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Emerging stocks rise as Samsung rallies while energy shares drop

27 November 2014 13:40 (UTC+04:00)
Emerging stocks rise as Samsung rallies while energy shares drop

By Bloomberg

Emerging-market stocks rose to a four-week high as Samsung Electronics Co. rallied on a share buyback and investors bet China is loosening monetary policy further. Energy-related shares declined with oil.

Samsung Electronics surged 5.3 percent in Seoul. China’s Shanghai Composite Index advanced to a 2011 high. Philippine equities slid 0.8 percent after data showed economic growth missed estimates. Bumi Armada Bhd. and SapuraKencana Petroleum Bhd. tumbled more than 4 percent in Kuala Lumpur. South Korea’s won strengthened 0.8 percent versus the dollar, poised for its longest winning streak since July.

The MSCI Emerging Markets Index added 0.2 percent to 1,014.25 at 1:34 p.m. in Hong Kong. Samsung said it will buy back $2 billion of shares. China’s central bank refrained from selling repurchase agreements for the first time since July as a report showed industrial companies’ profits fell by the most in two years. Oil slid to a four-year low amid concern OPEC won’t agree to cut output at today’s meeting.

“Anytime you have buybacks, it’s a positive signal and it will drive stock prices, while the news on China also boosted market sentiment,” Tony X. Diep, managing director at Indochina Capital Corp., said by phone from Ho Chi Minh City. “Still, investors are a little bit cautious ahead of the OPEC meeting.”

The emerging-markets gauge has increased 1.2 percent this year and trades at 11.3 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 5.1 percent this year and is valued at a multiple of 15.5.


Samsung Gains


Four out of 10 industry groups in the MSCI Emerging Markets Index rose, led by technology shares. Samsung Electronics surged the most since Oct. 31. The company said it will buy back shares after its parent group announced the sale of stakes in chemicals and defense businesses in the chaebol’s biggest restructuring. The Kospi rose 0.1 percent and the won strengthened for a fifth day versus the dollar.

The Shanghai Composite increased 0.5 percent, its sixth day of gains. China Life Insurance Co. rose 2.9 percent to the highest level since February 2013. The People’s Bank of China didn’t conduct any open-market operations in today’s auction window, after cutting interest rates last week for the first time since 2012. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.1 percent.

Telecommunications and energy shares slid the most in the developing nation gauge. SapuraKencana had its steepest loss since Oct. 16, dragging down the FTSE Bursa Malaysia KLCI Index, which fell 0.5 percent. Bumi Armada, an offshore oil and gas services provider, sank to a record low.

Representatives from the 12 OPEC countries meet today in Vienna, with oil prices mired in a bear market amid concerns over a global glut. A Bloomberg News survey showed 20 analysts were evenly divided on whether OPEC will reduce supply to support prices.

The Philippine Stock Exchange Index fell the most in three weeks. Data showed gross domestic product increased 5.3 percent in the three months through September from a year earlier, the weakest pace since 2011. The median estimate in a Bloomberg survey was for 6.5 percent growth.

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