Bloomberg News

Emerging-Market Stocks Climb From Six-Month Low on Stimulus Bets

June 05, 2012

Emerging-market stocks rose from a six-month low, with South Korea and Taiwan leading gains, on optimism finance ministers and central bank governors will speed up efforts to resolve Europe’s financial crisis.

The MSCI Emerging Markets Index added 0.4 percent to 886.41 in New York, rebounding from the lowest level since Nov. 25. PT Bank Danamon Indonesia (BDMN), which Singapore’s DBS Group Holdings Ltd. is seeking to buy, jumped 11 percent on speculation Indonesia will announce new bank ownership rules next week. Retailer B2w Cia. Global Do Varejo fell a record low to lead declines in Brazil.

Group of Seven officials said they will work together to help Spain and Greece place their public finances on a sustainable footing, Japanese Finance Minister Jun Azumi told reporters in Tokyo following the group’s conference call today. European representatives “said they will speed up their efforts to resolve those problems, which was encouraging to us,” Azumi said.

“Talk about some coordination is certainly good,” Tim Hall, who manages about $700 million at Deltec Asset Management, said by phone from New York. “Answering the questions of what is going on in the developed market will help the emerging markets.”

The Reserve Bank of Australia today cut its key interest rate by 25 basis points to 3.5 percent, saying the outlook in Europe remains clouded by fiscal uncertainties.

The MSCI Emerging Market Index has fallen 3.3 percent in 2012 and trades at a multiple of 9.6 times estimated earnings, compared with the average of 11.5 for companies traded on the MSCI World Index, which has fallen 2.1 percent this year.

Bank Danamon

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.1 percent to 585.22 in New York.

OAO Rosneft, Russia’s largest oil company, fell 3.5 percent and was among leading decliners in Russia’s benchmark index. Russia’s Micex Index retreated 0.7 percent in Moscow.

Brazil’s Bovespa dropped 1.8 percent after B2W Cia tumbled 8.3 percent to the lowest level on record. Usinas Siderurgicas de Minas Gerais SA (USIM5), a Brazilian steel producer, declined 7.6 percent to the lowest since July 2005.

Bank Danamon, which is 67 percent owned by Singapore’s Temasek Holdings Pte, was the biggest gainer on the emerging stock index today. Bank Indonesia may announce new rules on bank ownership next week, Edi Setiadi, an executive director of the Syariah Banking department at Bank Indonesia, told reporters in Singapore today.

Taiwan’s Taiex Index (TWSE) added 1.5 percent while Indonesia’s Jakarta Composite Index rose 1.7 percent. Hong Kong’s Hang Seng China Enterprises Index advanced 0.2 percent.

Steepest Rise

A gauge of information technology stocks rose 1.2 percent, the steepest advance among the 10 industry groups on the MSCI Emerging Markets Index. (MXEF)

Taiwan Semiconductor Manufacturing added 2.2 percent, rebounding from a 4.3 percent drop yesterday. Acer Inc. (2353), Taiwan’s largest computer maker, jumped 7 percent, the most since September, after saying Microsoft Corp.’s Windows 8 software will help boost sales.

Apple Inc. was denied its renewed request for a ban on U.S. sales of Samsung Electronics Co.’s Galaxy Tab 10.1 tablet computer while the case is still before a federal court of appeals. South Korea’s Samsung gained 0.6 percent.

The WIG20 Index retreated 1.8 percent in Warsaw while the BUX Index dropped 0.6 percent in Hungary.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries dropped 11 basis points, or 0.11 percentage point, to 422, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Christine Harvey in New York at charvey32@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net; Tal Barak Harif at tbarak@bloomberg.net


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