Technologies Inc., which licenses semiconductor patents, for about C$590 million.
BlackBerry maker Research In Motion Ltd. (RIM) fell 4.2 percent to C$15.02. The shares tumbled 9.1 percent yesterday after new Chief Executive Officer Thorsten Heins said he planned no “drastic change” after replacing Mike Lazaridis andJim Balsillie, who shared the role until Jan. 22.
Canadian National Railway Co. (CNR), the country’s largest railroad, dropped 2.1 percent to C$77.91 after forecasting a smaller earnings increase this year than most analysts in a Bloomberg survey had estimated.
To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

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