Canada Stocks Rise to Highest Since March Amid China Export Data

Canadian stocks rose to the highest in almost six months, as data showed building permits surged to a record and exports in China increased more than expected.

Potash Corp. of Saskatchewan Inc. rallied 4.8 percent amid speculation a potential stake sale in OAO Uralkali may help bolster global prices for the commodity. BlackBerry (BB) Ltd. climbed 5.9 percent after a Sunday Times report said Fairfax Financial Holdings Ltd. is close to making a bid for the smartphone maker. Gabriel Resources (GBU) Ltd. plunged 54 percent as Romania’s parliament is set to reject the company’s planned gold mine because of environmental issues.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 33.72 points, or 0.3 percent, to 12,854.64 at 4 p.m. in Toronto, the highest close since March 12. The benchmark Canadian equity gauge has advanced 3.4 percent this year. Trading was in line with the 30-day average.

“There are long-term worries in terms of high debt levels, but there is no impending housing market crash,” Todd Johnson, a portfolio manager at Winnipeg, Manitoba-based BCV Asset Management, said in a phone interview. His firm oversees C$510 million ($492 million). “Canada is seen as a proxy for natural resources and good news out of China can cause traders to buy Canada. There is a reflexive trade.”

Building Permits

Canadian building permits rose to a record in July as the value of projects such as shopping malls and office buildings almost doubled, government figures showed today. Canada’s housing market has been under pressure as household debt levels reached a record share of income last year. The central bank last week said there are signs of a “constructive evolution” of household imbalances.

In China, exports increased more than estimated in August and inflation stayed below a government target, helping Premier Li Keqiang sustain a rebound in the world’s second-largest economy from a two-quarter slowdown. China is the world’s largest consumer of commodities and Canada’s second-biggest trading partner.

The S&P/TSX has surged 8.6 percent from a seven-month low in June as data showed domestic demand continues to lead the economy and growth in China improves.

Nine out of 10 industry groups in the S&P/TSX advanced today. Technology stocks added 1.5 percent for the biggest gain. Utility companies dropped 0.7 percent.

Consumer-discretionary stocks contributed most to gains in the index. Alimentation Couche-Tard jumped 1.9 percent to C$63.08. Loblaw Cos. added 1 percent to C$46.19.

Potash, Smartphones

Potash (POT) Corp. jumped 4.8 percent to C$32.90, the highest since July. Billionaire investor Suleiman Kerimov may sell his stake in Uralkali, the world’s largest potash producer, Forbes’s Russian edition said. Uralkali in July abandoned limits on output that underpinned prices and quit a trading venture with Belarus that controlled more than 40 percent of global exports.

BlackBerry climbed 5.9 percent to C$11.96, its best close since June. Prem Watsa, a Toronto businessman, and his investment firm Fairfax Financial, have billions of dollars in backing from Canada Pension Plan Investment Board to make a bid for the rest of the smartphone maker, the Sunday Times reported yesterday, without saying where it got the information. Fairfax owns almost 10 percent of BlackBerry.

Oncolytics Biotech Inc. surged 12 percent to C$3.09. The specialty pharmaceutical company said a U.S. Phase 2 study on its experimental lung-cancer treatment, Reolysin, showed positive tumor response data.

Gabriel Resources plunged 54 percent to 68 Canadian cents, the lowest close since 1999. Romanian Prime Minister Victor Ponta urged lawmakers to vote to reject plans for the company’s proposed Rosia Montana gold mine. Parliament should “quickly vote” on whether to drop the project as opposition appears insurmountable, Ponta said.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net; Eric Lam in Toronto at elam87@bloomberg.net;

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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