Emerging ETF Jumps as Shanghai Gains on Trade; Real Drops

The iShares MSCI exchange-traded fund tracking emerging-market shares jumped and stocks in Shanghai surged as rising exports burnished the outlook for the world’s second-largest economy. Brazil’s real fell amid intervention.

Great Wall Motor Company Ltd., a Chinese sport utility vehicle maker, led a rally in emerging consumer stocks as data showed vehicle sales surged. OAO Gazprom, the world’s biggest producer of natural gas, drove Russia’s benchmark Micex Index to a three-week low. The real weakened from a nine-month high as Brazil’s central bank acted to curb strength by offering reverse currency swaps.

The emerging-market ETF gained 0.7 percent to $43.85 in New York, narrowing its decline this week to 1.5 percent. The MSCI Emerging Markets Index of 821 developing-nation stocks added 0.1 percent as it posted its steepest weekly drop since November. The Shanghai Composite Index added 0.6 percent as government data showed Chinese trade expanded more than analysts estimated last month and a broad measure of credit climbed to a record. Exports grew 25 percent from a year earlier.

“We’re still in a mildly risk-on environment, but we’ve seen very mixed policy signals coming out of places including Brazil,” Gavin Redknap, an emerging-markets strategist at Nikko Asset Management Co., said by phone from London. “There will be a bit of consolidation given that we’ve seen such strong gains over the course of December and January.”

Falling Volatility

The MSCI emerging-markets gauge, which has climbed 5.3 percent since the end of November, posted a 1.1 percent drop this week, the most since the five days ended Nov. 16. The measure’s 100-day volatility sank to 8.8, the lowest level since August 1997, data compiled by Bloomberg show.

The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 4.6 percent.

Brazil’s Bovespa posted a 3.1 percent weekly retreat as the real’s advance this week dimmed the prospects for Brazil’s exporters. The currency slipped 0.3 percent to 1.9727 per dollar today after earlier rising to the strongest intraday level since May 11. Finance Minister Guido Mantega signaled policy makers would allow the real to appreciate another 5 percent.

The government will curb the rally in the currency if it reaches 1.85 per dollar, Mantega said in an interview with Reuters. The government won’t allow speculative appreciation of the real, the Finance Ministry said in an e-mailed statement to Bloomberg News.

Pulp company Fibria Celulose SA retreated 3.4 percent to the lowest level in a month, leading daily declines on the Bovespa.

Gazprom Dividends

Istanbul’s ISE National 100 Index added 0.7 percent. Turkish real-estate company Emlak Konut Gayrimenkul Yatirim Ortakligi AS dropped the most on record as it plans a second public offering of shares to finance projects, Bloomberg HT television reported today, citing sources it didn’t identify.

Russia’s Micex index fell for a third day as Gazprom lost 1 percent, extending its weekly decline to 3.4 percent. The Micex Index slid 0.4 percent, the lowest since Jan. 16.

Gazprom, Russia’s biggest natural gas exporter, said it may pay 7 to 8 rubles a share for 2012 dividends, compared with 8.97 rubles paid for 2011, according to an investor presentation today. The company estimates 2012 net income of $38 billion, down from $44.5 billion a year earlier.

Poland’s WIG20 Index climbed for a second day, and the Czech Republic’s benchmark PX Index added 0.8 percent, the most in a month.

Consumer Rally

A gauge of emerging-market consumer discretionary stocks led gains in the MSCI developing-nation stock index, rallying 0.9 percent today and up 1.3 percent this week. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., jumped 12 percent in the week, as Nomura Holdings Inc. said the company is in a good position to achieve its 2012 sales target.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. climbed 0.7 percent, led by web games developer NetEase Inc., which posted the steepest two-day surge since 2010 after the stock was upgraded.

South Korea’s Kospi Index advanced 1 percent, the most since Jan. 2. The Shanghai Composite Index climbed 0.6 percent. Vietnam’s VN Index gained 0.7 percent to the highest level since March 2011. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 0.3 percent.

Trading volumes for the Kospi were 37 percent below its 30-day average, data compiled by Bloomberg show. Volumes were 19 percent lower for the Shanghai Composite before a weeklong holiday for the Lunar New Year. Volumes were more than double for the BSE India Sensex Index.

China Data

India’s rupee slipped 0.5 percent against the dollar after the government yesterday predicted economic growth will slow to the least in a decade. The Taiwanese dollar weakened 0.6 percent, while the won lost 0.7 percent, leading declines among emerging markets currencies.

China’s overseas shipments increased 25 percent from a year earlier, the customs administration said today, compared with the 17.5 percent median estimate in a Bloomberg News survey. Imports rose 28.8 percent, exceeding the 23.5 percent median forecast of analysts.

Great Wall Motor, the maker of China’s best-selling sport utility vehicle last year, surged 6.4 percent, snapping a five-day loss. Passenger-vehicle sales jumped 49 percent from a year earlier to a monthly record of 1.73 million units in January, the state-backed China Association of Automobile Manufacturers said in an e-mail yesterday. That compares with the 1.5 million unit average of six analyst estimates compiled by Bloomberg.

Hyundai, Cosco

Hyundai Motor Co. rose 4.8 percent in its steepest advance since Sept. 14, trimming its yearly decline to 4.1 percent, while Kia Motors Corp. gained 4.4 percent, paring its 2013 slump to 7.8 percent. Foreign investors may view recent declines in the stocks as excessive and are buying the companies’ shares, Kang Sang Min, an analyst at E*Trade Securities Ltd., said by phone.

China Cosco Holdings Co. advanced 5.4 percent in Hong Kong, the most since Jan. 10. The company plans to raise cargo rates from April 1, and expand services on the Asia to West Africa routes, according to notices on its website.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell four basis points, or 0.04 percentage point, to 271 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.

Before it's here, it's on the Bloomberg Terminal.