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Emerging Stocks Rise to 3-Week High on Metal Gain, Dubai Report |
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February 23rd, 2010 |
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Developing-nation stocks gained for a second day, sending the MSCI Emerging Markets Index to an almost three-week high, as rising metals lifted raw-material companies and investors speculated Dubai World will receive more bailout funds.
The MSCI gauge advanced 0.5 percent to 947.71 at 8:50 a.m. in London, extending yesterday’s 1.1 percent rally and heading for the highest closing level since Feb. 3.
Asian stocks rallied after the Al-Ittihad newspaper reported that Dubai’s government allocated 18.3 billion dirhams ($5 billion) to Dubai World. The report didn’t reflect a new development, a government spokeswoman said. China’s Zijin Mining Group Co. and Gold Fields Ltd. in South Africa rose as a weaker dollar boosted copper and gold prices. South Africa’s rand gained 0.6 percent versus the dollar amid speculation Federal Reserve Chairman Ben S. Bernanke will tell Congress tomorrow interest rates will remain near zero.
“Growth is recovering, but it’s not recovering too fast to have the major central banks tighten monetary policy,” Rajeev de Mello, the Singapore-based head of Asian investment at Western Asset Management Co., said in an interview on Bloomberg Television. “We don’t think that the Fed’s going to tighten until very late this year, if at all.”
The extra yield investors demand to own emerging-market debt over U.S. Treasuries declined three basis points to 2.87 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.
Abu Dhabi lent Dubai $10 billion in December to help Dubai World, the state-owned holding company, avoid defaulting on a $4.1 billion bond payment. The rest of the money will cover Dubai World’s interest and operating costs until the company reaches a standstill agreement with its creditors, Dubai’s government said in a statement on Dec. 14.
The Dubai Financial Market General Index of shares fell 1.7 percent today.
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Source: www.businessweek.com |
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