Bloomberg News

Canadian Stocks Rise as Energy Producers Rally With Fuel Prices

January 23, 2012

Jan. 23 (Bloomberg) -- Canadian stocks rose to a four-month high, led by energy producers and banks, as oil and gas futures gained and European finance ministers gathered in Brussels to discuss new budget rules and a Greek debt swap.

Encana Corp., the country’s largest gas producer, advanced 7.4 percent as the price of the fuel jumped after Chesapeake Energy Corp. announced immediate output cuts. Minefinders Corp., which produces gold and silver in Mexico, soared 22 percent after agreeing to be bought by Pan American Silver Corp. for C$1.5 billion ($1.49 billion). BlackBerry maker Research In Motion Ltd. declined 9.1 percent after new Chief Executive Officer Thorsten Heins said he doesn’t plan “drastic change.”

The S&P/TSX Composite Index increased 124.60 points, or 1 percent, to 12,521.70 at 4 p.m. Toronto time, the highest level since Sept. 8.

“Natural gas did a 360 today,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview. The firm oversees about C$1 billion. “You got the first of production cuts. You start to get that people are a little more adventuresome.”

The index climbed each of the last five weeks, the longest streak since October 2010, as U.S. data indicated strengthening employment and manufacturing in the country that bought 75 percent of Canada’s exports in 2010.

Crude oil gained 1.3 percent on the New York Mercantile Exchange after settling at a one-month low Jan. 20. Natural gas rallied the most in two years after Chesapeake said it will “immediately curtail” output of 500 million cubic feet a day and will cut planned spending in gas fields by 70 percent from 2011 levels to $900 million.

Encana, Canadian Natural

Encana advanced 7.4 percent to C$19. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, increased 3.2 percent to C$40.21. PetroBakken Energy Ltd., an oil and gas producer with operations in Canada, climbed 3.4 percent to C$16.28 after saying it received a C$150 million increase to its credit facility.

Pan Orient Energy Corp., which produces oil and gas in Thailand, surged 27 percent to C$3.43 after reporting exploration results. Ithaca Energy Inc., which explores in the North Sea, rallied 14 percent to C$2.84 after saying it received a confidential, non-binding takeover offer.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, advanced 1.4 percent to C$45.93. Some nitrogen fertilizers produced by competitors require natural gas to manufacture. Corn and wheat futures climbed on the Chicago Board of Trade.

Banks, Insurers

The S&P/TSX Financials Index rose for a sixth day, the longest streak in 11 months. Royal Bank of Canada, the country’s biggest lender by assets, gained 1.8 percent to C$54.82. Toronto-Dominion Bank, its largest domestic rival, advanced 1.3 percent to C$80.17. Manulife Financial Corp., North America’s fourth-biggest insurer, increased 0.9 percent to C$12.76 to extend its monthly rally to 18 percent.

Minefinders surged 22 percent, the most since November 2008, to C$14.06 after Pan American Silver agreed to buy the Vancouver-based company for cash and shares. Pan American slumped 10 percent to C$22.40. Fortuna Silver Mines Inc., which operates in Peru, climbed 11 percent to C$6.28.

B2Gold Corp., which mines in Nicaragua, rose 6.4 percent to C$3.49 after saying production may increase as much as 11 percent this year.

Augusta Resource Corp., which is developing a copper project in Arizona, sank 11 percent, the most since Sept. 30, to C$2.89 after the U.S. Environmental Protection Agency called for a review of the project’s draft Clean Water Act permit.

RIM tumbled 9.1 percent to C$15.67 after Heins announced no significant strategy changes on a conference call. Heins replaced former co-CEOs Jim Balsillie and Mike Lazaridis today after shares of the Waterloo, Ontario-based company plunged 75 percent last year.

--With assistance from Christine Buurma in New York. Editors: Stephen Kleege, Joanna Ossinger

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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