13/08/2016 10:29 AST

Emerging stocks hit new one-year highs yesterday and headed for their fifth straight week of gains, as below-forecast Chinese data stirred expectations that Beijing would add to the stimulus largesse of developed countries’ central banks.

MSCI’s emerging equity index was lifted by Hong Kong shares surging to nine-month highs while mainland Chinese markets firmed 1.6-1.9% after retail sales, industrial output and investment data all underwhelmed, leading to bets on monetary policy easing in the world’s No 2 economy.

The data also pushed Chinese 10-year treasury yields to 6-1/2-year lows.

An overnight oil price jump and a record Wall Street close offered more tailwinds to the MSCI index which has risen for five weeks straight and is up almost 3% so far this week.

“The positive momentum for emerging markets is premised on positive expectations regarding more stimulus in G10 — overall that’s the theme that supports emerging markets and the appetite for risky assets,” said Roxanna Hulea, a strategist at Societe Generale.

While US data has been relatively firm and retail sales data is awaited later, most analysts do not expect significant policy tightening there even in 2017.

As a result, big gains have also come on emerging dollar bonds where yield spreads over Treasuries have fallen about 10 basis points this week to a 13-month low.

However the bond rally has bypassed Ukraine this week amid renewed tensions with Russia over Crimea, which the Kremlin annexed in 2014.

Russia’s navy has announced war games in the Black Sea, a day after President Vladimir Putin accused Ukraine of trying to provoke a conflict in the region.

Ukraine denies the allegations, saying the build-up of Russian military on its border could reflect “very bad intentions”.

The country’s restructured dollar bonds were marked slightly lower after falling 1-1.5 cents on Thursday while Warsaw-listed Ukrainian shares fell 2.5% on Thursday and were set to end a four-week winning streak.

Ukraine’s hryvnia currency weakened 0.6% to a seven week low against the dollar.

Russia’s rouble slipped half a per cent against the dollar, though stocks rose almost 1% in line with oil, and while credit default swaps inched off mid-2014 highs hit earlier in the week, Hulea said she did not expect major market losses.

“For more than a year now Russia has been a consensus trade in terms of people being bullish.

So we need to see something really happening rather than a brewing noise in the background, before we see a reversal in appetite towards Russia,” she added.

In central Europe, currencies were firm, with the Polish zloty hovering near four-month highs against the euro and the Hungarian forint at 3-1/2 month highs.

Data showed robust economic growth across the region in the second quarter with Hungary accelerating to 2.6 % and Romania to 6%, while Poland grew 3.1%.

South African markets were weaker as investors pulled the rand and local bonds back from multi-month highs in anticipation of stronger US data.


Reuters

Ticker Price Volume
QNBK 123.10 227,432
SABIC 98.20 3,913,489
BURUJ 31.63 334,647
TAWUNIYA 97.08 74,172
PETRORABIGH 13.11 1,377,870
STC 68.61 286,754
RJHI 63.93 2,568,691
Index Closing Change
NIKKEI 225 21,336.12 80.56 (0.37%)
DAX 12,995.06 -8.64 (-0.06%)
S&P 500 2,559.36 1.72 (0.06%)
Egypt expects to renew financing deal with global banks

18/10/2017

Egyptian Finance Minister Amr El-Garhy said on Monday he expects a financing agreement with a consortium of global banks will be renewed for another year with the aim to boost foreign reserves while

Arab News

Maybank Islamic named the Best Global Islamic Financial Institution

17/10/2017

Maybank Islamic Bhd has emerged as the Best Global Islamic Financial Institution, its first ever, at the Global Finance Awards 2017.

It was also recognised as the Best Global Sukuk Bank an

New Straits Times

China shares fall, market shrugs off upbeat economic growth forecast

17/10/2017

China’s major share indexes fell on Monday as a surprisingly strong central bank economic growth projection failed to spur buying while tech stocks slumped after disappointing profit forecasts.

Gulfnews

Pakistan turns to Islamic finance market for support

15/10/2017

Pakistan's first international bond in a year is likely to be well received by investors, despite deepening concerns about the country's macroeconomic stability and deteriorating political risk profi

Nikkei Asian Review

US moves closer to EU position on taxing tech giants

15/10/2017

Washington is softening its position on European plans to impose taxes on US tech giants such as Apple and Google, officials said this week.

The evolving attitude in recent days would mark a

Arab News