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Canadian Stocks Rise as TransCanada Paces Gains in Energy Shares

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Jan. 9 (Bloomberg) -- Canadian stocks rose for a second day, led by gains in industrial and energy shares, as TransCanada Corp. agreed to build a C$5 billion ($5.1 billion) pipeline to a natural gas export terminal in British Columbia.

TransCanada, builder of the Keystone XL pipeline, advanced 2.4 percent. MacDonald Dettwiler & Associates Ltd. climbed 5.2 percent after winning a satellite contract. Pacific Rubiales Energy Corp. added 5.3 percent after Colombia’s largest private oil producer said output at its largest field increased faster than expected. First Quantum Minerals Ltd. fell 4.4 percent as it took its C$5.1 billion bid for Inmet Mining Corp. hostile.

The Standard & Poor’s/TSX Composite Index rose 17.43 points, or 0.1 percent, to 12,522.24 in Toronto. The benchmark gauge has gained 0.7 percent this year, trailing every developed market in the world.

“The volatility index is very low right now, and it means very low market movement unless you get something incredibly newsworthy,” said Arthur Salzer, chief executive officer with Northland Wealth Management in Toronto. His firm manages about C$225 million. “Over the next couple of weeks we’ll start talking about the debt ceiling again. While we’re not hearing that news you’ll get moderate to stronger equity prices because of the low volatility. People just aren’t worried about the risks yet.”

Volatility Index

The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 1.4 percent to 13.81, erasing earlier losses of as much as 2.9 percent.

The U.S. officially hit its debt ceiling of authorized borrowing of about $16.4 trillion on Dec. 31 and has been financing the government using extraordinary measures since. The government will exhaust that avenue as early as mid-February, the Congressional Budget Office says.

Seven of 10 industries advanced, with trading volume 3.1 perent lower than the 30-day average.

TransCanada rose 2.4 percent to C$48.39 after agreeing to design, build and own the Prince Rupert natural gas transmission project. Progress Energy Canada Ltd., purchased by Petroliam Nasional Bhd last month, selected TransCanada to build the conduit, the statement said.

Pacific Rubiales advanced 5.3 percent to C$23.15. Gross production at the Rubiales field, which accounts for 60 percent of the company’s output, rose to 210,000 barrels a day from 190,000 barrels a day in December, Chief Executive Officer Ronald Pantin said during a conference call today.

Bombardier Inc. added 1 percent to C$3.90 as it is reviving a sale of high yield, high-risk bonds that was delayed after its credit rating was cut. The maker of the Learjet and Challenger aircrafts doubled the sale to $2 billion, said a person familiar with the deal who asked not to be identified because terms aren’t set.

Satellite Contract

MacDonald Dettwiler jumped 5.2 percent to C$60.20 after the Richmond, British Columbia-based company won a contract to develop satellites for the Canadian government worth C$706 million.

The company will help build three RADARSAT satellites to be launched in 2018 that will be used to monitor the nation’s land, oceans and coastal approaches, Christian Paradis, Federal Industry Minister, said in an e-mailed statement.

First Quantum slipped 4.4 percent to C$20.59 after going directly to Inmet shareholders with its C$72-a-share offer. Investors have until Feb. 14 to back the offer, which requires acceptance by at least 66 percent of Inmet shareholders.

Alacer Gold Corp. lost 7.2 percent to C$4.38. Kinross Gold Corp. slipped 1.9 percent to C$9.21. Futures for February delivery of the metal fell 0.4 percent to settle at $1,655.50 an ounce on the Comex in New York.

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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