Emerging-market stocks advance most since July on BRIC growth
Monday, 14 September 2009
NEW YORK, Sept. 13 (Bloomberg): Developing-nation stocks climbed, sending the MSCI Emerging Markets Index to its biggest weekly gain since July, on signs the economies of Brazil, Russia, India and China are emerging from the global recession faster than investors had predicted.
The MSCI index rose 0.8 per cent as of 5 p.m. in New York, bringing its gain this week to 4.8 per cent. Shares in the so- called BRIC nations led the advance as Brazil's gross domestic product expanded more than estimated in the second quarter and Russia's Finance Minister Alexei Kudrin said the economy will rebound this quarter. India's government signaled it will maintain stimulus spending and China reported growth in industrial production, lending and investment.
"If you're a BRICs investor it's a little bit of a perfect storm," said Uri Landesman, who oversees $2.5 billion at ING Investment Management Inc. in New York. "China is basically leading the way out of a global recession. Russia and Brazil are tied into global demand. And India had a very positive election result in May that made people more optimistic."
China Construction Bank Corp., the nation's second-biggest, rose 4.5 per cent today, while OAO Sberbank, Russia's largest lender, climbed 4.7 per cent. Tam SA, Brazil's biggest airline, increased 2.2 per cent. The International Monetary Fund predicts developing-nation economies will expand by 4.7 per cent next year, leading the global economy's recovery from its worst recession since World War II.
Brazil's GDP expanded 1.9 per cent in the second quarter from the previous quarter, the statistics agency said in Rio de Janeiro. Analysts expected growth of 1.7 per cent, according to the median estimate of 35 analysts surveyed by Bloomberg.
Output at China's factories rose 12.3 per cent from a year earlier, the most since August 2008, the statistics bureau said in Beijing today. The central banks reported local-currency new loans were at 410.4 billion yuan ($60 billion), up from 355.9 billion yuan in July. since Aug. 7, according to JPMorgan Chase & Co.'s EMBI+ Index.
Developing-economy equities, which plunged 54 per cent last year, have rebounded 88 per cent from the 2009 low reached on March 2. The rally drove MSCI's emerging-markets index to a valuation of 20 times reported earnings, the highest level in nine years.
Brazil's Bovespa index fell 0.3 per cent today, halting a five-day advance, amid concern that earnings prospects may not justify the gauge's 55 per cent rally this year. The Bovespa trades at 24.4 times reported profit, the highest in at least five years.
The MSCI index rose 0.8 per cent as of 5 p.m. in New York, bringing its gain this week to 4.8 per cent. Shares in the so- called BRIC nations led the advance as Brazil's gross domestic product expanded more than estimated in the second quarter and Russia's Finance Minister Alexei Kudrin said the economy will rebound this quarter. India's government signaled it will maintain stimulus spending and China reported growth in industrial production, lending and investment.
"If you're a BRICs investor it's a little bit of a perfect storm," said Uri Landesman, who oversees $2.5 billion at ING Investment Management Inc. in New York. "China is basically leading the way out of a global recession. Russia and Brazil are tied into global demand. And India had a very positive election result in May that made people more optimistic."
China Construction Bank Corp., the nation's second-biggest, rose 4.5 per cent today, while OAO Sberbank, Russia's largest lender, climbed 4.7 per cent. Tam SA, Brazil's biggest airline, increased 2.2 per cent. The International Monetary Fund predicts developing-nation economies will expand by 4.7 per cent next year, leading the global economy's recovery from its worst recession since World War II.
Brazil's GDP expanded 1.9 per cent in the second quarter from the previous quarter, the statistics agency said in Rio de Janeiro. Analysts expected growth of 1.7 per cent, according to the median estimate of 35 analysts surveyed by Bloomberg.
Output at China's factories rose 12.3 per cent from a year earlier, the most since August 2008, the statistics bureau said in Beijing today. The central banks reported local-currency new loans were at 410.4 billion yuan ($60 billion), up from 355.9 billion yuan in July. since Aug. 7, according to JPMorgan Chase & Co.'s EMBI+ Index.
Developing-economy equities, which plunged 54 per cent last year, have rebounded 88 per cent from the 2009 low reached on March 2. The rally drove MSCI's emerging-markets index to a valuation of 20 times reported earnings, the highest level in nine years.
Brazil's Bovespa index fell 0.3 per cent today, halting a five-day advance, amid concern that earnings prospects may not justify the gauge's 55 per cent rally this year. The Bovespa trades at 24.4 times reported profit, the highest in at least five years.