Bloomberg News

Emerging-Market Stocks Advance; Technology Companies Lead Gains

February 23, 2012

Feb. 22 (Bloomberg) -- Emerging-market stocks rose, led by technology companies and energy producers, as Alibaba.com Ltd. rallied following a buyout offer and oil traded near a nine- month high.

Alibaba.com, China’s biggest corporate e-commerce site, surged 42 percent after its parent company bid as much as HK$19.6 billion ($2.5 billion) to buy out minority shareholders. Foxconn Technology Ltd. rose 6.7 percent after it was rated new “outperform” at Credit Suisse Group AG. China Oilfield Services Ltd. climbed 4 percent.

The MSCI Emerging Markets Index gained 0.2 percent to 1,066.06 as of 2:33 p.m. in Singapore. The measure dropped as much as 0.5 percent earlier on concern a bailout package for Greece won’t resolve Europe’s debt crisis. Taiwan’s Taiex index advanced 1 percent while Thailand’s SET Index was set for its highest close since 1996.

“Investors are selecting stocks with good stories and earnings prospects while they remain cautious as Europe’s debt crisis remains unresolved,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “The market would like to see the measure’s implementation.”

The MSCI Emerging Markets Index has gained 16 percent this year, while the MSCI World Index of developed nations added 9.5 percent. The gauge of developing nations is valued at 10.7 times estimated profit, compared with the MSCI World’s multiple of 12.9 times.

Alibaba Offer

A gauge tracking technology companies on MSCI’s developing- nation index climbed 1.3 percent today, the most among the 10 industry groups and the biggest contributor to gains.

Alibaba surged 42 percent to HK$13.18, bound for the sharpest gain since November 2007. Alibaba Group Holding Ltd., controlled by billionaire Jack Ma, offered HK$13.50 a share for the 27 percent it doesn’t already own in Alibaba.com, according to a Hong Kong Stock Exchange statement yesterday.

Foxconn, which makes casings for Apple Inc.’s iPhones, climbed 6.7 percent to NT$136, the sharpest increase in two weeks. Apple may use metal casings for its next iPhone, a potential product for Foxconn, Credit Suisse analyst Pauline Chen wrote in a report.

China Oilfield Services climbed the most in three weeks. PetroChina Co., the nation’s biggest oil company, rose 1.4 percent.

Iran Tension

Oil for April delivery was at $106.20 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange. Crude traded near the highest level in nine months as concern that tension with Iran will disrupt supplies countered speculation the global economy may falter and curb fuel demand.

The International Atomic Energy Agency said talks over Iran’s nuclear program failed, while an Iranian general threatened military action.

China’s manufacturing may shrink for a fourth month in February, indicating the world’s second-biggest economy remains vulnerable to a deeper slowdown as Europe’s crisis caps exports and the housing market cools.

The preliminary 49.7 reading of an index from HSBC Holdings Plc and Markit Economics today compared with a final 48.8 in January. A number below 50 points to a contraction. January and February economic data are distorted by a weeklong holiday.

Europe’s agreement yesterday on a second rescue package for Greece may not be enough to end the debt crisis, Bank of England Deputy Governor Charlie Bean said yesterday. Euro-area finance ministers awarded 130 billion euros ($172 billion) in aid to Greece and reached an accord for greater debt relief from investor representatives in an exchange offer to tide the nation past a bond redemption next month.

Shipping companies declined. Cosco Pacific Ltd., which operates container facilities at Greece’s Piraeus port, fell 3.1 percent. STX Pan Ocean Co. declined 2.2 percent.

-- Editors: Richard Frost, Matthew Oakley

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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