Emerging Stocks Post Longest Rally in 14 Months After China Data – Bloomberg

Emerging-market stocks rose for a
ninth day, the longest stretch in more than 14 months, as data
showing expansion in Chinese service industries and U.S.
manufacturing bolstered confidence in the global economy.

OCI Co. (010060), South Korea’s biggest maker of polysilicon used in
solar panels, surged the most since January 2012 after prices of
the material advanced. Country Garden Holdings Co. (2007), the
developer controlled by China’s richest woman Yang Huiyan,
climbed to highest level in more than four years in Hong Kong
after it proposed to sell 10-year dollar notes. Hyundai Motor
Co. (005380), South Korea’s biggest automaker, dropped the most in two
months on speculation a strengthening won may weigh on profits.

About two shares gained for each that dropped in the MSCI
Emerging Markets Index (MXEF), which advanced less than 0.1 percent to
1,078.24 at 1:01 p.m. in Hong Kong. The gauge jumped 2.1 percent
to a 10-month high yesterday. China’s services industries grew
at the fastest pace in four months in December, data showed
today, after a bigger-than-estimated increase in U.S. factory
output. Commodities and stocks worldwide rallied yesterday after
U.S. lawmakers passed a bill undoing tax increases for most
households.

“Economic indicators in China and the U.S. are raising
optimism that the global economy is on a steady path of
recovery,” said Budsares Yunniyom, a fund manager at Asset Plus
Fund Management Co. in Bangkok, which manages about $800 million
of assets. “That may support further gains in emerging-market
equities as most investors are willing to raise holdings in
risky assets.”

Philippine Rally

The Philippine Stock Exchange Index (PCOMP) surged 1.6 percent, the
biggest gain among Asian benchmark gauges. The Hang Seng China
Enterprises Index of Chinese companies listed in Hong Kong rose
0.4 percent, poised for its highest close since August 2011.
Financial markets in China are closed today. South Korea’s Kospi
index (KOSPI) dropped 0.6 percent. The BSE India Sensitive Index (SENSEX)
advanced 0.2 percent. The Philippine peso touched its strongest
level in almost five years and Taiwan’s dollar rose to the
highest level in almost eight weeks.

A gauge of industrial companies rose 0.4 percent, the most
among the 10 industry groups in the MSCI Emerging Markets Index.
The developing-nations measure has climbed 2.2 percent this
year, outpacing a 2 percent increase by the MSCI World Index. (MXWO)
The emerging-markets index trades at 12.4 times estimated
earnings, compared with the MSCI World’s multiple of 14,
according to data compiled by Bloomberg.

China Data

A gauge of China’s non-manufacturing purchasing managers’
index rose to 56.1 in December from 55.6 in November, the
Beijing-based National Bureau of Statistics and China Federation
of Logistics and Purchasing said today. A reading above 50
indicates expansion.

OCI jumped 9.3 percent in Seoul, its third day of gains.
Prices of polysilicon climbed to $15.38 per kilo, its first
weekly increase in 11 months, from $15.35, SK Securities Co.
said in a report today, citing data from research firm PV
Insights. GCL-Poly Energy Holdings Ltd., a maker of solar-panel
wafers, surged 6.1 percent in Hong Kong.

Country Garden increased 5.1 percent, on course for the
highest close since August 2008. The company, based in China’s
southern Guangdong province, is offering 10-year notes to yield
about 8.25 percent, according to a person familiar with the
matter.

Chinese property companies are marketing U.S. dollar-
denominated bonds, ending a three-week pause in issuance from
the region. The cost of insuring corporate and sovereign bonds
from non-payment in Asia outside of Japan has fallen to the
lowest level since January 2011, prices from credit-default swap
traders show.

Auto Stocks

Hyundai slid 5.8 percent in Seoul, the most since Nov. 5.
Kia Motors Corp., its affiliate, dropped 3.7 percent. The Korean
won held near a 16-month high today. A stronger currency hurts
exporters because it cuts the value of repatriated earnings.

Hankook Tire Co. lost 7.1 percent in Seoul, the largest
decline in the MSCI Emerging Markets Index.

PT Bumi Resources, the biggest producer of power station
coal in Indonesia, sank 3.2 percent in Jakarta, the most since
Dec. 19. The company swung to a loss in the first nine months
after a $422 million charge on derivatives transactions, it said
in a statement yesterday.

To contact the reporter on this story:
Anuchit Nguyen in Bangkok at
anguyen@bloomberg.net

To contact the editor responsible for this story:
Darren Boey at
dboey@bloomberg.net