Emerging Stocks Rise Amid Taiwan-China Exchange Link Speculation

Emerging-market stocks rose for a third day as Taiwan’s shares surged the most since 2013 amid speculation officials will broaden access to China’s capital markets.

The MSCI Emerging Markets Index advanced 0.8 percent to 1,055.99. The Taiex Index rallied 1.9 percent. The Shanghai Composite Index rose to the highest level since March 2008. The Ibovespa rallied to a five-month high as Brazilian exporters including iron-ore producer Vale SA advanced with commodities. The ruble climbed 2.7 percent as Russian companies converted foreign-currency earnings to meet tax deadlines.

China’s securities regulator is studying setting up a stock-trading link between Shanghai and Taipei, the Economic Daily News reported Wednesday. Hong Kong’s benchmark equity gauge has jumped 17 percent amid record turnover since a link with Shanghai began in November.

“Asia is strong because Chinese retail investors continue to buy Chinese stocks and because there are rumors about some opening up between China and Taiwan,” Maarten-Jan Bakkum, a senior emerging-market strategist at NN Investment Partners in The Hague, said by e-mail.

The developing-nation gauge has risen 10 percent this year and trades at 12.7 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4.9 percent in the period, and is valued at a multiple of 17.1.

Ruble, Real

The ruble strengthened for a second day versus the dollar on demand for local currency from domestic exporters before scheduled tax payments. The dollar-denominated RTS Index of Russian stocks advanced 2.4 percent. Brent crude, the oil grade traders use to price Russia’s main export blend, rose 3.4 percent to $64.85 a barrel, the highest level this year.

Vale, the world’s largest iron-ore producer, jumped 8.4 percent as the Ibovespa jumped 2 percent. Brazilian exporters rallied as the Standard & Poor’s GSCI gauge of 24 raw materials rose 2 percent to the highest level this year.

Petroleo Brasileiro SA slid 1.5 percent after the Brazilian state-run oil company said a corruption scandal cost $2.1 billion.

The Taiex jumped the most since July 2013, as Fubon Financial Holding Co. and Cathay Financial Holding Co. rose at least 4.7 percent.

Taiwan isn’t conducting any study on a stock trading link with Shanghai, Financial Supervisory Commission Minister Tseng Ming-chung said Wednesday. His comments refuted the Economic Daily News report that said a link was being considered.

China Manufacturing

China will allow Taiwanese financial firms to invest in mainland capital markets under a quota-based system, China Securities Regulatory Commission Vice Chairman Jiang Yang said Wednesday.

Nine out of 10 industry groups in MSCI’s developing-nation gauge rose. Hyundai Motor Co. lifted South Korean equities to a 2011 high after its first-quarter net income beat estimates.

The Shanghai Composite Index advanced 0.4 percent, while the Hang Seng China Enterprises Index halted a two-day gain after weak manufacturing data.

The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics for China was at 49.2 in April, missing the median estimate of 49.6 in a Bloomberg survey.

The premium investors demand to own emerging-market debt over U.S. Treasuries increased two basis points to 344 basis points, according to JPMorgan Chase & Co. indexes.

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