Canada Stocks Reach Record on Earnings as TransForce, Gold GainEric Lam
Canadian stocks rose a fourth day to a record as TransForce Inc. and MDC Partners Inc. jumped on better-than-forecast earnings and metal producers advanced with gold amid mounting conflicts overseas.
TransForce, which provides staff for trucking companies, surged 10 percent as revenue climbed after a series of acquisitions. MDC Partners, an advertising firm, gained 4.9 percent as the company also raised its dividend. Semafo Inc. and Iamgold Corp. increased at least 4.1 percent as gold rallied the most in a week.
The Standard & Poor’s/TSX Composite Index rose 60.59 points, or 0.4 percent, to 15,455.04 at 4 p.m. in Toronto, extending a record. The S&P/TSX advanced 1.2 percent this week for a second weekly gain. The equity index trades at 21.1 times earnings, the highest level since 2010.
“The index is benefiting from its rich resource content,” said Martin Roberge, a strategist at Canaccord Genuity Corp., in a note to clients. “It is very sensitive to global economic growth prospects, and the strong flash manufacturing PMIs released this week bode well for further outperformance.”
The combined average purchasing managers’ index measure across the U.S., Europe, Japan and China so far this year is 52.7, ahead of levels in 2012 and 2013, suggesting potential further gains for the S&P/TSX, Roberge said.
Semafo surged 7.4 percent to C$4.82 and Iamgold added 4.1 percent to C$4.07 as raw-materials stocks jumped 2.1 percent as a group, the most in the S&P/TSX. Seven of 10 industries in the benchmark equity gauge rose on trading volume 13 percent lower than the 30-day average.
Gold for December delivery rose 1 percent to settle at $1,305.30 an ounce in New York, the biggest gain since July 17.
Royal Bank of Canada, the nation’s second-largest lender by assets, added 0.7 percent to C$79.89 and Canadian Imperial Bank of Commerce advanced 0.2 percent to C$100.34, the highest close since 2007. Financial stocks have rallied 1 percent in the past four days.
TransForce jumped 10 percent to C$27.82, a record, after reporting second-quarter profit and sales ahead of analysts’ estimates. Acquisitions including Vitran, Clarke Transport and Clarke Road Transport contributed C$102.3 million to sales in the quarter, the company said.
TransForce also agreed to buy Contrans Group Inc. in a cash deal for C$14.60 a share, or a total equity purchase price of about C$495 million.
MDC advanced 4.9 percent to C$23.92, a one-month high. The company raised its 2014 estimate for adjusted earnings before interest, taxes, depreciation and amortization, Chief Executive Officer Miles Nadal said in a release.
SNC-Lavalin Group Inc., the Montreal-based construction and engineering firm, added 2.2 percent to C$57.74, the highest in three years, after its Candu unit signed a cooperation agreement with the China Nuclear Power Engineering Co. for construction of reactors in Romania.
Dragonwave Inc., a network communications equipment provider, plunged 14 percent to C$1.72, the biggest decline since September. The company said it will sell shares for C$1.80 a unit to raise about C$25 million.