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Emerging Stocks Rise on Economic Outlook, Heading for Third Weekly Advance

Emerging-market stocks rose, extending their third weekly gain, on optimism investors will boost purchases to tap economic growth in developing nations.

The MSCI Emerging Markets Index rose 0.8 percent to 1,038.81 as of 1:25 p.m. in Singapore. The gauge has gained 2.6 percent this week, set to cap its longest winning streak since the week ended Aug. 6. The Shanghai Composite Index climbed 0.2 percent and Indonesia’s Jakarta Composite Index added 1 percent, set for a record close.

The MSCI Emerging Markets Index has surged 21 percent from this year’s low on May 25, as concern eased that the global economic recovery will falter. Flows into emerging-market equity funds and high-yield bonds reached a six-week high in the week to Sept. 15 on optimism the global rally will be sustained, 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. “Going forward, I’m bullish that over a 12-month basis, emerging markets will definitely continue to outperform.”

Equity funds tracked worldwide took in a net $9.42 billion during the period, while bond funds attracted $4.21 billion, the fund tracker said in an e-mailed statement. Developing-nation equity funds received about $3.3 billion as Chinese industrial output gains bolstered sentiment, EPFR said. Global emerging markets equity funds absorbed the “lion’s share,” and flows into Asia ex-Japan equity funds hit a seven-week high.

‘Relatively Fast’ Growth

China’s economy will grow “relatively fast,” and remain stable, the central bank said in a report published on its website today.

Huaneng Power International Inc. climbed 5 percent after saying its parent will inject energy assets into the company and as BNP Paribas said China may raise on-grid power tariffs next month. Huadian Power International Corp., the listed unit of China’s fourth-largest power producer, added 3.4 percent. Guangdong Electric Power Development Co. rose 0.9 percent. LG Electronics Inc., the world’s third-largest mobile-phone maker, rose 5.2 percent in Seoul trading after naming LG International Corp. Vice Chairman Koo Bon Joon as its new chief executive officer.

PT Charoen Pokphand Indonesia shares gained to the highest level in at least 19 years in Jakarta trading after the nation’s biggest producer of chicken feed said it plans to buy back as much as 0.21 percent of its total shares outstanding.

Indonesia, Taiwan

The Jakarta Composite rose 1 percent, headed for a record close. Taiwan’s Taiex index added 0.7 percent while South Korea’s Kospi index gained 0.5 percent. Thailand’s SET Index slid 0.3 percent and Malaysia’s FTSE Bursa Malaysia KLCI Index gained 0.1 percent.

Thai mobile-phone companies slid after the Central Administrative Court issued an injunction to stop the bidding for licenses to provide high-speed mobile-phone services that was set to start Sept. 20.

Advanced Info Service Pcl, Thailand’s largest mobile-phone company, fell 8.4 percent. Total Access Communication Pcl, the second biggest, slumped 13 percent. True Corp. plunged 24 percent.

To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

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