Emerging Stocks Set for Weekly Loss as Thailand’s SET Leads Drop

Most emerging-market stocks declined, with the benchmark index heading for the first weekly slide in a month, as Thai shares retreated amid political protests and investors weighed the outlook for U.S. stimulus. The baht fell.

Airports of Thailand Pcl retreated to the lowest level since Sept. 24 and the baht weakened 0.2 percent to an almost three-month low after the government said a large number of protesters are expected to demonstrate in Bangkok today. China Shenhua Energy Co. paced losses among the nation’s coal companies, while LG Display Co. (034220) rose the most since February in Seoul after Hyundai Securities Co. said it’s a top pick.

The MSCI Emerging Markets Index fell 0.1 percent to 997.43 as of 2:14 p.m. in Hong Kong, bringing its weekly loss to 2.1 percent. Demonstrators seeking to oust Thai Prime Minister Yingluck Shinawatra are expected to resume protests after a holiday yesterday. The U.S. will report monthly payrolls data after better-than-estimated jobless claims and economic growth figures yesterday spurred concern the Federal Reserve may bring forward stimulus cuts.

“With improving payroll and GDP data in the U.S., tapering seems to be getting closer and closer,” said Attila Vajda, an analyst at ACB Securities Co. in Ho Chi Minh City. “We can see some profit taking from time to time in markets that are more vulnerable to tapering.”

Thai Retreat

The MSCI emerging markets index has climbed 13 percent from this year’s low in June and is valued at 10.5 times estimated earnings for the next 12 months, according to data compiled by Bloomberg. That compares with 14 times for the MSCI World Index.

Thailand’s SET Index (SET) dropped 1 percent, the most among Asian equity gauges, to the lowest level since Nov. 28.

The protests began more than a month ago against an amnesty for most political offenses stretching back to the 2006 coup that ousted Thaksin Shinawatra, Yingluck’s brother. They have escalated into a wider push to replace what protest leader Suthep Thaugsuban calls the “Thaksin system” with an appointed “parliament of the people.”

The unrest has affected consumption, investment and tourism, and has a direct impact on sentiment, Bank of Thailand Governor Prasarn Trairatvorakul said on Nov. 30.

The Jakarta Composite Index fell 0.8 percent to the lowest level in three months. The Shanghai Composite Index (SHCOMP) declined 0.6 percent.

To contact Bloomberg News staff for this story: Nguyen Kieu Giang in Hanoi at giang1@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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