Emerging Stocks Rise as Chinese Insurers Rally; Real AppreciatesIan Sayson and Natasha Doff
Emerging-market stocks rose, led by Chinese financial shares, on bets an interest-rate cut may boost profit. Brazil’s real gained amid optimism former Treasury Secretary Joaquim Levy could revive growth if appointed finance minister.
The MSCI Emerging Markets Index added 0.3 percent to 1,011.97. China Life Insurance Co. soared 7.2 percent to lead a gauge of Hong Kong-traded mainland shares to an 11-week high. The real appreciated 0.9 percent versus the dollar. Cnooc Ltd. dropped 1 percent. Energy producers slid as oil fell for a third day in New York.
The developing-nation gauge rose for the sixth time in seven days as China’s surprise cut in interest rates last week aimed at supporting the world’s second-largest economy buoyed equities. The Organization of Petroleum Exporting Countries meets in Vienna tomorrow after Venezuela, Saudi Arabia, Mexico and Russia decided not to reduce supplies.
“People now think that more Chinese stimulus is coming, which would take away some of the immediate financing risks,” Maarten-Jan Bakkum, an emerging-market strategist at ING Groep NV in The Hague, said by e-mail. “Expectations of no OPEC deal have driven oil prices down. This increases the pressure on the oil exporters.”
The MSCI developing-nation gauge is up 0.9 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has added 5.2 percent in the period, and is valued at a multiple of 15.5.
The real rose to 1.1 percent to 2.5015 per dollar. A government official with knowledge of the situation said yesterday that President Dilma Rousseff will nominate Levy to replace Finance Minister Guido Mantega as soon as tomorrow. The Ibovespa fell 0.8 percent. Vale SA led the decline in Brazilian stocks, dropping 4 percent as iron-ore prices sank to the lowest level since 2009.
The ruble fell 2.4 percent. The Micex Index gained 0.5 percent. Analysts are split evenly over whether OPEC will lower output in response to the crash in prices. Oil is Russia’s top export.
Nigeria’s Stock Exchange All Share Index rallied 1.4 percent to the highest level since Nov. 18. The naira rose 0.3 versus the dollar after the country’s first interest-rate increase in three years and simultaneous currency devaluation.
Seven out of 10 industry groups in the emerging-markets gauge climbed, led by financial stocks. The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong advanced 2.5 percent as China Life surged to the highest level since January 2013.
The Shanghai Composite Index rose 1.4 percent to the highest close since August 2011. Huatai Securities Co. jumped 10 percent after its board approved a plan to list H shares. Samsung Electronics Co. added 0.9 percent in Seoul on plans to sell its stake in Samsung Techwin Co.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 309 basis points, according to JPMorgan Chase & Co. indexes.