File picture: Alex Grimm

Jakarta - Emerging-market stocks climbed to a two-week high as Chinese financial shares surged on brokerage recommendations and rising gold prices lifted producers.

Kazakhstan’s tenge tumbled after the nation’s central bank devalued the currency.

China Minsheng Banking and China Construction Bank rose at least 3.1 percent in Hong Kong after JPMorgan Chase recommended buying the nation’s lenders.

Harmony Gold Mining added 2.2 percent in Johannesburg as gold rallied to the highest level since November.

Kazakhstan’s currency tumbled 16 percent to 185.89 tenge per dollar.

The MSCI Emerging Markets Index gained 0.6 percent to 941.21 as of 4:10 p.m. in Hong Kong, poised for the highest close since January 24.

Chinese stocks will probably rally as much as 20 percent in the coming weeks as gauges of economic growth stabilise and valuations rise from historic lows, JPMorgan said.

Goldman Sachs chairman and chief executive Lloyd Blankfein said China’s economic growth will have “huge consequences” for global expansion prospects.

“The JPMorgan report is a trigger point for investors to come in after some disappointing economic data recently,” Jeffrosenberg Tan, a fund manager at Jakarta-based PT Sinarmas Asset Management, said by phone today.

Federal Reserve Chairman Janet Yellen will deliver her first semi-annual monetary-policy testimony as investors weigh the pace of stimulus reductions against data this week that may show US retail sales stalled while jobless claims declined.


Stock Valuations


The emerging markets gauge has declined 6.1 percent this year and trades at 9.2 times projected 12-month earnings.

The MSCI World Index has fallen 2.4 percent in 2014 and is valued at 14.5 times, data compiled by Bloomberg show.

The Hang Seng China Enterprises Index surged 2.5 percent, the most since November 18.

It has dropped 8.9 percent this year, sending its valuation to a 32 percent discount versus the five-year average, as an official manufacturing index for January signaled a slowdown in the world’s second-largest economy.

The purchasing managers’ index tends to show higher readings in March and April, Michael Yu, a strategist at JPMorgan in Hong Kong, wrote in a report dated yesterday.

Eight out of 10 industry groups in the MSCI Emerging Markets Index gained, led by financial and technology stocks.

China Minsheng Banking and China Construction Bank both rose the most since November 18.


Top Picks


China Life Insurance, the nation’s biggest insurer, and Ping An Insurance both surged 5.1 percent.

Both stocks were on the top picks of China International Capital as major companies in the industry may post more than 40 percent growth in life premiums for January, analysts Tang Shengbo and Zhang Yu wrote in a report today.

The Shanghai Composite Index rose 0.8 percent to close at the highest level since January 2.

Zijin Mining Group, China’s largest gold producer, jumped 8.1 percent in Hong Kong.

Harmony Gold rose to the highest level since January 31.

Bullion headed for the longest rally since August.

PetroChina Co. advanced 1.4 percent in Hong Kong after its parent found a natural gas reserve that’s big enough to supply China’s needs for two years.


Currency Devaluation


Kazakhstan’s central bank devalued its currency, saying it would no longer defend the tenge at its previous level as reduced bond-buying by the Fed led to capital outflows from emerging markets.

The currency will be allowed to trade at 185 tenge per dollar, with a range of 3 tenge on either side, the National Bank of Kazakhstan said in an e-mailed statement today.

That compares with 155.63 per dollar at the close yesterday.

The decision came after the Argentinian central bank devalued its peso currency last month by the most in 12 years.

The Kazakhstan Stock Exchange Index jumped 12 percent, heading for steepest advance since February 2009.

Kazakhstan devalued its currency by 21 percent in February 2009, as the biggest energy producer in central Asia spent billions of dollars to support the economy and bail out its biggest lenders following the collapse of Lehman Brothers Holdings Inc.

Tata Motors, India’s biggest automaker, advanced 2.6 percent in Mumbai after the company posted profit that beat analyst estimates.

The Philippine Stock Exchange Index advanced 1.1 percent, while Turkey’s stock measure added 0.7 percent.

Gauges in Taiwan, South Korea and Indonesia rose 0.5 percent.

India’s rupee strengthened 0.2 percent versus the dollar, while Russia’s ruble and the Philippine peso weakened 0.2 percent. - Bloomberg News