Bloomberg News

Emerging Stocks Rise to 7-Month High on U.S Data, China Reform Speculation

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.

Hyundai Motor Co. (005380), South Korea’s largest automaker, climbed 1.9 percent and Kia Motors Corp. (000270) added 1.4 percent as combined sales in the U.S. surged 26 percent last month. China’s property stocks jumped after a report said China Vanke Co. (000002) aims to sell more homes this year. Hanjin Shipping Co. rallied to a seven- month high in Seoul on prospects of higher cargo rates.

The MSCI Emerging Markets Index advanced 0.4 percent to 1,080.63 as of 2:55 p.m. Singapore time, set for the highest close since Aug. 3. The gauge has gained 1.2 percent this week. China’s Shanghai Composite Index (SHCOMP) climbed 1.4 percent ahead of the National People’s Congress, which is legally the highest government body in China. Vietnam’s benchmark VN Index jumped 2.7 percent, the most in Asia. The Philippine Stock Exchange Index (PCOMP) rose 1.6 percent to a record close.

“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.”

Fund Inflows

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 a total $22.6 billion of stocks in India, South Korea, Taiwan, Indonesia, Thailand and 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.

A U.S. government report yesterday showed the number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market in the world’s biggest economy is healing. Europe’s leaders also agreed to accelerate payments to a bailout fund.

The MSCI Emerging Markets Index (MXEF) has risen 18 percent this year while the MSCI World Index of developed nations gained 10 percent. The gauge of developing nations is valued at 10.8 times estimated profit, below the four-year average of 12 times, data compiled by Bloomberg show.

Biggest Gainers

Gauges tracking healthcare stocks, industrial companies and consumer discretionary shares on MSCI’s developing-nation index posted the biggest gainers today among the 10 industry groups.

Hyundai Motor added 1.9 percent while Kia Motors Corp. rose 1.4 percent in Seoul. Combined sales in the U.S. rose 26 percent in February from a year earlier.

Shipping companies advanced after container freight rates on Asia to Europe routes more than doubled, according to estimates by Drewry Shipping Consultants Ltd.

Hanjin Shipping, South Korea’s largest shipping line, surged 6.1 percent in Seoul. The company is seeking to raise rates for cargo hauled to Europe from Asia starting April 1, it said in a statement. STX Pan Ocean Co. (028670) jumped 9 percent.

China’s Shanghai Composite Index rose 1.4 percent to 2,460.69, 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 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.

The target is optimistic, according to Li Shaoming, an analyst at China Investment Securities Co.

Vietnam’s VN Index (VNINDEX) rose 2.7 percent to 439.60 the highest close since Sept. 23, after the chairman of the market regulator signaled that borrowing costs will fall.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

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


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus