Canadian Stocks Advance as Gold Gains; Provident Energy Surges

Canadian stocks rose, led by raw-materials producers, as gold gained after Standard & Poor’s cut the credit ratings of nine euro-region countries.

Kinross Gold Corp., Canada’s third-largest gold producer by market value, advanced 2.3 percent as the metal gained on demand for a haven. Provident Energy Ltd., a natural gas liquids storage and transportation company, soared 18 percent after agreeing to be bought by Pembina Pipeline Corp. for about C$11.86 a share. Canadian National Railway Co., the country’s biggest railroad, dropped 2.5 percent in the second day after an analyst at JPMorgan Chase & Co. cut his rating on the shares.

The S&P/TSX Composite Index climbed 27.54 points, or 0.2 percent, to 12,258.60 after three people with knowledge of the transactions said the European Central Bank bought Italian and Spanish bonds today.

“More and more, this is going to rest on the shoulders of Mr. Draghi in terms of providing liquidity to the markets,” Ian Nakamoto, a money manager at MacDougall MacDougall & MacTier Inc. in Toronto, said in a telephone interview, referring to ECB President Mario Draghi. The firm oversees about $4 billion. “Any time you have an increase in the money supply or liquidity being provided to the gold market, that helps gold prices.”

The S&P/TSX climbed each of the past four weeks, the longest streak in nine months, as economic data signaled a strengthening U.S. economy and investors speculated China will enact monetary policies to support growth. The index slumped 11 percent in 2011 as raw-materials and energy producers, which make up 48 percent of Canadian stocks by market value, retreated.

Precious Metals

Gold futures rose in electronic trading in New York. Kinross increased 2.3 percent to C$13.20. Barrick Gold Corp., the world’s largest producer of the metal, climbed 0.7 percent to C$49.78. Pan American Silver Corp., which mines in Mexico, gained 4.1 percent to C$25.67 as silver advanced.

Uranium One Inc., a mining company controlled by Moscow-based ARMZ Uranium Holding, rallied 16 percent, the most since October 2009, to C$2.73 after saying production climbed to a record in 2011.

Denison Mines Corp., another uranium producer, soared 19 percent, the most since May 2009, to C$1.91. Cameco Corp., the world’s biggest company in the industry, climbed 5.1 percent to C$21.71.

Provident Energy surged 18 percent to C$11.20, the highest since March 2009, after Pembina agreed to buy it for C$3.2 billion ($3.1 billion) in shares. Pembina, Canada’s fourth-largest pipeline company by market value, lost 4.3 percent to C$26.70.

Reduced Rating

Canadian National retreated after Thomas R. Wadewitz, an analyst at JPMorgan Chase & Co., reduced his rating on the stock to “underweight” from “neutral” Jan. 13. CN is likely to raise prices less quickly than its U.S. peers, Wadewitz wrote in a note to clients. The shares decreased 2.5 percent to C$76.28 today.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, increased 2.1 percent to C$46.74 after Jacob Bout, an analyst at Canadian Imperial Bank of Commerce, raised his rating on the shares to “sector outperform” from “sector perform.” The analyst cited the shares’ decline in price relative to assets in a note to clients.

Cominar Real Estate Investment Trust, which owns commercial properties in eastern Canada, slipped 2.4 percent to C$21.85 after agreeing to buy Canmarc REIT for C$16.50 a unit. Cominar made an unsolicited bid of C$15.30 a unit in November.

Canmarc rallied 3.3 percent to C$16.52, the highest since it began trading in May 2010.

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