Canada Stocks Decline as Barrick Leads Slump in Gold ProducersEric Lam
Canadian stocks declined to a one-week low, after falling the most in three weeks yesterday, as investors assessed corporate earnings and gold producers slid after Barrick Gold Corp. said it will sell shares.
Barrick, the world’s largest producer of gold, dropped 7.5 percent as it plans to raise at least $3 billion to pay down debt. Taseko Mines Ltd. plunged 9.8 percent after a federal review panel said its project in British Columbia has significant adverse environmental effects. Norbord Inc. jumped 10 percent as the panelboard producer’s earnings topped estimates. Clearwater Seafoods Inc. climbed 8.2 percent after declaring an annual dividend.
The Standard & Poor’s/TSX Composite Index fell 23.80 points, or 0.2 percent, to 13,337.46 at 4 p.m. in Toronto. The benchmark Canadian equity gauge advanced 4.5 percent in October for a fourth month of gains.
“The commodities space is a little soft, and the explanation is the big Barrick deal yesterday,” said Michael O’Brien, fund manager with TD Asset Management Inc., in Toronto. He helps manage C$216 billion ($207 billion) with the firm. “That has an impact on the other gold names as well.”
Gold and energy producers also fell on signs of climbing supplies of raw materials at a time when the prospect of reduced U.S. Federal Reserve stimulus may cut demand.
Data from the U.S. showed an index of manufacturing rose last month to the highest level since April 2011. An earlier report from China indicated the nation’s official manufacturing Purchasing Managers’ Index rose more than estimated in October. The U.S. and China are Canada’s two biggest trading partners.
Barrick sank 7.5 percent to C$18.77, the most in four months. The company said yesterday it plans to raise at least $3 billion through a share offering in order to repay a portion of its $15 billion in debt.
Barrick also said yesterday it will suspend construction at its $8.5 billion Pascua-Lama project to conserve cash.
Osisko Mining Corp. slumped 7.5 percent to C$4.71 and Silvercorp Metals Inc. retreated 5.9 percent to C$3.06 as gold and silver prices declined to two-week lows in New York.
Taseko Mines plunged 9.8 percent to C$2.31, the biggest drop since April, as a review panel said the company’s New Prosperity copper and gold project in British Columbia would affect water quality and grizzly bears in the area.
“The risks are modest and the social and economic benefits are enormous,” the company said in a statement. Taseko said it will challenge the report’s findings.
Legacy Oil & Gas Inc. dropped 4.5 percent to C$6.74 and Suncor Energy Inc. fell 2.9 percent to C$36.80 as crude tumbled below $95 a barrel for the first time since June.
Valeant Pharmaceuticals International Inc. advanced 5.4 percent to C$116.04, the biggest gain in five months, as seven of 10 industries in the S&P/TSX rose. Trading volume was 7.1 percent higher compared with the 30-day average at this time of the day.
Valeant agreed to sell its over-the-counter brand Caladryl in India to Piramal Enterprises Ltd. Terms of the deal were not disclosed. Caladryl is used for minor skin irritations.
Alex Arfaei, an analyst with BMO Capital Markets, separately said in a report a Valeant purchase of some Merck & Co. products would be logical for both companies.
Norbord added 10 percent to C$32.70 as it reported adjusted earnings of 33 cents a share, excluding a one-time income tax recovery, ahead of the 20 cent estimate of Bloomberg analysts.
Prices for wood particle oriented strand board, used in home construction, bottomed in September and is gradually improving, Chief Executive Officer Barrie Shineton said in a statement.
Clearwater Seafoods rallied 8.2 percent to C$6.33, for an eight-year high, after initiating an annual dividend of 10 cents a share.