Emerging-market stocks rose for a fifth day on speculation China will take steps to boost domestic consumption, while U.S. lawmakers arranged meetings to avert budget cuts threatening growth in the world’s largest economy.
Citic Securities Co. and Haitong Securities Co. led Chinese brokerages higher after the country’s regulator said it will ease bond financing for securities firms. Eletropaulo Metropolitana SA jumped to a two-month high to lead gains Sao Paulo. OMV Petrol Ofisi AS, Turkey’s biggest fuel retailer, rose the most in almost five months after receiving approval to sell a unit.
The MSCI Emerging Markets Index added 0.5 percent to 1,054.47 as of 10 a.m. in New York, poised for the highest close since April 3 and extending a sixth weekly gain to 1.1 percent. China may introduce measures to boost consumption in areas such as autos, household electronics and solar, the China Securities Journal said. Congressional leaders plan to meet with President Barack Obama today and House Republicans will convene Dec. 30 as lawmakers work to avoid the more than $600 billion in spending cuts and tax gains scheduled to start in January.
“Investors believe differences over the U.S. budget issues will be resolved soon,” Kim Dae Young, a Seoul-based fund manager at KB Asset Management Co., which manages about $28 billion in assets, said by phone. “Policies from China’s new leadership are likely to match investors’ expectations.”
The developing-nations gauge has risen 15 percent this year, beating the 13 percent increase in the MSCI World Index of developed countries. The emerging-markets gauge trades at 12.1 times estimated profit, compared with the MSCI World’s 13.7, according to data compiled by Bloomberg.
Brazil, Russia
Brazil’s Bovespa Index gained 0.2 percent, the first advance in four sessions. Preferred shares of Eletropaulo, Brazil’s largest power distributor, jumped 4.9 percent to the highest price in two months.
Banco Bradesco SA, Brazil’s second-biggest bank by market value, increased the most in a week after Brazil’s central bank cut reserve requirements for lenders to spur investments in Latin America’s largest economy.
Benchmark indexes in Hungary and Romania rose. Russia’s 50- stock Micex Index fell 0.2 percent as Urals crude, Russia’s main export blend, declined. OAO Mostotrest, a bridge and road builder, was the worst performer on the index, dropping 7.3 percent. OAO Aeroflot, Russia’s biggest airline, rose 2.8 percent to the highest price in three months.
The Istanbul Stock Exchange National 100 Index rose to a record for a fourth day. OMV Petrol jumped 6.6 percent, the most since Aug. 8, after the anti-trust board gave approval to sell its 100 percent stake in Petrol Ofisi Arama Uretim Sanayi & Ticaret AS to Tiway Oil BV.
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.
