Emerging Equities, High-Yield Bonds Lure Cash on Risk Appetite, EPFR Says
Emerging-market stocks rose, capping a third weekly gain, and currencies strengthened as technology shares climbed after Research In Motion Ltd. and Oracle Corp. beat analysts’ estimates and commodities advanced.
The MSCI Emerging Markets Index added 0.5 percent to 1,035.94 as of 5 p.m. in New York. The gauge has gained 2.3 percent this week. The measure pared some of its gains after U.S. consumer confidence unexpectedly fell, casting doubt on the strength of the economic recovery. South Korea’s Kospi Index, in which electric and electronics stocks account for 19 percent of the weighting, increased 0.9 percent. Indonesian equities rose 1.3 percent to a record.
Results from Oracle and BlackBerry-maker Research in Motion signaled a rise in technology spending, boosting the industry’s stocks worldwide. Commodities shares climbed as metals rose. Flows into emerging-market equity funds and high-yield bonds reached a six-week high in the week to Sept. 15 as investors bet the global rally will be sustained and developing nations will grow the fastest, EPFR Global said.
“Emerging markets have done really well with higher risk appetite,” said Jason Chong, who helps manage the equivalent of $900 million of assets as chief investment officer at Manulife Asset Management (Malaysia) Sdn. in Kuala Lumpur. “I’m bullish that over a 12-month basis, emerging markets will definitely continue to outperform.”
Samsung Electronics Co., the world’s largest maker of televisions, rose 2.1 percent in Seoul. South Korea’s LG Electronics Inc., the world’s third-largest mobile-phone maker, rallied 4.7 percent after naming LG International Corp. Vice Chairman Koo Bon Joon as its new chief executive officer.
First-quarter profit at Oracle, the world’s second-largest software maker, and second-quarter results from Research In Motion Ltd. both exceeded analysts’ estimates, fueling optimism demand for electronics will grow.
Gold’s climb to a record and advances in platinum, copper and other metal prices supported South Africa’s rand, which appreciated 0.2 percent against the dollar. Gold and platinum are South Africa’s biggest export earners, together accounting for about a fifth of the country’s foreign revenue.
Copper for three-month delivery gained 0.6 percent in New York, the highest price in almost five months.
Asian currencies strengthened as investors sought to buy into some of the world’s fastest-growing economies.
The Indian rupee appreciated 0.7 percent against the dollar to 45.8400, the biggest one-day advance since July 27. It gained 1.4 percent during the week. India’s central bank this week increased interest rates for the fifth time in 2010.
Turkiye Garanti Bankasi AS, a bank which has the second highest market capitalization on the Turkish market index, gained 3 percent. General Electric Co.’s talks on the sale of its 21 percent stake in Garanti continue and may result in a “surprising” deal, Istanbul-based Milliyet newspaper said, citing unidentified sources at GE.
Brazil’s Bovespa stock index dropped, paring its third straight weekly gain, led by Cyrela Brazil Realty SA Empreendimentos e Participacoes, the country’s biggest homebuilder by revenue.
The Shanghai Composite Index slipped 0.2 percent.
The difference between the return investors require from emerging-market sovereign bonds and U.S. Treasuries widened by two basis points to 2.75 percent, according to the JPMorgan Chase & Co. EMBI+ index.