Emerging Stocks Fall on Asian Valuations as Jobs Lift ETF
Emerging-market equities dropped for a fourth day, the longest losing streak in five weeks, as declines in Philippine and Indonesian stocks outweighed an unexpected drop in American jobless claims.
Bank of the Philippine Islands fell 4 percent in Manila, sending the nation’s benchmark index to its longest stretch of losses in almost three months. PT Indofood Sukses Makmur (INDF) sank the most since June. OGX (OGXP3) Petroleo & Gas Participacoes SA, Brazil’s biggest decliner this year, rose the most in a week after declaring three fields commercial. The iShares MSCI Emerging Markets exchange-traded fund and Mexican stocks rose.
The MSCI Emerging Markets Index (MXEF) fell 0.1 percent to 1,047.70 in New York. Philippine stocks traded at 21.9 times reported profit March 11, the most expensive level since 2003, according to data compiled by Bloomberg. Indonesian shares were valued at 19.4 times March 8, the most since 2010.
“We have been leading gains in Asia for some time, so people are bound to take some money off the table,” Mark Canizares, who helps manage $1.5 billion as head of equities at Manulife Philippines, said by phone from Manila.
Stocks pared losses after government data showed that the number of people filing claims for U.S. unemployment benefits averaged 346,750 over the past four weeks, the lowest level since March 2008. The iShares ETF added 0.4 percent to $43.16 in New York, the first day of gains this week. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, fell 3 percent to 16.11.
“These jobless claims lead us to a more favorable conclusion that the economy is growing,” said Robert Lutts, the president and chief investment officer at Cabot Money Management Inc., which oversees $500 million in Salem, Massachusetts.
Five out of 10 groups in the MSCI Emerging Markets Index retreated as consumer discretionary and staples shares had the biggest losses. The broader measure has slipped 0.7 percent this year and trades at 11 times estimated 12-month earnings, according to data compiled by Bloomberg. That compares with a multiple of 14.3 for the MSCI World Index of developed-nation shares, which has climbed 7.6 percent in 2013.
The Philippine Stock Exchange Index (PCOMP) sank 1.2 percent, the biggest loss among Asian benchmark gauges, while the Jakarta Composite index declined 1 percent. Bank of the Philippine Islands (BPI), the nation’s biggest lender by market value, fell the most since Jan. 31 while Indofood sank 4.5 percent.
Brazil’s Bovespa index fell a third day, declining 0.2 percent. OGX, controlled by billionaire Eike Batista, gained 0.8 percent in Sao Paulo. The Rio de Janeiro-based explorer yesterday announced up to 1.3 billion barrels of oil in place at the Tubarao Tigre, Tubarao Gato and Tubarao Areia fields it declared commercial in the Campos Basin.
Poland’s WIG20 Index led gains in eastern Europe rising to the highest level since Feb. 1. PGE SA (PGE), Poland’s biggest power utility, rose 4.2 percent after saying it will review investment projects to adapt to “shifting market conditions.”
Russia’s Micex Index (VTBMICX) gained 0.2 percent. OAO Novatek (NVTK), Russia’s second-biggest natural-gas producer, rallied for the first time in four days after winning a license for a new field in the Arctic.
The Shanghai Composite rose 0.3 percent, snapping a five- day drop. The Hang Seng China Enterprises Index added 0.6 percent after earlier falling more than 10 percent from its Feb. 1 peak. China Resources Gas Group Ltd. (1193) climbed to a record after posting higher earnings.
Chinese stocks rebounded from a three-month low in New York, led by Vipshop Holdings Ltd., on optimism the nation’s new leaders will focus on boosting consumption to fuel economic growth. The online fashion discounter rallied 7.9 percent after raising $96 million selling shares.
India’s S&P BSE Sensex (SENSEX) added 1.1 percent, led by banks and consumer companies. ICICI Bank Ltd. (ICICIBC) and HDFC Bank Ltd. (HDFCB), India’s largest non-state-owned lenders, climbed more than 2 percent.
The extra yield investors demand to own emerging-market bonds over U.S. Treasuries declined 2 basis point, or 0.02 percentage point, to 281 basis points, according to JPMorgan Chase & Co’s EMBI Global Index.