Emerging Stocks Rise to Seven-Week High as Malaysia Jumps
Emerging stocks advanced, sending the benchmark gauge to a seven-week high, as Malaysian equities rallied after the ruling coalition won elections to extend its 55-year rule and higher oil fueled gains in energy shares.
UEM Land Holdings Bhd. (ULHB) surged 13 percent in Kuala Lumpur, while CIMB Group Holdings Bhd. (CIMB), Malaysia’s second-largest lender by assets, had its steepest gain since July 2003. The ringgit climbed the most since 2010. OAO RusHydro, the state-run power company, jumped 1.3 percent in Moscow. Brazil’s Ibovespa pared losses as Petroleo Brasileiro SA followed oil higher.
The MSCI Emerging Markets Index rose 0.4 percent to 1,046.02, the highest level since March 14. Malaysian stocks led gains among major developing-nation indexes as Najib Razak’s election may allow him to proceed with plans to narrow the budget deficit and boost investments. Oil rose as Syria threatened retaliation against Israel for an air strike.
“The election results in Malaysia were a positive surprise for investors,” Aldo Perkasa, who helps manage about $2 billion at PT Mandiri Manajemen Investasi, said by phone from Jakarta.
Eight out of 10 groups in the emerging-market index rose today as energy and industrial shares had the biggest gains. The broad gauge has lost 0.9 percent this year, compared with an 11 percent increase in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.9 times 12- month projected profit, compared with the MSCI World’s 14.4 times, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund gained 0.1 percent to $43.58. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 1 percent to 18.
The Ibovespa fell for the second time in three days as planemaker Embraer SA led industrial stocks lower after economists in a central bank survey cut their forecasts for growth in Brazil’s manufacturing output. Petrobras rallied 1.8 percent. Mexico’s IPC Index retreated 0.9 percent.
Russia’s Micex Index rose to an almost one-month high as RusHydro, the nation’s biggest renewable energy producer, extended last week’s gain. Benchmark gauges in Poland, Czech Republic and Hungary rallied. Turkey’s Borsa Istanbul National 100 index added 0.7 percent in a 10th day of gains.
TAV Havalimanlari Holding AS, Turkey’s biggest airport operator, dropped a second day after withdrawing from a government auction to build and operate a facility in Istanbul. The stock had the biggest decline on the emerging-market index.
The FTSE Bursa Malaysia KLCI Index rose 3.4 percent, its steepest increase since November 2008. UEM Land surged the most since Jan. 6, 2011, and CIMB advanced 9.7 percent in Kuala Lumpur after Nomura Holdings Inc. said in a report the stocks will benefit from the polls results.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong jumped 1.4 percent and the Shanghai Composite Index added 1.2 percent. The yuan fell in Hong Kong’s offshore market by the most in 15 months and the onshore spot rate retreated from a 19-year high as China stepped up scrutiny of cash transfers from abroad.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries slid three basis points, or 0.03 percentage point, to 267 basis points, according to JPMorgan’s EMBI Global Diversified Index.