Most Emerging Stocks Decline as Indonesia, Thai Shares Slump

Most emerging-market stocks fell, led by Indonesian and Thai companies as global investors extended sales of the nations’ equities. The rupiah and baht weakened against the dollar.

PT Bumi Resources (BUMI) tumbled 5.5 percent, dragging the Jakarta Composite Index to a four-month low. Advanced Info Service Plc sank to a two-month low as Thailand’s benchmark gauge slid to the lowest level in 20 weeks. Hyundai Merchant Marine Co., which does business in North Korea, plunged 15 percent in Seoul after the communist regime called off high-level talks with South Korea. The rupiah and baht fell at least 0.3 percent.

About 184 stocks dropped and 64 rose in the MSCI Emerging Markets Index, which was little changed at 954.28 as of 2:42 p.m. in Hong Kong. Global funds reduced holdings of local equities in South Korea, Indonesia, Thailand and Taiwan by a combined $1.22 billion yesterday, based on exchange data compiled by Bloomberg. Stocks have slumped since Federal Reserve Chairman Ben S. Bernanke said on May 22 the central bank could consider paring stimulus if the U.S. labor market improves.

“There’s no place to hide,” Fadlul Imansyah, a fund manager at PT CIMB-Principal Asset Management, said by phone in Jakarta. “The increasing concerns over the possibility of the Fed scaling back have prompted foreign investors to leave emerging markets.”

The Jakarta Composite fell 1.3 percent, the biggest decline in Asia. The gauge is headed for the longest losing streak since May 2012. Bumi Resources, Indonesia’s biggest coal producer, sank to the lowest level since February 2009. Thailand’s SET Index lost 1.2 percent as Advanced Info sank 3.2 percent. Markets in China, Hong Kong, Taiwan and the Philippines are closed for holidays.

Biggest Declines

Gauges of consumer-discretionary companies and health-care stocks in MSCI’s developing-nation index slid at least 0.3 percent, the most among 10 industry groups.

The emerging-markets measure has dropped 9.6 percent this year, compared with a 9.4 percent gain in the MSCI World Index. The developing-nation gauge trades at 9.8 times projected 12-month earnings, compared with the MSCI World’s 13.5 times, data compiled by Bloomberg show.

Greece became the first developed nation to be cut to emerging-market status by MSCI Inc. after the local stock index plunged 83 percent since 2007. Qatar and the United Arab Emirates were raised to emerging markets, while Morocco was cut to a frontier market, MSCI said yesterday.

Benchmark gauges in South Korea, Malaysia slid at least 0.6 percent. India’s S&P BSE Sensex fell 0.7 percent after the nation’s factory production lagged estimates and retail inflation accelerated.

Rupiah Forwards

Indonesia’s rupiah forwards strengthened after the central bank raised the rate it pays lenders on overnight deposits in a preemptive step to maintain monetary stability. The rupiah weakened for a fourth day. The baht fell beyond 31 per dollar for the first time since September.

Hyundai Merchant, the biggest shareholder of Hyundai Asan Corp., which manages a resort in Mount Geumgang in North Korea, fell the most since November 2010.

North Korea unilaterally called off the highest-level talks since Kim Jong Un took power in protest over the rank of South Korea’s proposed delegate, the South’s Unification Ministry said. Delegations from both sides were to meet to discuss reopening the jointly-run Gaeseong industrial zone and a luxury resort.

To contact the reporter on this story: Harry Suhartono in Jakarta at hsuhartono@bloomberg.net

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

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