Bloomberg News

Emerging Stocks Advance on U.S Data, China Congress

March 02, 2012

Emerging-market stocks rose, with the benchmark index set for a third weekly gain, after U.S. jobless claims fell and amid speculation China may introduce policies to support growth at a national congress next week.

OAO Novatek (NVTK), Russia’s second-largest natural gas producer, jumped 1.5 percent. China’s property stocks increased after a report said China Vanke Co. (000002) plans to sell more homes this year. BHP Billiton Ltd. (BIL) and Anglo American Plc (AAL) each slipped 1 percent in South Africa as gold and copper prices retreated.

The MSCI Emerging Markets Index (MXEF) advanced 0.2 percent to 1,078.67 as of 10:03 a.m. London time. The gauge has gained 1.2 percent this week. China’s Shanghai Composite Index climbed 1.4 percent ahead of the National People’s Congress meeting on March 5. A U.S. government report yesterday showed the number of first-time jobless claims fell to a level matching a four-year low, more evidence the labor market in the world’s biggest economy is healing.

“A significant improvement in the jobless data means better consumption in the U.S. and that’s positive for exporters in emerging markets,” said Aldo Perkasa, who helps manage $2.2 billion in assets at PT Mandiri Manajemen Investasi in Jakarta. “In China, the consumption portion isn’t as big as in the U.S. which is why they still need support from the government to boost the economy.”

Europe’s leaders also agreed to accelerate payments to a bailout fund.

Vietnam Stocks Jump

Vietnam’s benchmark VN Index (VNINDEX) jumped 2.7 percent, the most in Asia. The Bux Index (BUX) rose 0.2 percent in Hungary.

The Micex Index (MICEX) gained 0.3 percent in Moscow. Oil prices surpassed $110 a barrel for the first time since May yesterday after Iran’s Press TV said an explosion hit pipelines in the area, home to Saudi Arabia’s largest refinery. Oil slid as much as 0.9 in New York after Saudi Arabia denied the report.

The FTSE/JSE Africa All Share Index (JALSH) slipped 0.6 percent in Johannesburg.

Inflows into emerging-market equities reached $1 billion for the week ended Feb. 29, the ninth straight week of inflows, Citigroup Inc. said. Foreigners bought $22.6 billion worth of stocks in India, South Korea, Taiwan, Indonesia, Thailand and the Philippines in the first two months of 2012, analysts led by Markus Rosgen wrote in a report today, citing data compiled by EPFR Global. The last time foreign buying activity reached this magnitude was in October 2010, according to the report.

China’s Shanghai Composite Index (SHCOMP) rose to the highest since Nov. 17. Members of the National People’s Congress, whose annual meeting will run for a week and a half, are some of China’s most powerful politicians and executives, wielding power in their home provinces and weighing in on proposals such as whether to impose a nationwide property tax.

China Home Sales

China Vanke, the nation’s largest listed property developer, advanced 4 percent. The company has set an internal target for 2012 homes sales of more than 148 billion yuan ($23.5 billion), the Economic Observer reported, citing an unidentified person familiar with the matter. The company’s 2011 actual home sales were 121.5 billion yuan.

Vietnam’s VN Index jumped to the highest close since Sept. 23 after the chairman of the country’s market regulator signaled borrowing costs will fall.

The Philippine Stock Exchange Index (PCOMP) increased 1.6 percent to a record close.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell two basis points, or 0.02 percentage point, to 347, according to JPMorgan Chase & Co.’s EMBI Global Index.

The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps was little changed at 264 basis points, according to data provider CMA.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net; Jason Webb in London at jwebb25@bloomberg.net.

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


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