Canada Stocks Erase Losses as REITs, Oil Offset BlackBerry Drop

Canadian stocks erased earlier losses as real estate companies gained and oil advanced, offsetting declines among gold companies after tensions eased on Syria and economists forecast further losses in the metal.

Dundee Real Estate Investment Trust and Boardwalk REIT gained at least 1.1 percent. Suncor Energy Inc. added 0.7 percent as oil rose for the first time in three days. Dollarama Inc. jumped 7 percent after second-quarter earnings beat estimates as same-store sales climbed. Rio Alto Mining Ltd. declined 5.8 percent as gold touched a three-week low. Goldman Sachs Group Inc. said the metal will extend losses to 2014. BlackBerry Ltd. dropped 5.2 percent on concern a domestic buyout of the smartphone maker will not happen.

The Standard & Poor’s/TSX Composite Index rose 0.94 point, or less than 0.1 percent, to 12,825.42 at 4 p.m. in Toronto, erasing earlier losses of as much as 0.5 percent. The benchmark Canadian equity gauge has risen 3.2 percent this year.

“People are still biding time a little bit to see what’s happening in Syria and with tapering,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about $4 billion. “I just don’t think there’s a lot of conviction.”

Gold for December delivery was little changed, after earlier slipping to as low as $1,356. Gold, which has slumped 19 percent this year after a 12-year rally, will extend losses into 2014 as the U.S. Federal Reserve tapers stimulus, Goldman Sachs analysts including Jeffrey Currie and Damien Courvalin said in a report today.

Goldman Forecast

Goldman’s economists expect Fed policy makers to curb quantitative easing at their Sept. 17-18 meeting as the economy improves, the report said. The stimulus has helped the Standard & Poor’s 500 Index rally as much as 153 percent since the beginning of the bull market in March 2009.

Rio Alto Mining slumped 5.8 percent to C$2.29 as raw-materials stocks fell 0.2 percent as a group.

U.S. President Barack Obama asked Congress to delay a vote on U.S. military action against Syria, saying in a speech yesterday he would prefer a peaceful solution to the conflict and saw “encouraging signs” of diplomacy ending the confrontation.

Dundee REIT rose 1.8 percent to C$29.98 and Boardwalk REIT added 1.1 percent to C$56.95 as the S&P/TSX Capped REIT Index rose to a three-week high. REITs have advanced for three days, the longest streak in a month.

Canadian Tire Corp., the country’s largest sporting goods retailer, said yesterday it plans to raise about C$260 million in an initial public offering for its REIT, according to two people familiar with the sale.

Dollarama Soars

Dollarama surged 7 percent to C$79.30, a record high, after posting adjusted earnings of 82 Canadian cents a share, ahead of analysts’ estimates for 78 cents. The dollar-store operator’s same-store sales increased 6.2 percent, compared with 3.7 percent in the first quarter.

Ithaca Energy Inc. soared 15 percent to C$2.35, the biggest gain in 15 months, after reporting positive drilling results at its Stella oil field in the North Sea.

“Ithaca’s operating update confirms that the Stella development project is continuing as planned,” said James Hosie, an analyst with RBC Capital Markets in a note to clients today. “The project is central to Ithaca’s outlook.”

Suncor added 0.7 percent to C$36.68 as crude rose in New York. Stockpiles at Cushing, Oklahoma, tumbled to the lowest level since February 2012.

BlackBerry retreated 5.2 percent to C$10.74. The Waterloo, Ontario-based company has registered to meet with Canadian lawmakers to discuss the Investment Canada Act, which sets rules for foreign acquisitions of local companies, according to federal lobbying documents.

“It’s a difficult situation for Ottawa. They may be thinking of a Chinese buyer. What other country would need that kind of lobbying?” Nakamoto said. “You wouldn’t need this for a U.S. buyer.”

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