Emerging Stocks Advance to Four-Week High as Ringgit Strengthens

02/04/2015 11:02 AST

Emerging-market stocks rose to a four-week high as investors speculated disappointing U.S. economic data will spur the Federal Reserve to keep interest rates low. Malaysia’s ringgit led developing-nation currencies higher.

Taiwan Semiconductor Manufacturing Co. paced gains for developing-nation technology companies and the benchmark Taiex Index climbed 1 percent. Country Garden Holdings Co. surged 4.5 percent in Hong Kong after saying it’s selling a 9.9 percent stake to Ping An Insurance Group Co. The Hang Seng China Enterprises Index extended a rally toward the highest level since July 2011. The ringgit and South Korea’s won strengthened at least 0.5 percent versus the dollar.

The MSCI Emerging Markets Index added 0.5 percent to 988.21 at 12:52 p.m. in Hong Kong, its fourth day of increases. The U.S. reports its monthly jobs data on Friday after weaker-than-estimated data on hiring and manufacturing on Wednesday fueled speculation that the world’s largest economy is slowing.

“Our base-case scenario is still for the Fed to raise rates in June. But now there’s a higher risk that it might be pushed to September,” said Daphne Roth, head of Asian equity research at ABN Amro Bank NV in Singapore. “The figures that you see are always a bit volatile and some traders might use that as the base for their trade.”

The developing-nation gauge has increased 3.3 percent this year and trades at 12 times 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index has risen 1.9 percent in 2015 and is valued at a multiple of 16.6.

Technology Stocks

All 10 industry groups in the MSCI Emerging Markets Index rose, led by technology companies. Taiwan Semiconductor added 2.1 percent, providing the biggest boost to the Taiex, which climbed the most since March 18. Shanghai Electric Group Co. surged 10 percent in Hong Kong, the largest gain in the developing-nation measure.

Country Garden, the Chinese real estate developer controlled by China’s second-richest woman Yang Huiyan, rallied the most since Jan. 2. The builder will sell 2.24 billion new shares to Ping An at HK$2.816 each.

The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 0.7 percent, its fourth day of increases. Industrial & Commercial Bank of China Ltd. climbed 1.6 percent, poised for the highest close since February 2013.

The Shanghai Composite Index added 0.2 percent, poised for the highest close since March 2008. Shanghai traders now have more than 1 trillion yuan ($161 billion) of borrowed cash riding on the world’s highest-flying stock market.

Thailand’s SET Index rose 0.7 percent, its fourth day of gains. The gauge is poised for the longest winning streak since a five-day advance through Jan. 13. Equity gauges in Pakistan and Sri Lanka added at least 0.6 percent. Many markets around the world are shut Friday for holidays, including Indonesia, India, the Philippines and Taiwan.

The ringgit strengthened for a third day, while the won headed for the highest close in a month. Indonesia’s rupiah appreciated 0.4 percent.

Bloomberg