Canadian Stocks Rise as Energy Companies Gain on Egypt Unrest

Canadian stocks advanced, finishing a seventh-straight monthly gain, as energy producers rallied after Exxon Mobil Corp.’s profit beat analysts’ forecasts and crude futures gained.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, rose 3.6 percent as continued unrest in Egypt spurred concern Suez Canal traffic may be disrupted. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, increased 4.8 percent after Brian MacArthur, an analyst at UBS AG, raised his rating on the shares. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, climbed 2 percent as corn and wheat advanced.

The Standard & Poor’s/TSX Composite Index rose 114.41 points, or 0.9 percent, to 13,551.99 for a 0.8 percent advance in January. The series of seven straight monthly gains is the longest since September 2009.

“Corporate earnings are strong and economic conditions are getting better,” said Sadiq Adatia, who oversees C$12 billion ($12 billion) of assets as Toronto-based chief investment officer at Russell Investments Canada. “GDP numbers in Canada and the U.S. are looking pretty good for the year. Canadian companies have a lot of exposure to the U.S.”

Beating Estimates

Of the 187 Standard & Poor’s 500 Index companies to report profits since Jan 10, 139 have beaten analyst estimates, Bloomberg data show, while 12 of the 16 S&P/TSX companies to report have exceeded forecasts. Canada’s gross domestic product grew at the fastest pace in eight months in November, boosted by oil production, Statistics Canada said today.

Oil gained 3.2 percent to a 27-month high of $92.19 a barrel in New York. Brent crude, which is used to price two- thirds of the world’s oil supply, rose above $100 a barrel for the first time since 2008.

Exxon Mobil, the world’s largest company, posted its biggest quarterly profit in more than two years as energy demand boosted oil and fuel prices.

“With oil you are seeing volatility depending on what conditions you hear about the global economy,” Adatia said. “It probably has an $85 to $95 target, and a lot of energy companies have not yet priced those in, so there’s a real upside to the market.”

Energy Producers

The S&P/TSX Energy Index surged the most since Nov. 4. Canadian Natural advanced 3.6 percent to C$44.65. Suncor Energy Inc., Canada’s biggest oil and gas producer, increased 3.6 percent to C$41.46.

Imperial Oil Ltd., Exxon Mobil’s majority-owned Canadian unit, rallied 4.6 percent, the most in 22 months, to C$44.65 after topping its average fourth-quarter analyst profit estimate by 40 percent, excluding certain items.

Oil-sands developer BlackPearl Resources Inc. advanced 5.3 percent to C$7.53. At least six analysts have raised their share-price estimate on the stock since the company announced an increase in reserves on Jan. 27.

Oil and gas producer Transglobe Energy Corp. plunged 9 percent to C$12.20. The company operates in Egypt and Yemen.

Uranium producers climbed after TradeTech LLC reported the metal used in nuclear power plants rose 4.3 percent last week to the highest since March 2008.

Cameco Corp., the world’s second-largest uranium producer, gained 3.9 percent to C$41.52, the highest since July 2008. Denison Mines Corp., which produces uranium in the U.S. and Canada, surged 11 percent to C$3.75 to lead the S&P/TSX. Uranium One Inc, the mining company controlled by Moscow-based ARMZ Uranium Holding, soared 8.6 percent to C$6.55.

Grande Cache Coal Corp., which mines in Alberta, jumped 8.5 percent to C$10.78 after Alpha Natural Resources Inc. agreed to buy Virginia-based coal-mining rival Massey Energy Co. for $7.1 billion.

Upgraded

Teck increased 4.8 percent to C$60.65 after MacArthur boosted his rating on the shares to “buy” from “neutral.” In a note to clients, MacArthur cited the shares’ decline of more than 8 percent since from mid-January to Jan. 28.

Potash Corp. gained 2 percent from a 28-month high to C$177.40. The unrest in North Africa will lead to “hoarding of agricultural products” including wheat, Goldman Sachs Group Inc. said in a report today.

To contact the reporters on this story; Jennifer A. Johnson in New York at Jjohnson156@bloomberg.net; 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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