Canada Stocks Rise as Gold Shares Advance on Earnings Amid Fed
Canadian stocks rose, erasing earlier losses, as earnings from Yamana Gold Inc. pushed gold shares higher and investors analyzed a statement from the U.S. Federal Reserve for clues on when it may scale back stimulus.
OceanaGold Corp. climbed 16 percent after raising its copper production target and cutting its cost estimates. Yamana Gold gained 4.8 percent as earnings topped forecasts. Wi-Lan Inc. (WIN) jumped 6.5 percent as the company considers strategic options including a sale after losing a patent case. B2Gold Corp. fell 1.1 percent as third-quarter revenue declined amid rising costs.
The Standard & Poor’s/TSX Composite Index (SPTSX) rose 14.72 points, or 0.1 percent, to 13,455.33 at 4 p.m. in Toronto, erasing earlier losses of as much as 0.6 percent. The benchmark Canadian equity gauge has advanced 5.2 percent in October, heading for the biggest monthly gain in two years.
“The tension is going to shift back to the economy and the Fed is clarifying further that what they do will be very dependent on economic data,” Youssef Zohny, portfolio manager with Stenner Investment Partners of Richardson GMP Ltd., said from Vancouver. Richardson GMP manages about C$16 billion ($15.3 billion). “It seems like the Fed decision was being anticipated. Investors are going to be keeping an eye out for the data starting next week, which will likely be more important than this announcement.”
The U.S. central bank said it sees improvement in economic activity even as it maintained its $85 billion in monthly purchases. The Fed said it needs to see more evidence that the economy will continue to improve. The central bank will keep stimulus measures at the current level until March 2014, economists forecast in a Bloomberg survey this month.
OceanaGold soared 16 percent to C$1.71 and Yamana rallied 4.8 percent to C$10.71 to pace gains among raw-materials stocks as five of 10 industries in the S&P/TSX advanced. Trading volume was in line with the 30-day average.
OceanaGold raised its 2013 copper production guidance to 18,000 to 20,000 tons from 15,000 to 18,000 tons. The company produced 6,150 tons of copper in the third quarter and 74,697 ounces of gold.
The company also lowered its cash costs forecasts for the year to $550 to $650 an ounce from $650 to $800 an ounce earlier.
Yamana reported adjusted earnings of 9 cents a share in the third quarter, compared with analysts’ estimates for 8 cents. Production climbed 4 percent from the second quarter and revenue increased, the company said.
Cameco Corp. (CCO) increased 4.6 percent to C$19.87. The company said revenue this year is now forecast to grow 30 percent to 35 percent, compared with earlier projections of 25 percent to 30 percent.
Cameco reported third-quarter adjusted earnings of 53 Canadian cents a share, ahead of analysts’ estimates of 18 cents.
Copper Mountain Mining Corp. (CUM) jumped 5.3 percent to C$1.78 as revenue climbed 42 percent compared with a year ago. Copper rose the most in five weeks in New York as inventories tracked by the London Metal Exchange shrank for a 40th straight session.
B2Gold dropped 1.1 percent to C$2.69 after reporting third-quarter revenue of $128.7 million, short of analysts’ estimates for $134.7 million. The company now forecasts 2013 cash costs of $675 to $690 an ounce, compared with $630 to $660 earlier.
Wi-Lan, the Ottawa-based patent licensing company, climbed 6.5 percent to C$3.30. Wi-Lan will consider changes to dividend policy or other forms of return of capital, as well as “the acquisition or disposition of assets, joint ventures, the sale of the company, alternative operating models or continuing with the current business plan,” it said today in a statement.
The company lost a patent-infringement trial against Apple Inc. on Oct. 23 in which Wi-Lan was seeking $248 million in royalties for wireless technology used in mobile devices.
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