MONTREAL, Sept 11 (Reuters) - Canadian investment firm Jarislowsky Fraser increased its participation in SNC Lavalin Group to more than 10% as part of a broader asset growth strategy in Canadian equities, the company said on Wednesday, helping lift shares of the engineering and construction firm for a second day.
Shares of SNC jumped as much as 9% in morning trade on Wednesday.
Jarislowsky would be the third-largest shareholder in SNC, according to Refinitiv data and a recent SNC filing, in a move other investors see as a boost for the embattled firm.
SNC shares have tumbled 60% year-to-date as the Montreal-based firm carries out a restructuring plan to improve earnings, reduce risk and contain costs. In July, SNC withdrew its forecast for 2019, citing significantly lower results as it considers options for its resources unit and exits fixed-price contracts.
One SNC shareholder, an asset manager, told Reuters that Jarislowsky Fraser’s increased position shows confidence in firm. Jarislowsky Fraser’s founder Stephen Jarislowsky has been outspoken on SNC, including its recent sale of a coveted stake in a highway toll road operator.
“Eventually, if more buyers step in, the stock should go up,” said the shareholder who spoke on condition of anonymity.
As of August 31, 2019, Jarislowsky Fraser held 10.81% of SNC shares, according to filings made public on September 10. “The increased participation in SNC-Lavalin is in part a result of recent asset growth in the Canadian equity strategy,” Jarislowsky Fraser said in a statement. “This security, along with all our holdings, currently meets our criteria.”
Reporting By Allison Lampert Editing by Nick Zieminski