Emerging Stocks Halt Four-Day Drop on China While Baht Falls

Emerging-market stocks rose for the first time in five days, led by Chinese equities, after the nation’s money-market rates extended declines. Thai shares and the baht sank as the government declared a state of emergency.

The Shanghai Composite (SHCOMP) Index jumped 1.8 percent, the most in two months. Anhui Yingliu Electromechanical Co. soared 40 percent in its Shanghai debut. Thai Airways (THAI) International Pcl tumbled the most in two weeks in Bangkok, leading losses in the nation’s tourism stocks. The baht, South Korea’s won and Indonesia’s rupiah lost at least 0.2 percent versus the dollar.

The MSCI Emerging Markets Index gained 0.2 percent to 972.28 as of 1:27 p.m. in Hong Kong, the most in a week. China’s money-market rates fell for a second day as fund injections by the central bank eased a cash squeeze in the run-up to the week-long Lunar New Year holidays. Thai Prime Minister Yingluck Shinawatra declared a state of emergency in Bangkok yesterday as violence threatened to derail elections set for Feb. 2.

“On the positive side, the market has been supported by the falling money-market rate in China,” Akbar Syarief, fund manager at PT MNC Asset Management, said by phone from Jakarta. “The political uncertainties have been negatively affecting Thai stocks and some international investors might be shifting their portfolio into other countries like Indonesia.”

The MSCI emerging-markets gauge has lost 3.1 percent this year and trades at 9.2 times 12-month projected earnings. The MSCI World Index has slid less than 0.1 percent in 2014 and is valued at a multiple of 14.8, data compiled by Bloomberg show.

Industry Groups

Eight out of 10 industry groups in the developing-nation gauge rose, led by health-care companies and industrial stocks.

The Shanghai Composite gained for a second day, poised for the steepest increase since Nov. 18. The seven-day repurchase rate, a gauge of interbank funding availability, dropped 19 basis points to 5.25 percent in Shanghai, according to a daily fixing compiled by the National Interbank Funding Center.

Anhui Yingliu surged after seven of eight companies that listed yesterday in China posted gains of at least 45 percent.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong advanced 0.9 percent, the highest level since Jan. 8.

The Philippine Stock Exchange Index rallied 1.7 percent, its sixth day of gains. Bloomberry Resorts Corp. jumped 18 percent in Manila, the largest increase in the benchmark gauge.

The International Monetary Fund raised its forecast for global growth this year to 3.7 percent compared with an October estimate of 3.6 percent, as expansions in the U.S. and U.K. accelerate. Growth projection for China has been revised to 7.5 percent from previous estimates of 7.3 percent.

Emergency Decree

Thai Airways fell 3.5 percent while Airports of Thailand Pcl (AOT) retreated 1.8 percent. The SET Index lost 0.5 percent, headed for a one-week low. The emergency decree bans gatherings of more than five people, allows detention without charge and gives soldiers immunity from prosecution.

Bombings and shootings in the Thai capital have killed one person and injured 70 over the past five days, prompting Army Chief Prayuth Chan-Ocha to call for restraint from protesters and security officials.

The baht weakened 0.2 percent. The Bank of Thailand will reduce its policy rate to 2 percent from 2.25 percent today, according to 14 of 21 economists surveyed by Bloomberg. Seven forecast no change. The central bank delivered a surprise 25-basis-point cut on Nov. 27. The decision is due 2:30 p.m. in Bangkok.

Vietnam’s VN Index lost 0.2 percent, snapping a 13-day gain. Benchmark equity measures in Malaysia and Indonesia dropped at least 0.1 percent.

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

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

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