Emerging stocks rise to two-week high

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Johannesburg - Emerging-market stocks rose to a two- week high after China’s services industries accelerated and corporate expansion plans in the Philippines pushed the nation’s benchmark index to a record.

Ayala Corp. rallied to an all-time high in Manila after announcing investment plans for its energy unit. MISC Bhd. surged the most in more than 14 years in Kuala Lumpur after receiving a buyout offer.

Harmony Gold Mining, Africa’s third-largest producer, jumped the most since August 2011 in Johannesburg after profit climbed. The South Korean won gained against all its major peers.

The MSCI Emerging Markets Index advanced 0.4 percent to 1,076.82 at 4:41 p.m. in Singapore, poised for the highest close since Jan. 22. The gauge has risen for a third day, on course for the longest winning streak since January 3.

The measure’s 100-day volatility dropped to 9, the lowest level since August 1997.

China’s services industries grew at the fastest pace since August, the government said yesterday.

“There’s definitely a momentum of flows into equities,” Adrian Mowat, chief Asian and emerging market strategist at JPMorgan Chase & Co. said in a Bloomberg television interview in Hong Kong. In China, the “data is definitely improving. It’s a good near-term cyclical story.”

Taiwan’s Taiex index gained 0.9 percent, the highest close since March 30.

China’s Shanghai Composite Index climbed 0.4 percent, the highest since May 8, with volumes 31 percent more than the 30-day average.

Abu Dhabi’s ADX General Index added 0.3 percent, on course for the highest close since March 31, 2010.

China Growth

China’s services industries rose as gains in retailing and construction aided government efforts to drive a recovery. The non-manufacturing Purchasing Managers’ Index climbed to 56.2 in January from 56.1 in December, the National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.

Sany Heavy Industry Co., the biggest Chinese machinery maker, climbed 2.3 percent in Shanghai.

The Philippine Stock Exchange Index jumped 1.9 percent, the biggest gain among benchmark indexes in Asia, while the peso approached a five-year high, as expansion plans from companies including Ayala boosted confidence in the nation’s economic and earnings growth.

“This rally stands on firm ground,” said Paul Joseph Garcia, who helps manage the equivalent of $3 billion at Manila- based BPI Asset Management Inc. “Investors are willing to pay a premium for earnings visibility and future prospects.”

Japan’s public pension fund, the world’s biggest manager of retirement savings, may increase holdings in emerging-market stocks and start buying alternative assets, President Takahiro Mitani said in a Feb. 1 interview in Tokyo.

Pension Fund

Under Mitani’s leadership, the Government Pension Investment Fund began buying emerging-market assets in September 2011 and started purchasing shares in countries included in the MSCI Emerging Market Index last year.

The won rallied the most in 14 months, appreciating 1.2 percent to 1,084.78 per dollar in Seoul. Moon Woo Sik, a Bank of Korea board member, sees no immediate need to alter benchmark interest rates and thinks it’s too early for any central bank response to the yen’s slide against the won, according to an interview last week.

The rand declined for the first time in three days as investors speculated the currency’s gain last week, the biggest in almost four months, was overdone.

Gauges of technology companies and industrial stocks in the MSCI Emerging Markets Index added at least 0.6 percent, the most among 10 industry groups. The developing-nations measure has added 2 percent this year, trailing a 5.9 percent increase by the MSCI World Index. The emerging-markets index trades at 11 times estimated 12-month profit, compared with the MSCI World’s 13.7 times, data compiled by Bloomberg show.

MISC Jumps

The Standard & Poor’s 500 Index jumped 1 percent on the final trading day of last week after US payrolls rose 157,000 in January following a revised 196,000 advance in December and a 247,000 surge in November.

Ayala, owner of the nation’s biggest developer, added 4.1 percent. Its energy unit plans investments of as much as $200 million a year, said John Eric Francia, Ayala’s managing director.

MISC, the world’s second-largest liquefied natural gas shipper surged 17 percent, poised for the biggest gain since September 1998. Petroliam Nasional Bhd., or Petronas, offered 5.30 ringgit per share in cash for the remaining 37 percent stake in the shipping unit, according to a stock exchange filing on January 31, valuing the deal at 8.8 billion ringgit ($2.8 billion).

Harmony Gold

Harmony Gold jumped 7.7 percent, its first gain in three days. Earnings excluding one-time items advanced to 680 million rand ($77 million) in the quarter through December from 529 million rand in the prior three months, the company said in a statement today.

China Development Financial Holding Corp. jumped by the 7 percent daily limit. Mega Financial Holding Co. surged 6 percent and Fubon Financial Holding Co. increased 3.6 percent in Taipei.

Investors are optimistic about conducting yuan business with China, Eric Chang, analyst at Jih Sun Securities Co., said in a phone interview today. Taiwan lenders can start as early as February 6, the official Xinhua News Agency reported on January 31.

WPG Holdings Ltd. slumped 6.9 percent in Taipei, the most since August 2011. The company reported earnings per share of NT$2.73 last year, compared with NT$3.21 in the previous year, according to an exchange filing. Deutsche Bank AG cut the stock’s rating to hold.

ZTE Corp., China’s second-largest maker of telephone equipment, lost 4.8 percent in Hong Kong, the most since October 15. The International Trade Commission said on Jan. 31 it has started an investigation against companies including ZTE related to a patent-infringement complaint.

Ping An

Ping An Insurance (Group) Co. advanced 1.4 percent in Shanghai. HSBC Holdings Plc’s $7.4 billion sale of its stake in the insurer to Thai billionaire Dhanin Chearavanont was cleared by regulators.

Power Finance Corp., an Indian lender to electricity projects, jumped 7.4 percent in Mumbai. The company may acquire a stake in a bank, Chairman Satnam Singh said on CNBC-TV18 television channel.

Bank of Baroda sank 6.7 percent in Mumbai, the largest decline in the MSCI Emerging Markets Index, after the Indian lender posted third-quarter profit that missed analyst estimates. - Bloomberg


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