March 12 (Bloomberg) -- Emerging-market stocks dropped the most in a week as falling commodities dragged down producers and investors speculated China may resume share sales.
OAO Rosneft, Russia’s largest oil company, slid for the first time in six days in Moscow as oil slumped. Impala Platinum Holdings Ltd. declined in Johannesburg as nickel and platinum declined. China Railway Construction Corp. led losses among Chinese rail stocks amid concern that reforms may boost competition. The rand sank to a four-year low after South Africa’s current-account gap stayed near a four-year high.
The MSCI Emerging Markets Index lost 0.5 percent to 1,058.44 at 5:16 p.m. in Hong Kong. Oil snapped three days of gains, while nickel and platinum retreated. China’s stocks slid a fourth day in Shanghai on speculation regulators may resume initial public offerings. The developing-nations measure surged 1.2 percent last week, the most in two months, as data from China to Japan and the U.S. bolstered the global economic outlook.
“The market has priced in all the good news and it needs to take a breather,” Lye Thim Loong, who helps manage the equivalent of $500 million at Libra Invest Bhd., said by phone in Kuala Lumpur. “People will need to find catalysts.”
South Korea’s Kospi Index fell 0.5 percent to a three-week low. India’s S&P BSE Sensex lost 0.1 percent amid concern a faster-than-estimated expansion in factory output may reduce the scope for monetary easing. Trading volumes for the Sensex were 13 percent below the 30-day average, according to data compiled by Bloomberg.
The Shanghai Composite Index slid 1 percent while the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 1.3 percent.
“The possibility IPO share sales will resume is spooking the market,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million.
Companies seeking IPO sales are expected to submit reports on self-examination of their financial statements starting next week to meet the end-March deadline, the China Securities Journal reported today, citing investment banks. The China Securities Regulatory Commission suspended issuance of IPO shares in late October after companies were found to report falling profits right after listings.
Russia’s Micex Index dropped 0.2 percent, the most in a week, and the ruble weakened for a second day.
Rosneft slid 0.9 percent, the most since March 1. Impala Platinum, the world’s second-largest producer of the metal, dropped 0.9 percent in Johannesburg, snapping a two-day gain.
The MSCI Emerging Markets Index has risen 0.3 percent this year, trailing a 7.2 percent gain in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.7 times 12-month projected profit, compared with the MSCI World’s 13.5 times, according to data compiled by Bloomberg.
China Railway Construction sank 6.5 percent in Hong Kong, the biggest loss in a year. China Railway Group Ltd. tumbled 5.1 percent, while China Communications Construction Co. slumped 2.8 percent. China’s plan to dismantle the Ministry of Railways to curb bureaucracy and corruption may affect companies that have enjoyed government support, Vivian Liu, an analyst at SinoPac Securities Corp., said by phone.
Sinopec Shanghai Petrochemical Co. tumbled 7.8 percent in Hong Kong, the biggest decline in the MSCI Emerging Markets Index. The stock has fallen 14 percent in four days.
GCL-Poly Energy Holdings Ltd. slumped 6.4 percent in Hong Kong after PV-Tech news reported that China plans to change rates earned by solar farms. - Bloomberg News