Emerging stocks rise to nine-month high on China policy, U.S. talks

Asian Markets

The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, added 0.1 percent to $43.57, the highest price in a week. 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, jumped 2.8 percent to 21.86.

The South Korean won gained 0.2 percent to the strongest level since September 2011, completing a sixth weekly gain as signs of a pickup in the economy attracted funds from abroad and exporters repatriated income. India’s rupee climbed 0.3 percent, while the Russian ruble dropped 0.5 percent, the first decline in three days.

The Shanghai Composite Index rallied 1.2 percent to the highest since June 21, paring the worst annual performance among major Asian markets this year. The BSE India Sensitive Index climbed 0.6 percent to the highest level in a week. Stock markets in South Korea, Taiwan, Indonesia, Thailand, the Philippines and Vietnam will be closed on New Year’s Eve.

Brokerage Bonds

China Everbright Ltd. soared 12 percent in Hong Kong, the biggest advance since October 2011, making it the best performer on the MSCI Emerging Markets index. The China State Council approved the reorganization of the company, Shanghai Securities News reported yesterday.

Citic Securities surged 11 percent in Hong Kong, while Haitong Securities climbed 6.9 percent. The Chinese government will allow brokerages to issue and trade subordinated bonds on approved exchanges, according to a statement posted on the China Securities Regulatory Commission’s website.

SAIC Motor Corp., the biggest Chinese automaker, jumped to the highest level since July, and BYD Co. Ltd., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., jumped 4.1 percent, rising for a seventh day.

Hyundai Motor

Hyundai Motor Co., South Korea’s biggest carmaker, slipped 2 percent to the lowest since Nov. 26 on concern a stronger won may cut the value of overseas earnings. Hyundai Mobis Co., South Korea’s biggest auto-parts maker, lost 1.9 percent.

“Investors’ concern about the 2013 outlook for automakers and the strengthening won may be affecting share prices today,” Lee Hyung Sil, an analyst at Shinyoung Securities Co., said by phone.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose 1 basis point, or 0.01 percentage point, to 272, according to JPMorgan Chase & Co.’s EMBI Global Index.

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