Canadian stocks rose for a fourth day, extending a two-year high, as Royal Bank (RY) of Canada soared to a record close and energy producers surged on accelerating economic growth in China.
Royal Bank gained 1.2 percent as the market value of the nation’s largest lender rose past C$100 billion for the first time. Bankers Petroleum Ltd. and Advantage Oil & Gas Ltd. (AAV) climbed more than 2.7 percent as oil companies advanced. H&R Real Estate Investment Trust and Canadian Apartment Properties REIT added at least 2.5 percent to pace gains among financial stocks. Athabasca Oil Corp. tumbled 9.9 percent after an Alberta court decided to allow an aboriginal group to appeal an approval of the company’s Dover oil-sands project.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 99.64 points, or 0.8 percent, to 13,136 at 4 p.m. in Toronto. The benchmark Canadian equity gauge rose each of the four sessions in a holiday-shortened week, gaining 1.9 percent in the period for the best weekly gain since July. The index finished the week at the highest level since July 2011.
“There’s a lot of positive news pushing the markets up,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. His firm manages about C$550 million ($534.8 million). “Commodities have been holding up. The China numbers are a big plus. It’s a good continuation of the rally we had since the U.S. reached an accord on raising the debt limit.”
China’s economic growth accelerated for the first time in three quarters, with gross domestic product gaining 7.8 percent in the third quarter, matching the median estimate in a Bloomberg survey. The country is Canada’s second-largest trading partner.
U.S. Congressional leaders agreed to a deal this week to end a government shutdown and avert the threat of a default following weeks of stalemate.
Royal Bank Record
Royal Bank, the nation’s largest company, jumped 1.2 percent to C$69.53, the seventh straight gain that left the stock at a record. The market value for Royal Bank climbed to C$100.1 billion, the first bank in Canada to break that mark.
Bank stocks, which have been undervalued compared with other Canadian companies, are getting a lift from good housing data, according Peter Routledge, a National Bank Financial analyst.
Toronto-Dominion Bank, Bank of Nova Scotia and National Bank of Canada also reached record highs, while the Bank of Montreal soared 1 percent to C$71.76, the highest since April 2007.
Bankers Petroleum added 3.2 percent to C$4.17 and Advantage Oil & Gas increased 2.7 percent to C$4.19 as oil producers rallied 0.9 percent as a group, for the highest close since March 2012. Crude advanced as much as 1 percent in New York before paring gains.
Nine of 10 industries in the S&P/TSX rose as trading volume was 6.4 percent below the 30-day average.
H&R REIT jumped 2.6 percent to C$21.65 and Canadian Apartment REIT climbed 2.5 percent to C$21.87 as financial stocks increased 0.8 percent.
Investors are buying into higher-yielding stocks such as REITs as bond yields have fallen since the U.S. resolution to its budget impasse, Gauthier said.
“Bonds continue to rally in the post-shutdown environment,” said Mark Chandler, head of Canadian fixed income strategy with RBC Dominion Securities Inc., in a report to clients.
Telus Corp. rallied 2.1 percent to C$35.22 and Rogers Communications Inc. added 1.4 percent to C$46.39 as telephone stocks advanced 1.4 percent as a group, the most in the S&P/TSX.
Bombardier Inc. (BBD/B) increased 1.8 percent to C$5.08 after disclosing CDB Leasing Co., a Chinese company, is a customer with a firm order of 15 CSeries jetliners and an option for another 15 of the aircraft. The contract is worth as much as $2.07 billion.
BlackBerry Ltd., the smartphone maker looking to sell itself, rose 2.4 percent to C$8.64 for a second day of gains. Lenovo Group Ltd., the Beijing-based computer manufacturer, has signed a non-disclosure agreement with BlackBerry and is considering a bid for the company, Dow Jones reported yesterday, citing people familiar with the situation.
Athabasca Oil sank 9.9 percent to C$6.27, the most since May. The Alberta Energy Regulator on Aug. 6 approved the company’s Dover proposal, noting in its 40-page decision that the project won’t have a direct impact on the Moose Lake area, a traditional territory of the Fort McKay First Nation.
The aboriginal group, which is surrounded by oil sands operations, had requested a 20-kilometer (12-mile) buffer around the project to protect their traditional hunting territory.
To contact the reporter on this story: Eric Lam in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Lynn Thomasson at email@example.com