Emerging-Market Stocks Head for Best Weekly Gain in Nine Months

Emerging-market stocks rose, with the benchmark gauge poised for the biggest weekly gain since June, as higher profits at Chinese automakers and banks eased concern earnings growth is slowing. Malaysia’s ringgit led developing-nation currencies higher.

Brilliance China Automotive Holdings Ltd. (1114) jumped the most since December 2011 in Hong Kong after reporting a 47 percent increase in full-year profit. Industrial & Commercial Bank of China Ltd. increased 2.6 percent after 2013 net income climbed 10 percent. Compal Electronics (2324) Inc. surged the most in more than two years in Taipei after earnings topped estimates. The ringgit and India’s rupee added at least 0.4 percent versus the dollar.

The MSCI Emerging Markets Index advanced 0.6 percent to 980.66 as of 1:21 p.m. in Hong Kong, poised for the highest close since Jan. 2. The gauge has risen 3.8 percent this week as weaker Chinese data spurred bets the government will take steps to bolster growth in the world’s second-biggest economy. Of the 212 companies in the developing nations gauge that reported annual earnings this month and for which Bloomberg had estimates, 48 percent beat estimates and 52 percent missed.

“The earnings coming out support investors to take a risk-on stance,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc., the largest Philippine bank, said in Manila.

The MSCI Emerging Markets Index has declined 2.2 percent this year, poised for the steepest quarterly loss since the quarter ended June. The gauge trades at 8.6 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index of developed nations has lost 0.4 percent in 2014, and is valued at 14.6 times.

Industry Groups

All 10 industry groups in the MSCI Emerging Markets Index advanced, led by financial and consumer-discretionary companies. Brilliance China jumped 8.1 percent, its third day of gains. The company said profit surged to 3.37 billion yuan ($542 million) from a year earlier.

Industrial & Commercial Bank of China, or ICBC, headed for the highest close since Feb. 19. The bank set aside lower provisions for bad debt than analysts estimated and more than doubled write-offs, allowing it to boost earnings.

The Hang Seng China Enterprises Index (HSCEI) of mainland companies in Hong Kong rose 1.8 percent. It has surged 6.6 percent this week, poised for the sharpest weekly increase since Nov. 22. The gauge rebounded 7.3 percent through yesterday since entering a bear market with a 20 percent loss from a December peak on March 20. The Shanghai Composite Index (SHCOMP) lost 0.4 percent today.

Asian Currencies

Asian currencies strengthened this week, with South Korea’s won and ringgit heading for their biggest advances in more than five months, as speculation mounted that China will act to stabilize growth. Premier Li Keqiang said the nation should “roll out effective policies in a targeted way” and cannot ignore the risks to growth, according to a statement on the government’s website.

India’s rupee climbed to the highest level since July 29. It is headed for its biggest quarterly advance since September 2012. The S&P BSE Sensex index added 0.1 percent, poised to close at a record as lenders rallied after the central bank extended the deadline for banks to meet global capital norms by a year to March 2019.

Compal Electronics rose 6.8 percent. The Taiwanese company reported profit of NT$2.47 billion ($81 million) in 2013, topping the NT$2.38 billion average of analysts estimates compiled by Bloomberg.

The Jakarta Composite Index climbed 0.8 percent. It has surged 11 percent this year, poised for its best quarter in a year. Vietnam’s equity gauge is heading for its biggest quarterly gain in a year with a 17 percent rally.

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Chan Tien Hin, Ravil Shirodkar

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.