Emerging stocks advanced, sending the benchmark gauge to a seven week high, as Malaysian equities rallied after the ruling coalition won elections to extend its 55-year rule and higher oil fueled gains in energy shares.
UEM Land Holdings Bhd. (UEM) surged 13 per cent in Kuala Lumpur, while CIMB Group Holdings Bhd (CIMB), Malaysia’s second largest lender by assets, had its steepest gain since July 2003.
The ringgit climbed the most since 2010. OAO RusHydro, the state-run power company, jumped 1.3 per cent in Moscow. Brazil’s Ibovespa pared losses as Petroleo Brasileiro SA followed oil higher.
The MSCI Emerging Markets Index rose 0.4 per cent to 1,046.02, the highest level since March 14. Malaysian stocks led gains among major developing-nation indexes as Datuk Seri Najib Tun Razak’s election may allow him to proceed with plans to narrow the budget deficit and boost investments.
Oil rose as Syria threatened retaliation against Israel for an air strike.
“The election results in Malaysia were a positive surprise for investors,” Aldo Perkasa, who helps manage about US$2 billion at PT Mandiri Manajemen Investasi, said by phone from Jakarta.
Eight out of 10 groups in the emerging-market index rose yesterday as energy and industrial shares had the biggest gains. The broad gauge has lost 0.9 per cent this year, compared with an 11 per cent increase in the MSCI World Index of developed-country stocks.
The emerging-markets measure traded at 10.9 times 12 month projected profit, compared with the MSCI World’s 14.4 times, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund gained 0.1 per cent to US$43.58. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped one per cent to 18.
The Ibovespa fell for the second time in three days as planemaker Embraer SA led industrial stocks lower after economists in a central bank survey cut their forecasts for growth in Brazil’s manufacturing output. Petrobras rallied 1.8 per cent. Mexico’s IPC Index retreated 0.9 per cent.
Russia’s Micex Index rose to an almost one-month high as RusHydro, the nation’s biggest renewable energy producer, extended last week’s gain. Benchmark gauges in Poland, Czech Republic and Hungary rallied. Turkey’s Borsa Istanbul National 100 index added 0.7 per cent in a 10th day of gains.
TAV Havalimanlari Holding AS, Turkey’s biggest airport operator, dropped a second day after withdrawing from a government auction to build and operate a facility in Istanbul. The stock had the biggest decline on the emerging-market index.
The FTSE Bursa Malaysia KLCI Index rose 3.4 per cent, its steepest increase since November 2008. UEM Land surged the most since January 6, 2011, and CIMB advanced 9.7 per cent in Kuala Lumpur after Nomura Holdings Inc said in a report the stocks would benefit from the polls results.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong jumped 1.4 per cent and the Shanghai Composite Index added 1.2 per cent.
The yuan fell in Hong Kong’s offshore market by the most in 15 months and the onshore spot rate retreated from a 19-year high as China stepped up scrutiny of cash transfers from abroad.
India’s S&P BSE Sensex rose 0.5 per cent as Reliance Industries Ltd climbed the most since February 20. Korea’s Kospi Index declined 0.2 per cent.
The extra yield investors demand to own emerging-market debt over US Treasuries slid three basis points, or 0.03 percentage point, to 267 basis points, according to JPMorgan’s EMBI Global Diversified Index. — Bloomberg