Bloomberg News

Canadian Stocks Complete Monthly Gain on Raw Materials’ Rally

January 31, 2012

Jan. 31 (Bloomberg) -- Canadian stocks rose, completing a monthly gain, as raw-materials producers finished their biggest advance in a month since August 2010.

Metro Inc., Canada’s third-largest grocer, rose 3 percent after its first-quarter earnings beat all nine estimates in a Bloomberg survey. Oil-sands developer BlackPearl Resources Inc. plunged 9.6 percent after saying it missed its year-end production goal. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped 1 percent after an analyst at Goldman Sachs Group Inc. cut her rating on the stock.

The S&P/TSX Composite Index increased 15.73 points, or 0.1 percent, to 12,452.15, extending the monthly climb to 4.2 percent.

“We’ve had some fairly good reaffirmation that the U.S. economy is on track,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a note to clients. The firm oversees about C$5.5 billion ($5.5 billion). “It also feels like the European headlines are more in the background. A bit of the risk-on trade is back.”

The index rose for the second month in the last 11. Mining companies gained on economic data showing a stronger U.S. economy and the U.S. Federal Reserve’s plan to keep interest rates at historical lows until at least late 2014. The S&P/TSX slumped 11 percent last year as the European debt crisis led to concern global growth would slow and demand for raw materials would decrease. Resources companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

Dividend Increase

S&P/TSX consumer-staples companies advanced the most in two months after Metro reported first-quarter earnings that beat the average analyst estimate in a Bloomberg survey by 4.9 percent and boosted its dividend.

Metro gained 3 percent to C$54.74. Viterra Inc., Canada’s largest grain handler, advanced 3.9 percent to C$10.79 as Chicago Board of Trade wheat futures climbed to the highest since September on drought conditions in the central U.S. Alimentation Couche Tard Inc., the owner of Mac’s and Circle K convenience stores, increased 2.9 percent to C$30.45 after Keith E. Howlett, an analyst at Desjardins Securities, began coverage of the company with a “buy” rating.’’

Imperial Oil Ltd., Canada’s second-largest oil company by revenue, rose 2 percent to C$47.78 after its fourth-quarter profit surpassed the average estimate of analysts in a Bloomberg survey by 11 percent, excluding certain items.

Goal Missed

BlackPearl Resources tumbled 9.6 percent to C$4.80 after saying 2011 output averaged more than 9,500 barrels a day, compared with its goal of 11,000 barrels a day. Mark J. Friesen, an analyst at Royal Bank, cut his rating on the shares to “sector perform” from “outperform.”

Mart Resources Inc., which produces oil and gas in Nigeria, sank 19 percent, the most since December 2009, to 87 Canadian cents after saying capacity constraints at an export terminal limited production in December and January.

Potash Corp. lost 1 percent to C$46.98 after Lindsay Drucker Mann, an analyst at Goldman Sachs, reduced her rating on the shares to “neutral” from “buy.” A possible reduction in Indian fertilizer subsidies may reduce consumption, she wrote in a note to clients.

Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, slumped 6.2 percent to C$2.57. Uranium-oxide concentrate for immediate delivery fell 1 percent in the week ending yesterday, Roswell, Georgia-based Ux Consulting Co. said in a report.

Papermaker Fortress Paper Ltd. surged 16 percent, the most since March 2010, to C$39.42 after agreeing to buy and upgrade a mill in Quebec. The purchase is likely to provide a “long overdue catalyst” for the stock, Richard Kelertas, an analyst at Dundee Securities, said in a note to clients.

Westport Innovations Inc., which develops natural-gas engine technologies, jumped 9.3 percent to a 10-year high of C$41.64. The shares soared 23 percent in January as natural gas prices plunged 16 percent on the New York Mercantile Exchange and U.S. President Barack Obama promoted the fuel’s use.

--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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