BLBG: Emerging-Market Equities Rise to Highest Since July 2008; Currencies Climb
Emerging-market stocks rose, driving the benchmark index to the highest since July 2008, and currencies gained on speculation fund inflows will increase as developing economies weather a slowing U.S. recovery.
The MSCI Emerging Markets Index added 0.5 percent to 1,048.97 as of 2:20 p.m. in Singapore, surpassing the previous high for 2010, set on April 15. The MSCI China Index gained 0.4 percent. Malaysia’s ringgit and the Thai baht both rose to 13- year highs, pacing the advance among currencies. Financial markets are closed in mainland China, Taiwan and South Korea.
Belle International Holdings Ltd. led gains among Chinese retailers in Hong Kong on optimism holidays in China will spur travel and spending. PetroChina Co. and PT International Nickel advanced along with commodity prices. Malaysia’s Gamuda Bhd. jumped to a 31-month high on speculation the company will benefit from proposals for a mass rail project in Kuala Lumpur.
“The perception among investors is that Asia is the most attractive destination on the growth front,” said Dariusz Kowalczyk, chief economist at Credit Agricole CIB in Hong Kong.
Most investors expect China to become the world’s biggest economy over the next two decades, according to a global quarterly poll of 1,408 investors, analysts and traders who are Bloomberg subscribers. The Reserve Bank of India said last week the nation’s economic growth remains “steady” while the Hong Kong Monetary Authority said yesterday the city’s economy will grow at a “moderate” pace through the end of this year.
The U.S. Federal Reserve said yesterday it’s willing to ease monetary policy further to spur growth and support prices while refraining from expanding its holdings of securities. Policy makers said the pace of recovery and job growth have “slowed in recent months.”
Belle Jumps
Belle, a clothing retailer, jumped 4.5 percent. China Dongxiang Group Co., a sportswear retailer, surged 5 percent. The Mid-Autumn festival holiday in mainland China begins today and runs through Sept. 26 while the National Day holidays, also known as Golden Week, take place from Oct. 1 to Oct. 7.
“Shares related to China’s tourism and consumer themes are in focus as the Mid-Autumn Festival holiday and the upcoming Golden Week in China will likely benefit retailers and Macau- related shares,” said Steven Leung, director of institutional sales at UOB-Kay Hian Ltd.
PetroChina, the nation’s largest oil explorer, gained 1.5 percent. PTT Pcl, Thailand’s largest energy company, added 1.7 percent. Inco, Indonesia’s biggest nickel producer, rose 0.6 percent.
Crude oil advanced 0.7 percent to $75.51 a barrel on the New York Mercantile Exchange. Copper climbed for the first day in three, with zinc, nickel and lead also advancing.
Gamuda, MMC
Gamuda jumped 5.1 percent, posting the biggest gain by percentage on the MSCI index of developing markets. MMC Corp. rallied 4.7 percent and YTL Corp. added 3 percent. The companies may gain from government efforts to upgrade the country’s infrastructure network with two potential rail projects, CIMB Investment Bank Bhd. and other brokerages said.
The ringgit and Thailand’s baht both climbed 0.3 percent to 3.09 per dollar and 30.65, respectively, according to data compiled by Bloomberg. Indonesia’s rupiah strengthened 0.1 percent to 8,953.
The Bombay Stock Exchange’s Sensitive Index swung between gains and losses after yesterday rallying above 20,000 for the first time since January 2008. India’s economy is in a “sweet spot,” helping to support stock gains, while concerns of global deflation may boost the nation’s attractiveness to investors, Deutsche Bank AG said in a report.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net
