The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Canadian stocks climbed to a record, joining a global rally in stocks amid expectations of stronger global growth as US President Donald Trump tries to shift the US economy into higher gear.
The S&P/TSX Composite Index rose as much as 0.4 percent to 15,674.30, topping the previous closing record of 15,657.63 set on Sept. 3, 2014. The intraday record is 15,685.13 points. The Canadian benchmark surged 18 percent last year, tops among the world’s developed markets, and has added about 2.4 percent this year.
The Canadian stocks rally follows the Dow Jones Industrial Average surge past 20,000 for the first time, with investors counting on a Trump administration to usher in lower taxes and boost spending on infrastructure, stimulating the US economy. Trump’s moves on Tuesday to advance construction of TransCanada Corp.’s Keystone XL pipeline from Alberta’s oil sands to the US Gulf Coast has given added vigor to energy stocks.
Trump Effect
“It seems to be the Trump effect,†Ian Nakamoto, equity specialist with Raymond James Ltd., which manages about C$34 billion ($26 billion) in assets, said by phone. “He’s attempting to grow the US economy. Canada does well when economic growth improves in the US. We’re more economically sensitive to financial services, materials, and energy. And these are all sectors that have come back to life.”
The equity rally also reflects renewed optimism for the Canadian economy as oil and commodity prices rally. Canada created 53,700 jobs in December, shattering economists’ forecasts, and the country recorded its first trade surplus in more than two years. Canada is poised to benefit from U.S expansion, driving growth closer to 2 percent in 2017 and 2018, from about 1.3 percent in 2016, according to economists’ estimates.
Oil Rebound
Natural resources led the way to the record, with raw-materials and energy the two top industries in the S&P/TSX in the past 12 months with gains of 66 percent and 42 percent respectively. Ivanhoe Mines Ltd., the Vancouver-based metals miner with projects in Africa, is the top stock in the index over that time frame, up more than seven-fold.
Crude prices also remain buoyant after the Organization of the Petroleum Exporting Countries agreed to production cuts on Nov. 30 for the first time in eight years. West Texas Intermediate for March delivery slipped 39 cents, or 0.7 percent, to $52.79 a barrel at 10:38 a.m. on the New York Mercantile Exchange, and has gained about 74 percent in the past 12 months.