Emerging-market equities advanced for a fourth day, led by technology companies, as China’s industrial profits increased and U.S. lawmakers seek to resolve a budget impasse.
BYD Co. (1211), the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc. (A:US), climbed to an eight-month high in Hong Kong after saying it plans to build a solar power plant. HTC Corp. (2498) advanced to the strongest level in three months in Taipei. Turkcell Iletisim Hizmetleri AS (TCELL), Turkey’s biggest mobile company, gained as the country’s benchmark index rose to a record. Petroleo Brasileiro SA (PETR4), Latin America’s largest oil company by market value, led declines in Sao Paulo.
The MSCI Emerging Markets Index (MXEF) added 0.3 percent to 1,049.45 in New York, its biggest gain in a week. Net income at Chinese industrial companies increased 22.8 percent to 638.5 billion yuan ($102 billion) in November from a year earlier, according to government data today. The U.S. House of Representatives will meet on the evening of Dec. 30 as the deadline nears to avoid more than $600 billion in tax increases and spending cuts scheduled to take effect Jan. 1.
“The fiscal cliff worries have people concerned about the U.S much more than emerging markets,” Jonathan Masse, a senior portfolio manager at Baochuan Capital Management LLC, said by phone from Walnut Creek, California. “It’s kind of like a reverse flight to safety.” Economic data from China “is certainly reassuring investors as well,” he said.
MSCI’s emerging-market gauge has risen 15 percent this year, beating a 13 percent increase by the MSCI World Index. (MXWO) The developing-nations index trades at 12 times estimated profit, compared with the MSCI World’s 13.7 multiple, according to data compiled by Bloomberg.
The Istanbul Stock Exchange National 100 Index advanced for a fourth day, rising 0.6 percent to a record. The index has rallied since Turkey was raised to investment grade by Fitch Ratings on Nov. 5. Turkcell added 3.1 percent, the biggest gain in three months, while power utility Zorlu Enerji Elektrik Uretim AS (ZOREN) climbed 2.7 percent to the highest price in four months.
Benchmark indexes in Argentina and Colombia rose. Brazil’s Bovespa Index (IBOV) lost 0.9 percent, retreating for a third day. Petrobras, as the state-owned oil company is known, dropped 3.2 percent after Valor Economico reported that it’s losing money by offering natural gas below cost.
Hypermarcas SA (HYPE3), the Brazilian maker of generic forms of the drugs Valium and Claritin, added 1.9 percent to the highest in two months. Brazil’s inflation was slower than projected, spurring speculation that the central bank will hold borrowing costs at record lows.
Indexes in Taiwan, South Korea, Poland and Romania climbed. Russia’s Micex Index was little changed as manufacturing in the country stalled for the first time in 15 months in December and the industry stumbled for the steepest drop in four years, HSBC Holdings Plc said.
OAO Pharmstandard, Russia’s largest drugmaker, advanced 5.6 percent, the most since Oct. 1. The Russian government plans to limit state imports of foreign pharmaceuticals to stimulate domestic production, Vedomosti reported today, citing draft decrees by the Economy Ministry.
The Russian ruble strengthened for a second day, gaining 0.9 percent against the dollar, and South Africa’s rand rose 1.1 percent.
The iShares MSCI Emerging Markets Index (EEM:US) exchange-traded fund, the ETF tracking developing-nation shares, added 0.6 percent to 43.54. The ETF has risen 15 percent this year. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, lost 2.1 percent to 21.26.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose 3 basis points, or 0.03 percentage point, to 270, according to JPMorgan Chase & Co.’s EMBI Global Index.
The MSCI Emerging Markets Information Technology Index advanced 0.8 percent, leading gains among 10 industry groups in the broader gauge. The MSCI Emerging Markets Energy Index was the only decliner, falling 0.2 percent.
The Hang Seng China Enterprises Index (HSCEI) gained 0.7 percent after a two-day holiday. The Shanghai Composite Index (SHCOMP) slid 0.6 percent from a five-month high. The Philippine Stock Exchange Index dropped 0.7 percent from a record after the government imposed limits on currency-forward positions.
BYD jumped 4.8 percent to the highest close since April 20. The Chinese carmaker partly owned byBuffett’s Berkshire Hathaway agreed with the government of Yulin to develop a 500- megawatt solar power plant in the city in China’s northwestern province of Shaanxi.
“Asian markets are higher today likely due to increasing confidence that China’s industrial engine is building in momentum,” Geoffrey Ng, who helps oversee $1.8 billion as chief executive officer at Hong Leong Asset Management Bhd. in Kuala Lumpur, wrote in a text message. “This supports China’s export base which many Asian countries are dependent on from a supply chain perspective.”
Huaneng Power International Inc. (902) advanced 2.9 percent in Hong Kong. China’s power generating industry reported 62.9 percent growth in profits in the January-November period from a year earlier.
HTC Corp. climbed 5.9 percent for its highest close since Sept. 26. Its HTC Butterfly J phone rose one spot in Japan’s rankings to No. 10 in the Dec. 17 to Dec. 23 sales period, CNA reported, citing researcher BCN.
LG Display Co. (034220) rallied 3.7 percent in Seoul, the most since Nov. 20, after Shinhan Investment Corp. said today that the company may post higher-than-expected operating profit in the fourth quarter.
KT Corp. (030200) and SK Telecom Co. (SKM:US) led declines among developing- nation equities as the stocks trade without the rights to final dividends.
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