Emerging-market technology stocks rose to the highest in 13 years on prospects Twitter Inc.’s initial public offering will boost developing-nation Internet stocks.
The MSCI Emerging Markets and Information Technology Index climbed 1.3 percent to 288.03 in New York, the highest level since April 2000. Samsung Electronics Co., the world’s biggest smartphone maker, climbed the most in a month. The MSCI Emerging Markets Index rose 0.2 percent to 997.85, as Brazil’s Oi SA surged. Russia’s Micex Index (INDEXCF) and Turkey’s Borsa Istanbul measure retreated.
The index of developing-nation technology stocks climbed on expectation Twitter, which said last month that it filed for an IPO, will publicly disclose its prospectus this week. The offering is expected to be the largest technology IPO since Facebook Inc. went public last year. The gains sent valuations on the MSCI EM technology index to 11.3 times estimated earnings, still a 20 percent discount to its developed market counterpart, according to data compiled by Bloomberg.
“Talk of a high valuation for Twitter is likely boosting prices of tech companies in emerging markets,” David Riedel, the president of New York-based Riedel Research Group Inc., wrote by e-mail today. “Any news flow that reminds investors of the strength and attractiveness of tech investing makes investors look around the world for similar investment ideas and raises the valuations on the whole group.”
Taipei-based Compal Electronics Inc. (2324), the world’s second-biggest contract maker of notebook computers, headed for a one-year high with trading volume three times the daily three-month average, data compiled by Bloomberg show. The stock is the biggest gainer on the MSCI EM technology gauge. GCL-Poly Energy Holdings, the world’s biggest maker of polysilicon, rose to the highest in 18 months in Hong Kong.
Samsung rose 2.6 percent after the Korea Economic Daily reported the company’s handset earnings will be better in the third quarter compared with the previous three months, citing JK Shin, head of mobile business. Samsung spokeswoman Chenny Kim confirmed Shin’s comments.
Seven out of 10 industry groups in the emerging-markets measure gained, while energy and consumer discretionary companies led today’s declines. The Information Technology Index was the top performer among 10 industry groups today.
The iShares MSCI Emerging Markets Index exchange-traded fund added 0.4 percent to $41.73. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 1.1 percent to 24.71.
OAO Gazprom, the supplier of a quarter of Europe’s natural gas, slumped 1.6 percent. Dividend payments from Russian state-owned companies are projected to rise sharply only in 2016, according to a Finance Ministry draft budget. Russia’s benchmark Micex Index declined 1.2 percent.
Oi SA rallied 5.2 percent after Brazil’s biggest phone company agreed to merge with Portugal Telecom SGPS SA to create a trans-Atlantic carrier whose 100 million customers make it more competitive against Telefonica SA and America Movil SAB.
The Borsa Istanbul 100 Index (XU100) tumbled 1.7 percent in Istanbul on investor concern over the lira’s weakness, Figen Ozavci, deputy CEO at Meksa Yatirim said in a phone interview. The currency depreciated 4.7 percent against the dollar in the three months through Sept. 30, extending two quarterly declines. The lira rose 0.8 percent versus the dollar.
Hungary’s BUX Index (BUX) lost 0.9 percent as Mol Nyrt. closed at the lowest since June 2012. Croatian police issued an arrest warrant against CEO and chairman Zsolt Hernadi this week in connection with a corruption investigation relating to Mol’s 2009 acquisition of INA Industrija Nafte d.d. Mol has denied any wrongdoing and says that Hernadi can continue to lead the company even as the warrant may keep him from traveling abroad.
Markets in India and China were shut for holidays today.
The MSCI Emerging Markets Index has lost 5.4 percent this year, compared with a 16 percent advance in the MSCI World Index of developed-nation shares. The emerging-country index trades at 10.5 times projected 12-month earnings, lower than the MSCI World’s 13.9 times, data compiled by Bloomberg show.