Emerging Stocks Rise Most in Two Months on Global Outlook

Emerging-market stocks rose to cap biggest weekly jump in more than two months, as data from China to Japan and the U.S. bolstered the global economic outlook. Mexican peso bonds climbed after an unexpected rate cut.

Aspen Pharmacare Holdings Ltd. (APN) jumped to a record in Johannesburg after first-half earnings rose 13 percent, while Dogus Otomotiv Servis ve Ticaret AS reached an all-time high in Istanbul after profit exceeded analyst estimates. South Korean bonds and the won fell as North Korea threatened a preemptive nuclear strike against the U.S. and other “aggressors.” Retailer B2W Companhia Global do Varejo jumped in Sao Paulo after it reported better-than-projected fourth-quarter sales.

The MSCI Emerging Markets Index climbed 0.8 percent to 1,065.94 in New York, the highest close since Feb. 20. The gauge rose 1.2 percent this week, the steepest weekly gain since January. China’s exports grew more than forecast in February, data showed, while Japan’s economy exited a recession and the U.S. jobless rate fell to a four-year low.

“The Chinese and U.S. figures are positive for global economic growth,” Peter Jankovskis, the chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC, said in by phone. His firm oversees $3.3 billion. “That certainly should be helpful for emerging markets as they are largely exporters and would benefit from that.”

Emerging stocks joined a global rally as data showed employment in the U.S. rose 236,000 last month, above the median economist forecast. The jobless rate dropped to 7.7 percent. Chinese exports rose 21.8 percent in February from a year earlier. The 21 countries in the developing-nations gauge send about 17 percent of their exports to the U.S., data compiled by the World Trade Organization show.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund gained 0.9 percent to $44.13, extending its jump in the week to 1.9 percent, also the most since the start of January. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, fell 7.6 percent to 15.26, the biggest drop in a month.

Of the 10 groups in the emerging markets measure, nine rose, with healthcare and financial companies posting the biggest gains. The broader gauge has added 1 percent this year, trailing a 6.7 percent gain in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.9 times 12-month projected profit, compared with the MSCI World’s 14.1 times, according to data compiled by Bloomberg.

Mexico’s IPC Index rose 0.8 percent as the central bank cut key rates to a record-low 4 percent. The peso strengthened 1 percent versus the dollar, the steepest gain among 25 emerging markets currencies tracked by Bloomberg. Yields on peso-denominated debt due in 2013 fell six basis points, or 0.06 percentage point, to 4.1 percent.

Real Rally

Brazil’s Bovespa index fell 0.7 percent, as Multiplus SA, the frequent-flier unit of Latam Airlines Group SA’s Brazil subsidiary, slumped 7.8 percent after filing to sell new shares. B2W rose 5.1 percent, the most since Jan. 17.

The real strengthened 1.8 percent versus the dollar this week, the best performer among emerging-market currencies. Annual inflation accelerated in February more than economists forecast, fueling speculation policy makers will raise key interest rates this year.

Petrominerales Ltd. (PMGC), an oil and gas producer, dropped 5.7 percent in Bogota, adding to a 25 percent decline this week, the most on record. Five of 11 analysts who had buy ratings on the stock changed their recommendations after the company’s production plunged.

Dollar Debt

JPMorgan Chase & Co. cut emerging-market government dollar-denominated bonds to neutral from overweight, citing concerns about market liquidity, according to an e-mailed report. The bank sees no impact of the so-called currency war on emerging currencies, according to the report, and recommended investors retain bets on gains in emerging-market local-currency debt.

The extra yield investors demand to hold emerging debt over U.S. Treasuries slipped four basis points to 278 basis points, according to JPMorgan’s EMBI Global Index.

South Africa’s rand strengthened 0.6 percent against the dollar after central bank Governor Gill Marcus said in a Bloomberg Television interview that the currency’s recent declines were “overdone.”

Aspen Pharmacare, a Gallo Manor-based pharmaceutical supplier, rose 3.5 percent to the highest level since Bloomberg began compiling data on the stock in December 1990. Net income advanced to 1.7 billion rand ($184 million) in the six months through December, compared with 1.5 billion rand a year earlier, the Durban, South Africa-based company said in a statement yesterday.

Sensex Jumps

Poland’s WIG 20 Index and the Czech Republic’s PX Index both added at least 0.7 percent. Russian markets were closed for a holiday.

X5 Retail Group NV (FIVE), a Russian retailer, rose 2.6 percent in London. The company reported 2012 sales of $15.8 billion and a full-year loss of $126.5 million, according to a statement yesterday.

Turkey’s benchmark stock index climbed 2.1 percent. Dogus, a Turkish importer and distributor for Volkswagen AG, rose 4.9 percent, climbing for a ninth day. The Istanbul-based company reported net income of 255.9 million liras ($142 million) for 2012, up 81 percent from the previous year.

India’s S&P BSE Sensex (SENSEX) index rallied 1.4 percent. Jindal Steel & Power Ltd. (JSP), an Indian steelmaker, jumped 5.7 percent in Mumbai, the biggest one-day advance since Nov. 30. The stock slumped 17 percent last month.

The Hang Seng China Enterprises Index in Hong Kong surged 1.5 percent. The Philippine Stock Exchange Index (PCOMP) rallied 1.6 percent.

South Korea’s Kospi index added 0.1 percent. The won weakened 0.5 percent against the dollar. The UN Security Council voted unanimously to impose tougher sanctions on North Korea over a forbidden nuclear test, hours after the totalitarian state warned yesterday it would act to defend its “supreme interests.”

To contact the reporters on this story: Maria Levitov in London at mlevitov@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

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

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