Azernews.Az

By Bloomberg

Emerging-market stocks rose from the lowest level since 2011 and currencies climbed after China’s central bank eased concern about a disorderly devaluation of the yuan.

Tencent Holdings Ltd. surged 7 percent in Hong Kong after China’s second-largest Internet company posted record quarterly profit. The Jakarta Composite Index jumped 2.2 percent to halt a five-day slump, while Malaysian equities advanced from a 2012 low. South Korea’s won strengthened 1.4 percent and the ringgit rose from the biggest drop since 1998. China’s Shanghai Composite Index gained 1.3 percent.

The MSCI Emerging Markets Index added 0.6 percent to 866.72 at 2:37 p.m. in Hong Kong, halting a two-day loss. The gauge entered a bear market earlier this week after falling more than 20 percent from a September peak. China’s move on Tuesday to devalue the yuan triggered a sell-off in global markets and raised bets that developing nations will weaken their currencies to stay competitive. The People’s Bank of China said it supports a strong, stable yuan in the long term.

“The yuan devaluation has given rise to a need to re- evaluate our portfolio mix,” Geoffrey Ng, director at Fortress Capital Asset Management Sdn. in Kuala Lumpur, which oversees about 1 billion ringgit ($250 million), said by phone. “We are picking up stocks which potentially would benefit from weaker currencies, and selling down some.”

Equilibrium Level

There’s no basis for depreciation to persist and the central bank is capable of keeping the currency at an equilibrium level, PBOC Assistant Governor Zhang Xiaohui said Thursday at a briefing in Beijing. The PBOC will act “when the market’s volatility is excessive, when the market begins behaving like a herd of sheep,” Deputy Governor Yi Gang said.

The yuan slid 0.4 percent in Shanghai after a two-day loss of 2.8 percent following a devaluation on Tuesday.

MSCI’s developing-nation stock index has fallen 9.4 percent this year and trades at 11 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has added 1.8 percent and is valued at a multiple of 16.2.

Nine out of 10 industry groups in the emerging-market index rose, led by a 1.8 percent gain in technology shares. Tencent surged the most since July 9. The company posted quarterly profit that beat estimates after it earned more money from advertisements in games and video-streaming services.

The Jakarta Composite Index climbed the most since March 2014 as the rupiah rebounded from the weakest level since 1998. The FTSE Bursa Malaysia KLCI Index advanced 1 percent, halting a five-day drop. The ringgit strengthened 0.5 percent, its first gain in seven days.

Malaysia’s gross domestic product rose 4.9 percent last quarter from a year earlier, more than the 4.5 percent median estimate in a Bloomberg survey, data showed on Thursday. That’s still the slowest since the third quarter of 2013.

The Shanghai Composite Index climbed for the first time in three days and Hong Kong’s Hang Seng China Enterprises Index added 0.6 percent. The Philippine Stock Exchange Index fell 1.1 percent and the peso rose 0.1 percent before an interest-rate decision. Thailand’s SET Index lost 1.4 percent.