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Emerging-Market Stocks Rise for a Third Day as China May Ease Tightening
Emerging-market stocks advanced for a third day, with a benchmark index set for a more than two-week high, on speculation China’s government will relax curbs on mortgage lending to sustain an economic recovery.
The MSCI Emerging Markets Index climbed 0.3 percent to 954.89 as of 2 p.m. in Singapore, adding to a 4.2 percent rally last week that was the best weekly performance in seven months. The gauge of 21 developing nations was poised for its highest close since June 23. China’s Shanghai Composite Index rose 0.7 percent to a two-week high.
Poly Real Estate Group Co. jumped after the Southern Metropolis Daily said policy makers may loosen limitations on third-home loans, while government reports showed property prices snapped 15 months of gains and bank lending eased in June. China Life Insurance Co. tumbled on a plan by regulators to remove a cap on interest rates on some products. The Bombay Stock Exchange’s Sensitive Index trimmed some of its gains after the pace of industrial output slowed in May.
“Most of the data point towards a slowdown in economic growth, which is fuelling expectations that the government will ease tightening measures,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million.
Poly Real Estate, China’s second-largest publicly traded developer by market value, gained 4 percent and China Vanke Co., the largest, gained 4.6 percent. Guangzhou R&F Properties Co. gained 4.3 percent in Hong Kong trading. China may loosen limitations on third-home loans as the curbs reaped their intended effects on the real estate market, the Southern Metropolis Daily reported, citing Qin Hong, a researcher from the Ministry of Housing and Urban-Rural Development.
Property Prices, Loans
Real-estate prices in 70 cities fell 0.1 percent from the previous month, the statistics bureau said today, while a central bank report yesterday said new lending of 603 billion yuan ($89 billion) was the least in three months. Separately, a customs office report showed overseas sales gained 43.9 percent last month from a year ago, topping the median economist forecast of 38 percent in a Bloomberg News survey. The statistics bureau is due to announce second-quarter gross domestic product data this week.
China Life, the nation’s largest insurer, and China Pacific Insurance (Group) Co. both dropped 6.6 percent in Shanghai trading. The China Insurance Regulatory Commission said July 9 it plans to allow insurers to decide the preset interest rates, which insurers use to estimate future investment yields when pricing contracts, on “conventional” life insurance policies. The higher the interest rate is, the cheaper the insurance policies are for customers.
South Korea, India
Samsung Life Insurance Co. rose 1.9 percent, pacing gains in Seoul, after the Bank of Korea today raised its 2010 economic growth forecast to 5.9 percent, from an April projection of 5.2 percent.
The South Korean central bank, which last week lifted its benchmark interest rate by 25 basis points from a record-low 2 percent, also increased its estimate for growth in 2010 exports to 26.4 percent from 18.6 percent and doubled its prediction for this year’s current-account surplus to $21 billion.
In India, the benchmark Sensex index rose 0.6 percent, paring gains of as much as 1 percent. India’s factory output in May rose 11.5 percent from a year earlier, the Central Statistical Organisation said in New Delhi today, missing the 16.2 percent forecast.
Bharti Airtel Ltd., India’s largest wireless carrier, lost 1 percent.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
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