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Emerging ETF Climbs on Europe Outlook as Russia Rebounds

The iShares MSCI Emerging Markets Index exchange-traded fund climbed for the first time in three days as a rally in Russian equities overshadowed declines in Chinese and Brazilian stocks.

Genomma Lab Internacional SAB, a Mexican developer of acne treatments, rose to a two-year high, leading the IPC Index higher. Russia’s Micex Index added 0.8 percent, rising for a second day. Dubai’s benchmark index jumped to a three-year high as Emirates Integrated Telecommunications Co., a phone company known as Du, surged after proposing higher dividends. The Shanghai Composite Index fell the most since Jan. 11.

The ETF tracking developing-nation shares rose 0.2 percent to $44.08 in New York, while the MSCI Emerging Markets Index was little changed at 1,063.99. Data showing German investor confidence rose more than economists predicted in February bolstered the outlook for the debt-plagued region, trumping concern that China may introduce more curbs to quell growth in the property market.

The release of German confidence data “did help sentiment,” Nick Chamie, global head of emerging-markets and currency strategy at Royal Bank of Canada, said in a phone interview from Toronto. “We had a relatively strong start to the U.S. session, that’s helping to lift other markets.”

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 48.2 from 31.5 in January, the highest level since April 2010. Economists forecast a gain to 35, according to the median of 38 estimates in a Bloomberg News survey.

The Standard & Poor’s 500 Index climbed 0.7 percent after being closed yesterday for a holiday.

Mexico Gains

The MSCI emerging-market stock gauge’s 100-day historical volatility slumped to 8.48, the lowest level since August 1997. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the iShares ETF and expectations of price swings, fell 2.2 percent to 15.

The IPC index advanced 1.1 percent in Mexico City. Genomma Lab rose 7.7 percent after saying yesterday that Wal-Mart Stores Inc. will distribute its products in the U.S.

Brazil’s Bovespa index dropped 0.5 percent on its fifth day of declines, the longest streak of losses since October. Braskem SA, Latin America’s largest petrochemicals producer, advanced 7.1 percent after Credit Suisse Group AG upgraded the stock to the equivalent of buy.

Gazprom Advances

OAO Gazprom, the world’s biggest natural gas producer, and OAO Norilsk Nickel, Russia’s largest mining company, led gains in the benchmark Micex gauge. Gazprom added 1.3 percent, while Norilsk climbed 2.6 percent, rising for he first time in four days.

The Dubai Financial Market General Index jumped 1.7 percent to its highest level since November 2009. Du rallied 12 percent after fourth-quarter profit more than doubled.

“Today’s more positive indicator from Germany is balancing out earlier concerns about China growth and is helping markets recover,” Chris Weafer, the chief strategist at Sberbank Investment Research, a unit of Russia’s biggest lender, said by e-mail today from Moscow.

The Shanghai Stock Exchange Property Index lost 4.6 percent, the measure’s biggest one-day drop since Aug. 2, while the Shanghai Composite measure of domestic Chinese shares slipped 1.6 percent to the lowest this month.

China may introduce more policies aimed at stifling growth in housing prices before or after the National People’s Congress’ annual meeting next month, China Business News reported today, citing Xie Yifeng, head of the Asia-Pacific City Development Research Center’s real estate institute.

Shimao Property Holdings Ltd., the Chinese developer controlled by billionaire Hui Wingmau, dropped 3.3 percent in its second day of declines. China Vanke Co.’s Hong Kong dollar- denominated B-shares slipped 1.3 percent.

‘Normalize’ Markets

China’s “government is trying to normalize the market,” Gopal Agrawal, the chief investment officer at Mirae Asset Global Investments (India) Pvt., said by phone from Mumbai. “In January, lending was heavy and that leads to very strong property, automotive sales numbers and the government is seeking to cool this overheating.”

Anhui Conch Cement Co., the biggest Chinese cement maker, sank 7.6 percent, the most since November 2011, as the government forecast that growth in cement output will slow this year.

In India, the S&P Dow Jones Sensex Index rose 0.7 percent, while Turkey’s ISE National 100 Index added 0.5 percent. Poland’s WIG20 Index was little changed.

The Jakarta Composite Index declined 0.2 percent, falling for the first time in seven days. Trading volume was almost triple the gauge’s average over 30 days. The Philippine Stock Exchange Index increased 0.9 percent to a record.

Financials Drop

The Turkish lira led declines among emerging-markets currencies tracked by Bloomberg, down 0.5 percent to 1.7768 per dollar. The Brazilian real appreciated 0.4 percent to 1.9557 per dollar.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage point, to 272, according to JPMorgan Chase & Co.’s EMBI Global Index.

A gauge of financial stocks in the MSCI Emerging Markets Index fell 0.5 percent, the most among 10 industry groups. The broader index has gained 0.8 percent this year, trailing the MSCI World Index’s 6.1 percent advance. The developing nations’ measure is valued at 10.4 times estimated profit. The MSCI World, which tracks developed markets, trades at 13.9 times, according to data compiled by Bloomberg.

E Ink Jumps

Au Optronics, a Taiwanese manufacturer of thin film transistor-liquid crystal displays, surged 6.6 percent, bringing gain to 14 percent in the first two trading days since an investor conference on Feb. 6. The company had then said prices for larger panels will increase in the first quarter from the previous three months. Trading resumed yesterday after the Lunar New Year break.

E Ink Holdings Inc., a Taiwanese maker of liquid crystal displays, jumped 6.9 percent, its second day of gains, after the company’s revenue in January jumped 82 percent.

ZTE Corp., which manufactures mobile communication systems, slid 5.4 percent in Hong Kong after Morgan Stanley said Apple Inc. may introduce a $330 iPhone Mini for the Chinese market.

PT Bumi Resources, Indonesia’s largest thermal coal producer, jumped 7.5 percent after regulators said a change in ownership control would require a tender offer for the whole company.

To contact the reporters on this story: Lyubov Pronina in London at lpronina@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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