Emerging-Market Stocks in Deepest Losing Streak of Year on Greek Debt Swap

Emerging-market stocks fell, completing the worst three-day slump since November, as concern Greece’s debt swap won’t get enough investor support and prospects Chinese exports are dropping damped appetite for riskier assets.

The MSCI Emerging Markets Index (MXEF) retreated for a third day, losing 0.3 percent at the close in New York to 1,037.71, the lowest since Feb. 1. The three-day loss is the steepest since Nov. 23.

Usinas Siderurgicas de Minas Gerais SA slid to the lowest this month as Brazil’s second-largest steelmaker said fourth- quarter profit tumbled 84 percent. China Life Insurance Co. (2628), the nation’s largest insurer, plunged the most in more than four months after reporting 2011 net income may drop by as much as 50 percent. Want Want China Holdings Ltd. (151) reached the highest-ever closing price after Citigroup Inc. raised its rating on China’s largest maker of rice cakes.

Greece is stepping up pressure on holders of its bonds to comply with a debt swap that runs through tomorrow and is viewed as necessary to avert a default. Investors with at least 58 percent of the eligible debt have agreed to the swap so far. China’s Commerce Minister Chen Deming said exports rose about 7 percent in the first two months of 2012, suggesting the reading for February will be below all forecasts of economists surveyed by Bloomberg.

There is “a bit of nervousness” in markets on Greece’s suggestion it will use collective action clauses, which trigger credit default swaps on the debt, to force bondholders to accept its debt restructuring, Benoit Anne, chief emerging-market strategist at Societe Generale SA, said by phone from London. “It’s a big test for the global markets, it’s a big event risk.”

Brazil’s Bovespa Index (IBOV) rebounded, gaining 1.4 percent from a three-week low, on speculation Brazilian policy makers will cut key borrowing costs at a policy meeting today. Marfrig Alimentos SA (MRFG3), Latin America’s second-largest beef producer, jumped 8.4 percent, the biggest gainer on the Bovespa.

Usinas Siderurgicas, known as Usiminas, slipped 2.2 percent after reporting that net income excluding minority interests fell 84 percent to 44.6 million reais ($25.4 million) in the fourth quarter.

The Hang Seng China Enterprises Index (HSCEI) of Chinese companies listed in Hong Kong slid 1.3 percent, taking its three-day decline to 6.5 percent.

China Life fell 6.1 percent in Hong Kong, the most since Oct. 20.

Shanghai-based Want Want China jumped 7 percent, the biggest advance since May 2010, after Citigroup raised its recommendation on the stock to “buy” from “neutral,” citing the potential for “good sales momentum” in the next few years.

The median forecast for Chinese export growth in February was for a 32 percent advance from a year earlier, according to a survey compiled by Bloomberg before Minister Chen spoke. The data is scheduled to be released on March 10.

Nomura Holdings Inc. said Chen’s comments indicated exports grew 18.7 percent last month, less than any estimate in the survey. Societe Generale revised its forecast to 18 percent.

The Kospi Index (KOSPI) slipped 0.9 percent in Seoul and the BSE India Sensitive Index, or Sensex (SENSEX), slid 0.2 percent in Mumbai.

The Micex Index (MICEX) gained 0.7 percent today in Moscow after sliding 3.9 percent yesterday. The ruble weakened 0.2 percent against the dollar, its seventh straight daily decline.

German factory orders fell 2.7 percent in January from December, when they gained 1.6 percent, the Economy Ministry in Berlin said today. U.S. companies added 216,000 workers last month versus a revised 173,000 the previous month, according to data based on payrolls from ADP Employer Services.

Brazil’s real weakened for a fourth day, falling 0.4 percent to 1.7661 per dollar. Economists expect Brazil’s central bank to cut the nation’s benchmark interest rate to 10 percent from 10.5 percent, according to the median of 62 estimates in a Bloomberg survey.

MTN Group Ltd. (MTN), Africa’s largest mobile-phone operator, jumped 3 percent in Johannesburg after saying adjusted earnings- per-share grew to 10.70 rand in 2011 from 7.47 rand a year earlier.

The iShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF that tracks developing-nation shares, rose 1.2 percent to $42.91.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell seven basis points, or 0.07 percentage point, to 350 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Jason Webb in London at jwebb25@bloomberg.net

To contact the editors responsible for this story: Gavin Serkin at gserkin@bloomberg.net; Emma O’Brien at eobrien6@bloomberg.net

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