Emerging Stocks Rise Most in Two Weeks as U.S. Growth Beats View

Emerging-market stocks rose the most in two weeks, led by technology companies and China Mobile Ltd. (941), after the U.S. economy expanded faster than expected and the International Monetary Fund said it’s raising the country’s outlook. The baht weakened.

Hyundai Merchant Marine Co. (011200), South Korea’s second-largest shipping company, surged after the Hyundai Group said it plans to sell assets. The Shanghai Composite rebounded, ending a nine-day losing streak. China Mobile added 1.2 percent in Hong Kong after striking a deal with Apple Inc. (AAPL) to sell the iPhone in the world’s largest wireless market. Thailand’s stocks fell and the currency slid to its weakest level in more than three years.

The MSCI Emerging Markets Index rose 0.2 percent to 990.08 as of 2:04 p.m. in Hong Kong, after rising the most since Dec. 9. The measure lost 0.2 percent last week, its third straight weekly slide. U.S. economic growth in the third quarter increased faster than previously estimated as consumers boosted spending on services such as health care and companies invested more in software. IMF Managing Director Christine Lagarde said a budget deal in Washington and the Federal Reserve’s plan to taper its bond buying ease doubts about the future.

“Emerging market technology stocks are rising amid hopes the U.S. economic recovery may help revive export demand,” said Paras Bothra, vice president for equity research at Ashika Stock Broking Ltd. in Mumbai.

Stock Valuations

All 10 industry groups in the MSCI Emerging Markets Index advanced, led by technology and utility companies. The developing-nation gauge has lost 6.2 percent this year and trades at 10.4 times projected 12-month earnings. The MSCI World Index of developed countries has surged 22 percent in 2013 and is valued at a multiple of 14.6.

Hyundai Merchant shares rose by the daily limit of 15 percent in Seoul after the Hyundai Group said yesterday it plans to raise at least 3.3 trillion won ($3.1 billion) from the sale of financial units and its hotel business. The benchmark Kospi Index (KOSPI) climbed 0.7 percent to 1,996.89.

The Shanghai Composite Index added 0.2 percent after valuations fell to a four-month low and technical indicators signaled a rebound. The gauge trades at 8.1 times projected profit for the next 12 months, the lowest level since July 31. The 14-day relative strength measure, measuring how rapidly prices have advanced or dropped during a specified time period, was at 27.4 on Dec. 20. Readings below 30 indicate it may be poised to rise.

Repo Rate

The seven-day repurchase rate, a gauge of funding availability in the banking system, jumped 124 basis points in Shanghai to 8.84 percent, the highest level since June 20, according to a daily fixing from the National Interbank Funding Center. The rate, which has more than doubled from 4.37 percent in the past week, touched a record 10.77 percent in June.

China Mobile gained the most in five weeks after the agreement with Apple, giving both companies a means to fight declining share in the market of 1.2 billion wireless subscribers. The Hang Seng China Enterprises Index of mainland companies in Hong Kong was little changed at 10,626.23.

Thailand’s SET Index slid 1.2 percent, the largest decline among Asian stock benchmarks, while the baht fell to a low of 32.773 against the dollar. Anti-government protesters plan to disrupt the registration of candidates for the Feb. 2 election, which starts today, after holding mass rallies in Bangkok yesterday. Bank of Ayudhya Pcl slumped 9.7 percent, the steepest loss in five years, after KGI Securities downgraded the stock to underperform from neutral.

The Jakarta Composite Index retreated 0.9 percent, as the rupiah weakened to a five-year low, with banks sliding as the rupiah’s fall for a fifth day added to concern over inflation pressure.

Benchmark gauges in India and Taiwan advanced at least 0.4 percent. TPK Holding Co. (3673) slumped 6.7 percent in Taipei, retreating for a third day. The company may post a net loss of NT$600 million ($20 million) in the fourth quarter compared to a net income of NT$1.01 billion in the previous three months, according to a Bloomberg News survey.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Allen Wan at awan3@bloomberg.net

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