Emerging Stocks Gain for Fifth Day as Taiwan Shares Rally
Emerging-market stocks rose for a fifth day, its longest stretch of gains in two months, as Taiwan’s shares rallied and data showed improvement in Germany’s business climate. South Africa’s benchmark stock index climbed to a record.
The MSCI Emerging Markets Index (MXEF) gained 1 percent to 995.94 in New York, the highest since Sept. 14. The gauge increased 2.7 percent since on the week, the first advance since the five days ended Nov. 2. The FTSE/JSE Africa All Share Index (JALSH) rose to the highest level on record for a second day. Voting shares of Centrais Eletricas Brasileiras SA (ELET6) jumped in Sao Paulo, rebounding from a 17-year low.
Taiwan’s Taiex Index (TWSE) surged 3.1 percent, the most this year, after the Cabinet said it’s studying measures to bolster the stock market. The Ifo institute said the index for business climate in Germany, Europe’s biggest economy, rose to 101.4 this month, beating the 99.5 median estimate of 48 economists surveyed by Bloomberg. The 21 countries with companies in the MSCI emerging stocks index send 30 percent of their exports on average to the European Union, data from the World Trade Organization show.
“Overall market sentiment has been improving, with more indicators showing some recovery in the world’s main economies,” Monthol Junchaya, chief investment officer at Bangkok-based One Asset Management Ltd., which manages about $2.3 billion of assets, said by phone today.
The FTSE/JSE Africa gauge closed 0.1 percent to an all-time high, as SABMiller Plc (SAB), the world’s second-largest brewer, gained 1.5 percent for a weekly increase of 8.8 percent. Russia’s Micex Index (INDEXCF) climbed 0.7 percent, extending the week’s gains to 2.1 percent, the first such advance in three, as utilities rallied. Equity indexes in the Czech Republic and Turkey also increased. Argentina’s Merval index rallied 4.3 percent, rebounding from the lowest level since June.
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, gained 1.6 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, lost 3 percent.
Federal Grid Co. rose 7.2 percent, the most since June. Shares rallied after President Vladimir Putin signed a decree yesterday giving OAO MRSK Holding a majority stake in Russia’s monopoly for high-voltage power transmission. The combined company will be renamed OAO Rossiiskiye Seti. MRSK shares gained 6.1 percent in Moscow.
Eletrobras’s voting shares advanced 7.6 percent in Sao Paulo, paring this month’s slump to 41 percent. Petroleo Brasileiro SA (IBOV), Brazil’s state-controlled oil company, climbed 2.8 percent, helping push the benchmark Bovespa higher. The measure rose 2 percent, extending this week’s gain to 3.9 percent, the most since Sept. 14.
Samsung Electronics Co. (005930) climbed 1.4 percent to a record, valuing it at 212 trillion won ($195 billion) and making it the world’s 15th-biggest company by value. Fitch Ratings yesterday cut Sony Corp. and Panasonic Corp. to junk, improving the chances of Samsung, the world’s biggest maker of TVs, to extend its dominance.
Taiwan is studying measures to bolster stocks and plans to unveil a proposal in a month, according to Cabinet spokeswoman Cheng Li-wun. Premier Sean Chen has asked Minister Without Portfolio Kuan Chung-ming to prepare the proposal amid concerns over the U.S. budget and the impact of slumping stocks on the economy, Cheng said in a telephone interview today.
Taiwan Semiconductor Manufacturing Co. (2330) jumped 4.6 percent in Taipei. Taiwan’s state-controlled funds and banks that are partially owned by the government should buy local stocks at lows, the Central News Agency said, citing Finance Minister Chang Sheng-ford.
Volumes on the Taiwanese index were 74 percent higher than the 30-day average, while the gauge’s 30-day volatility rose to 14.7, the highest level since Aug. 22, data compiled by Bloomberg show.
“Taiwan’s equity market has received a big boost because domestic funds are the main players in the market,” One Asset Management’s Junchaya said. “Any support from government funds should help Taiwanese shares in the short term.”
The Russian ruble had its biggest weekly gain in two months at 2.1 percent against the dollar as companies converted dollar revenue to rubles to pay government taxes. South Africa’s rand gained for a second day, rising 0.8 percent. Brazil’s real climbed 1.1 percent from a three-year low after the central bank intervened in the currency market.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose one basis point, or 0.01 percentage point, to 295, according to JPMorgan Chase & Co.’s EMBI Global Index.
The Merval (MERVAL) index surged 4.3 percent after sinking yesterday to the lowest level in five months. A New York court ruling, obtained by Bloomberg on Nov. 21, stated Argentina must pay $1.33 billion to holders of its defaulted debt if it goes forward with next month’s scheduled payments of more than $3 billion on the nation’s restructured bonds.
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