Emerging Stocks Advance for Fourth Day; Yuan, Real Strengthen

Emerging-market stocks rose for a fourth day and currencies strengthened after a bigger-than-estimated increase in private U.S. payrolls eased concern that global economic growth will slow.

The MSCI Emerging Markets Index climbed 0.8 percent to 1,011.73 at 4:30 p.m. New York time, the highest level in four weeks. Indonesia’s Jakarta Composite Index rose to a record while benchmark equity indexes in China, India, Dubai and Hungary increased more than 1 percent. Malaysia’s ringgit advanced to the strongest level in 13 years and the Brazilian real strengthened for the fourth day out of five.

Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. led gains in technology exporters after a U.S. report showed private payrolls that exclude government agencies increased 67,000, beating the 40,000 median forecast in a Bloomberg News survey of economists. John Lipsky, the second-ranking official at the International Monetary Fund, said yesterday that Group of 20 nations’ deputies showed confidence in the global economic recovery.

The rally in stocks “will have more legs,” Michael Preiss, chief equities strategist at Standard Chartered Bank, said in an interview with Bloomberg Television from Singapore. “We expect more growth and potential for further re-rating in emerging markets.”

The MSCI emerging index extended a 3.5 percent rally last week that lifted its price to 14.1 times reported profits, according to data compiled by Bloomberg. That’s near the highest level in two years relative to the MSCI World Index of advanced-nation shares, which trades for 15.3 times earnings.

Global Confidence

“They’re mainly confident that there’s a moderate recovery underway globally,” Lipsky said yesterday after a G-20 deputies’ meeting in the South Korean city of Gwangju. There are “obviously risks and challenges but things seem to be moving more or less in the line with our forecasts,” he said.

South Korea’s Kospi index rallied 0.7 percent and the won strengthened 0.4 percent against the dollar. Samsung, which gets about 20 percent of its sales in America, jumped 2.5 percent. Asia’s biggest maker of chips, flat screens and mobile phones said it may invest 30 trillion won ($26 billion) next year.

The Shanghai Composite advanced to the highest level since May. China’s stocks may be poised for a “significant” rally when the government relaxes its policy tightening measures, Mark Konyn, who helps manage more than $12 billion as chief executive officer of RCM Asia Pacific, said in an interview on Bloomberg Television.

Summers in China

The yuan climbed as Larry Summers, head of President Barack Obama’s National Economic Council, started a meeting in Beijing today with the head of the Communist Party’s organization department, boosting optimism China’s central bank will allow more gains. The currency rose 0.24 percent to 6.7874 per dollar, the biggest increase since Aug. 17, according to the China Foreign Exchange Trade System. It touched 6.7855 today.

The Taiex Index of shares climbed 0.8 percent as Taiwan Semiconductor, the world’s largest custom manufacturer of chips, increased 1.2 percent.

The Philippine Stock Exchange Index rose 0.3 percent to 3,744.01, the highest closing level since December 2007. The gauge will advance to a record 3,900 in the “near term” and may extend its rally to 4,500 next year, Alex Pomento, a strategist at Macquarie Group Ltd. in Manila, said in an interview.

The ringgit strengthened for a fourth day, gaining 0.1 percent to 3.1173 per dollar. Malaysia’s trade ministry reported a 13.5 percent gain in July exports last week, the eighth straight advance.

The Brazilian real strengthened 0.4 percent to 1.7267 per dollar. Investors are snapping up the real on expectations share sales by Brazilian companies, including an offer by state-run Petroleo Brasileiro SA that may be the world’s biggest on record, will attract foreign capital.

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