Canadian Stocks Climb, Led by Gold Producers, BlackBerry Shares

Canadian stocks rose after three weeks of losses as China boosted purchases of precious metals and BlackBerry Ltd.’s board said it is considering selling the company.

BlackBerry jumped 10 percent, the most since March, as it announced it will form a special board committee to consider options for the company including joint ventures and partnerships. Barrick Gold Corp. and Eldorado Gold Corp. surged at least 4.1 percent as the metal capped the longest rally in four weeks. Silvercorp Metals Inc. and Silver Wheaton Corp. advanced more than 5.2 percent as silver prices gained. Alliance Grain Traders Inc., a seller of specialty crops such as lentils, gained 5.1 percent after reporting better-than-estimated earnings.

The Standard & Poor’s/TSX Composite Index rose 52.14 points, or 0.4 percent, to 12,594.27 at 4 p.m. in Toronto. Trading volume was 8.3 percent higher than the 30-day average at this time of the day.

“You’re starting to see a bit of outperformance in the TSX on the back of strength in China,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages C$220 million ($214 million). “The Chinese are aggressively buying precious metals, so gold import numbers were quite healthy and that’s leading to a rally in materials.”

China’s domestic purchases of gold jumped 54 percent to 706.4 metric tons in the first half of 2013, compared with a year earlier, the China Gold Association said in a report today. Buying of gold-bar purchases surged 87 percent and jewelry demand increased 44 percent.

Gold Surges

Barrick Gold advanced 4.1 percent to C$18.74 and Eldorado Gold surged 7.6 percent to C$8.76 as all 24 companies in the S&P/TSX Gold Index advanced. The gauge jumped 5.8 percent to 1,649.24, its highest close since July 23. Gold prices rose 1.7 percent to settle at $1,334.20 an ounce in New York. Gold climbed for a fourth straight day, the longest rally since July 11.

Silvercorp Metals jumped 10 percent to C$3.52 and Silver Wheaton added 5.2 percent to C$25.26. Silver for September delivery soared to a seven-week high.

Torex Gold Resources Inc. surged 12 percent to C$1.57. Killian Charles, an analyst at Industrial Alliance Securities Inc., began coverage of the stock today with a buy rating and a price target of C$1.80.

The company’s Morelos gold mine in Mexico is expected to begin production in 2015 and “will work in any gold price environment,” Charles said in a note to clients.

Strategic Alternatives

BlackBerry, based in Waterloo, Ontario, rose 10 percent to C$11.10, the biggest gain since March 13. The announcement today builds on a move last year when BlackBerry hired JPMorgan Chase & Co. and RBC Capital Markets to advise the company on strategic alternatives. At the time, Chief Executive Officer Thorsten Heins said a sale wasn’t the “main direction” he was considering. Prospects have worsened since then, with the new BlackBerry 10 -- the linchpin of a turnaround strategy -- meeting scant demand.

Aimia Inc. climbed 4.1 percent to C$15.93, the highest close in three months. The loyalty program manager said today Toronto-Dominion Bank will become the primary credit-card issuer for its Aeroplan loyalty cards.

The deal ends a 22-year allegiance between Aimia and Canadian Imperial Bank of Commerce. CIBC didn’t match TD Bank’s June conditional agreement with Aimia by an Aug. 9 deadline and is now negotiating a sale of half its Aerogold credit-card portfolio to the other bank.

CIBC gained 2 percent to C$78.47 while TD Bank slipped 0.3 percent to C$86.41.

Alliance Grain Traders increased 5.1 percent to C$16.48, the most in three months. The Regina, Saskatchewan-based company, which buys, processes and sells food ingredients including pasta and rice, reported second-quarter adjusted earnings of 24 Canadian cents a share, ahead of analysts’ estimates for 16 cents. The company said it is “optimistic” as it heads into the North American harvest period.

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