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Emerging Stocks End Three-Day Loss on China Bets as Zloty Rises

Emerging-market stocks rose for the first time in four days as a technology gauge climbed and on bets China is accelerating changes to state-owned enterprises.

Taiwan Semiconductor Manufacturing Co. (2330) surged 2.9 percent in Taipei. Dubai’s DFM General Index rallied 1.3 percent, while Russian equities gained 0.3 percent. Poland’s WIG30 index added 1 percent and the zloty rose the most among its European peers. China Everbright Ltd. (165) soared 15 percent after saying its corporate parent will become a joint-stock company in an ownership revamp. Brazil’s Ibovespa gained a second day as Brazilian consumer stocks rallied.

The MSCI Emerging Markets Index climbed 0.9 percent to 1,069.97. China is restructuring so-called SOEs after Communist Party leaders pledged to give markets a “decisive” role in the economy. U.S. jobs data that trailed estimates reduced speculation the Federal Reserve will bring forward an increase in interest rates.

“Several long-awaited catalysts may be finally happening in China,” Martial Godet, the head of emerging-market equity and derivatives strategy at BNP Paribas SA in Paris, said by e-mail. “We expect the Fed to be cautious to avoid an interest rate shock.”

The developing-nation gauge has gained 6.7 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 2.9 percent in the period and is valued at a multiple of 14.8.

Tech Rebound

All 10 industry groups in the emerging-markets measure advanced today, led by a 2.1 percent surge in technology shares. Taiwan Semiconductor rose for the first time in three days, while Hon Hai Precision Industry Co. increased 3.4 percent.

The DFM General Index (DFMGI) rallied to the highest since July 17, led by a 3.1 percent jump in Emaar Properties PJSC, developer of the world’s tallest skyscraper. Egypt’s EGX 30 Index rose 1.3 percent to the a six-year high.

Etisalat Misr, the Egyptian unit of Emirates Telecommunications Corp. of Abu Dhabi, is set to revive the nation’s initial public offerings with a planned $500 million sale. The company asked banks for proposals to manage an IPO that may be the largest on the Egyptian bourse in almost five years, according to three people familiar with the situation.

Ruble Drops

Russia’s Micex Index added 0.3 percent. The measure fell 1 percent last week as the U.S. and European Union announced expanded sanctions on Russia’s biggest lenders. The ruble depreciated 0.1 percent against the dollar today.

The Ibovespa advanced 1.3 percent. Retailer Cia. Hering led the advance, rallying 6 percent after a columnist for Veja magazine reported that rivals Lojas Renner SA and Marisa Lojas SA and discussing a merger. Renner denied the talks in a regulatory filing, while Marisa declined to comment when contacted by Bloomberg News.

Polish equities rose the most since July 11 while the zloty appreciated 0.2 percent versus the euro. Corporate demand for loans will maintain “strong growth” in the third quarter, especially for long-term credits to big companies, according to a survey of 26 commercial banks published today on the Polish central bank website.

The premium investors demand to own emerging-market debt over U.S. Treasuries rose one basis point to 281, JPMorgan Chase & Co. indexes show.

The Shanghai Composite Index (SHCOMP) jumped 1.7 percent to the highest since Dec. 10. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong added 1 percent.

China Everbright soared the most since October 2008, the biggest gain in the MSCI Emerging Markets Index, on its parent’s plans for an ownership revamp of a group with $420 billion of assets from banking and broking to tourism.

“Everbright is one good example of SOE reform taking place and any news about speeding up of these reforms will boost the market,” said Mao Sheng, an analyst for Huaxi Securities Co.

Citic Securities Co. and Haitong Securities Co. added more than 4 percent in Shanghai. The China Securities Regulatory Commission plans to lower some risk-management requirements on brokerages, the China Securities Journal reported.

To contact the reporters on this story: Priyanka Sharma in London at psharma142@bloomberg.net; Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editors responsible for this story: Daliah Merzaban at dmerzaban@bloomberg.net Zahra Hankir, Richard Richtmyer

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