Emerging markets drop to six-week low as commodity stocks slide

Currencies Gain

South Korea’s won strengthened 0.3% versus the dollar in offshore trading. Indonesia’s rupiah rose to the highest in almost three weeks on optimism the central bank’s efforts to set an onshore fixing for its derivative contracts will stabilize the currency and bolster demand for local assets.

The MSCI Emerging Markets Index has added 0.3% this year, trailing a 5% increase by the MSCI World Index. The emerging-markets index trades at 10.3 times estimated profit, compared with the MSCI World’s 13.7 times, data compiled by Bloomberg show.

Severstal fell 2.5% after at least 10 coalminers died in an explosion in Russia’s northern Komi region. The blast may have been caused by a build-up of methane at a deposit owned by the steelmaker, according to the Emergency Ministry.

Akbank sank 3.4% in Istanbul after Yapi Kredi cut its stock recommendation to an equivalent of sell from hold and lowered the price target, according to an e-mailed report. Garanti Bank slid 3.2%.

New Models

Tofas Turk Otomobil Fabrikasi AS, the Turkish unit of Fiat SpA in partnership with Koc Holding AS, rose 0.5%. Chief Executive Officer Kamil Basaran said on Feb. 10 the company will disclose in July details about plans to develop two new subcompact models. HSBC Holdings Plc raised Tofas to an equivalent of buy from an equivalent of hold.

Mol Nyrt., Hungary’s biggest refiner, rebounded from its steepest slump in more than 15 months, leading a rally in Hungarian stocks. Mol rose 0.5% after dropping 5% on Feb. 8 as Dana Gas PJSC sold 1.675 million shares in the refiner to help refinance its Sukuk debt. The transaction, which Bloomberg News first reported on Feb. 7, was confirmed by Dana in a statement yesterday.

Air Arabia PJSC rose 3.3% to the highest level since May 2010 in Dubai on volume of almost five times the three-month daily average on bets improved full-year profit may prompt the airline to pay a bigger dividend.

Gold Fields

Gold Fields Ltd. slumped 1.4% in Johannesburg, as it spun off mining assets into Sibanye Gold Ltd., which is set to start trading in New York today. Gold Fields on Nov. 29 said it would place deeper, more labor-intensive South African mines into Sibanye.

United Tractors rose 3.6% in Jakarta, the most since Jan. 2. The company may maintain a rebound in heavy-equipment sales after reporting its January figures, according to Pandu Anugrah, analyst at Maybank Kim Eng Securities in Jakarta. Those sales surged 96% last month from December, Investor Daily Indonesia reported Feb. 8.

PT XL Axiata, an Indonesian mobile-phone operator, added 3.7% after the same newspaper reported the company will refinance 4.5 trillion rupiah ($468 million) of debt this year.

Cipla Ltd. jumped 3.8% in Mumbai after the stock slumped 8.1% last week. Dr. Reddy’s Laboratories Ltd. gained 2.3% after a five-day drop dragged it to a five-week low.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries slipped two basis points, or 0.02 percentage point, to 270 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.

Bloomberg News

<< Page 3 of 3

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome