(Reuters) - Shares in Manulife Financial Corp (MFC.TO) rose as much as 7 percent in early trading on Thursday, a day after the company reported third-quarter earnings that beat market expectations.
Canada’s biggest insurer had seen the value of its shares fall 14 percent last month after research firm Muddy Waters said it had taken a short position in the stock. The firm also publicized a lawsuit on Oct. 4 relating to insurance policies sold in the 1990s which it said could lead to “billions of dollars of losses” at the insurer.
Manulife has said it is confident it will win the case and that the lawsuit will not have material impact on its business.
Its shares hit a high of C$22.94 on Thursday, 1 percent shy of where they were before Muddy Waters published its report on Nov. 4.
The company on Wednesday reported a much better-than- expected 42 percent rise in earnings per share for the latest quarter, helped by strong growth in Asia and cost savings.
“We view this as a solid beat for Manulife,” said Eight Capital analyst Steve Theriault.
Rival Sun Life Financial (SLF.TO) saw its shares fall 3.8 percent despite marginally beating forecasts for its third-quarter earnings, in part due to a decline in earnings at its Asian business.
“We expect that the market will view this as a clean but modest beat, with the miss in Asia garnering attention after solid earnings improvements in recent quarters,” said Theriault.
Reporting by Matt Scuffham; Editing by Saumyadeb Chakrabarty