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Canada Stocks Rise to Highest Since 2011 as Gold Shares Climb

Canadian stocks rose, with the Standard & Poor’s/TSX Composite Index (SPTSX) climbing above the 13,000 level for the first time since July 2011, as precious metals producers jumped in the wake of a debt-limit deal in Washington.

B2Gold Corp. (BTO) and Eldorado Gold Corp. surged at least 8.9 percent as the 10 biggest gains in the benchmark equity gauge were miners. Africa Oil Corp. surged 14 percent after deciding to sell shares to fund exploration. Canadian Natural Resources Ltd. (CNQ) and Bankers Petroleum Ltd. each slipped 1.5 percent as the price of crude fell on rising U.S. inventories. CGI Group (GIB/A) Inc. fell 3.4 percent, retreating from a record high.

The S&P/TSX rose 79.15 points, or 0.6 percent, to 13,036.36 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has climbed 1.1 percent this week.

“The gains today are primarily driven by materials and gold,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. He helps manage C$220 million ($213.7 million). “The resolution of yesterday is what’s driving the buying today. Once that plan was unveiled, and it wasn’t the best plan in the world, as it’s a kick the can down the road kind of plan, people wanted some protection. You’re seeing a rally in gold as insurance.”

U.S. lawmakers avoided a debt default and ended a government shutdown, pushing through a bill that funds the government through Jan. 15, 2014, and suspends the debt limit through Feb. 7.

Raw-materials producers jumped 2.7 percent as a group, as six industries among 10 in the S&P/TSX advanced. Trading volume was 2.5 percent above the 30-day average at this time of the day.

Gold Rally

Fortuna Silver Mines Inc. (FVI) climbed 12 percent to C$3.71 and First Majestic Silver Corp. rose 8.4 percent to C$11.80 to pace gains in the S&P/TSX Materials Index. Silver added 2.7 percent in New York. Endeavour Silver Corp. increased 8.3 percent to C$4.31.

B2Gold rallied 8.9 percent to C$2.46 and Eldorado Gold jumped 9.3 percent to C$6.38 as 22 of 24 members of the S&P/TSX Gold Index advanced. The price of the metal jumped the most in a month, surging 3.2 percent to $1,323 an ounce in New York.

Barrick Gold Corp. (ABX), the world’s largest producer of the metal, increased 4.6 percent to C$19.06 and Goldcorp Inc. advanced 3.4 percent to C$25.24.

Africa Oil

Africa Oil (AOI), the oil and gas explorer with licenses in Kenya, Ethiopia and Somalia, soared 14 percent to C$9.60, the highest close in almost 11 months. The company will sell as many as 56.5 million shares at SEK 51.75 (C$8.25) a share for gross proceeds of $450 million, Africa Oil said in a statement.

The cash will be used to fund Africa Oil’s future exploration and development activities in East Africa, as well as for general capital purposes.

CGI Group tumbled 3.4 percent to C$37.09, snapping four days of gains. The stock rallied 5.6 percent from Oct. 9 to a record high of C$38.41 yesterday. Open Text Corp. lost 0.7 percent to C$78.20.

BlackBerry Ltd. (BB), the smartphone maker looking to sell itself, rose 0.2 percent to C$8.44, erasing earlier losses of as much as 1.3 percent.

Lenovo Group Ltd., the world’s largest personal-computer maker, has signed a non-disclosure agreement with BlackBerry and is considering a bid for the company, Dow Jones reported.

BlackBerry has tumbled 28 percent this year. The company said it has begun selling unlocked BlackBerry smartphones online directly to consumers in the U.S., including the Z10 and Q10 models.

Canadian Natural Resources slipped 1.5 percent to C$33.26 and Bankers Petroleum retreated 1.5 percent to C$4.04 as crude dropped to a three-month low. U.S. supplies increased by 5.94 million barrels last week, according to the American Petroleum Institute yesterday.

To contact the reporter on this story: 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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