May 12, 2008 / 9:14 PM / 10 years ago

UPDATE 4-Toronto stocks hit record high as EnCana, RIM gain

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By Leah Schnurr

TORONTO, May 12 (Reuters) - The Toronto Stock Exchange’s main index sprung to a record high on Monday, buoyed by EnCana’s (ECA.TO) plan to split itself in two and the release of a new BlackBerry smartphone by Research In Motion RIM.TO.

EnCana, Canada’s biggest energy company, jumped C$5.68, or 6.6 percent, to C$92.20 after it said on the weekend it will split into a natural gas company and integrated oil sands producer.

The news boosted the oil and gas sector 2.2 percent, helping the S&P/TSX composite index .GSPTSE surpass its previous record high. The benchmark closed up 144.88 points, or 1 percent, at 14,666.07, after climbing as high as 14,695.75 earlier in the day.

Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario, said EnCana’s move could be copied by a number of significant energy companies, including Canadian Natural Resources (CNQ.TO) and Nexen NXY.TO.

“None of them is exactly the same as EnCana, but a number of them have contemplated a similar-type scenario, and that bumps the probability that those companies will be looking at a similar type move,” he said.

Canadian Natural rose C$2.51, or 2.7 percent, to C$96.66, while Nexen edged up 30 Canadian cents, or 0.8 percent, to C$38.61.

Tech companies also boosted the benchmark, after RIM said it will launch its new high-end BlackBerry Bold, aimed at its core base of business users.

Shares of the tech heavyweight jumped C$8.90, or 6.7 percent, to C$142.25, while the technology group added 3.3 percent.

“Investors are taking a keen interest on it,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, of RIM’s new smartphone.

“(Investors are) also believing that given their past history, new product innovation (and) introduction have been very good in terms of subscription receipts.”

The Toronto benchmark set its previous record high of 14,646.82 last July. Since then, commodity prices have remained red hot, but markets around the world have been rocked by massive writeoffs among financial companies and tight credit markets as a result of the U.S. subprime mortgage crisis.

“It’s been nine, 10 months of pretty painful markets,” Nakamoto said.

He added that actions by central bankers, including lowering interest rates, increasing liquidity and bailing out companies such as Bear Stearns BSC.N have helped give markets some traction and have improved “shattered” investor confidence.

“I don’t think we’re at the euphoria stage,” he said. “There’s no way to really judge that, but I don’t get the general sense that we’re just throwing money at the market.”

Half of Bay Street’s 10 main sectors finished higher, while one ended flat. On the downside, the materials sector was off 0.2 percent, while its mining subindex lost 0.7 percent. Inmet Mining IMN.TO was down C$2.14, or 2.7 percent, at C$77.46, while Fording Canadian Coal Trust FDG_u.TO slid C$1.59, or 2.2 percent, to C$70.00.

Fertilizer company Potash Corp of Saskatchewan (POT.TO) bucked the resource sector’s trend, gaining C$3.25, or 1.6 percent, to C$201.75.

Market volume was 341 million shares worth C$7.2 billion. Advancers outpaced decliners 807 to 787. The blue chip S&P/TSX 60 index .TSE60 closed up 11.50 points, or 1.33 percent, at 874.96.

On Wall Street, stocks were also helped by RIM’s announcement. The Dow Jones industrial average .DJI closed up 130.43 points, or 1.02 percent, at 12,876.31, and the Nasdaq Composite Index .IXIC rose 42.97 points, or 1.76 percent, to 2,488.49. ($1=$1.00 Canadian) (Editing by Peter Galloway)

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