Emerging stocks head for longest weekly rally since January

EMERGING-MARKET stocks headed for the longest stretch of weekly gains since January on bets China will do more to bolster growth in the world’s second-biggest economy. Malaysia’s ringgit led developing-nation currencies higher. Train makers CSR Corp. and China CNR Corp. jumped 10 percent as the Shanghai Composite Index climbed to a seven-year high. Shanghai Fosun Pharmaceutical Group Co. soared to a record in Hong Kong on a plan to sell shares. Taiwan Semiconductor Manufacturing Co. sank 3.1 percent after forecasting second-quarter sales that missed estimates. The ringgit and South Korea’s won rose at least 0.4 percent versus the dollar. The MSCI Emerging Markets Index added 0.3 percent to 1,055.02 at 12:58 p.m. in Hong Kong, taking gains this week to 2 percent, set for a third week of advances. Speculation of more stimulus in China and bets that the Federal Reserve will delay raising interest rates have buoyed demand for riskier assets. The Shanghai Composite has jumped 82 percent in the past six months, the most among 93 benchmark indexes globally. “The China rally has significantly bolstered sentiment among other developing countries,” Sasikorn Charoensuwan, the head of research at Philip Securities (Thailand) Pcl in Bangkok, said by phone. “Most investors are still very bullish about further gains in Chinese stocks.” Stock Valuation The developing-nation gauge has risen 10 percent this year and trades at 12.7 times projected 12-month earnings, the most expensive since January 2010, data compiled by Bloomberg show. The MSCI World Index has gained 4.6 percent in 2015 and is valued at a multiple of 17. Nine out of 10 industry groups rose, led by industrial shares. CSR and CNR, which are in the process of merging, jumped to records. They have both surged 61 percent this week. The Shanghai Composite climbed 2.1 percent. Economists are predicting more cuts in interest rates after data this week showed the economy expanded 7 percent in the first quarter from a year earlier, the slowest pace in six years. Industrial production in March missed the lowest forecast in Bloomberg’s survey of 40 economists. Five of 11 professional money managers from mainland China, Hong Kong and Taiwan surveyed by Bloomberg from April 8 to 16 said they plan to boost holdings of A shares this quarter, while four will maintain positions and two will reduce their stakes. The Hang Seng China Enterprises Index gained 0.5 percent, set for the highest close since January 2008. Shanghai Fosun surged 21 percent. The company said it will raise as much as 5.8 billion yuan ($936 million) by selling shares to repay debt and replenish working capital. Taiwan Semiconductor sank the most since March 26. The company forecast sales at least 7.5 percent below analyst estimates as several mobile-phone customers cut chip orders. The benchmark Taiex Index declined 0.7 percent. The ringgit headed for a fourth weekly gain, the longest stretch of increases since July, while the won was poised for a fifth weekly advance.