Abu Dhabi Shares Rise to 7-Month High on MSCI Upgrade Optimism

June 19, 2011, 10:27 AM EDT By Zahra Hankir

June 19 (Bloomberg) -- Abu Dhabi’s benchmark stock index advanced to the highest since November on speculation the United Arab Emirates will be upgraded to emerging market status by MSCI Inc. this week. Egypt’s stocks increased.

Abu Dhabi Commercial Bank PJSC climbed 1.9 percent after it said it will make a profit of about 1 billion dirhams ($272 million) from the sale of its stake in RHB Capital Bhd. Emirates Telecommunications Corp., the U.A.E.’s biggest phone company, gained for a 10th day, the longest winning streak since 2005. The ADX General Index climbed 0.5 percent to 2,775.44, the highest since Nov. 1, at the 2 p.m. close in Abu Dhabi. Dubai’s DFM General Index fell 0.1 percent after rising 2.8 percent last week.

MSCI, which classifies six of the seven Gulf markets as frontier, will decide on whether to raise the U.A.E. to emerging-market status on June 21. Bourses in the country said May 29 that market participants are ready to use an upgraded trading system, the so-called delivery-versus-payment, meeting one of the criteria for an upgrade at MSCI.

“In the coming days, all investors are eyeing the MSCI decision to include the U.A.E.” in the emerging market index, said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai. “All the positivity in the market is related to that.”

Citadel Gains

Exchanges in the U.A.E. may attract $1.5 billion if the nation secures the upgrade, Sebastien Henin, who helps oversee $110 million at The National Investor in Abu Dhabi, said in April. Frontier-market is a designation that applies to economies and financial markets that are less developed. Saudi Arabia’s market isn’t classified at MSCI. Qatar is also under review for a reclassification this week. The nation’s benchmark index gained 0.2 percent.

In North Africa, Egypt’s EGX30 Index advanced 1.6 percent to the highest level since January 27. Citadel Capital SAE climbed 4 percent to 6.32 Egyptian pounds, the highest since March 23.

Abraaj Capital Ltd., a Dubai-based private-equity firm, may hire Morgan Stanley as an adviser on the planned acquisition of a stake in the Egyptian private-equity company, two people familiar with the situation said June 16 after markets closed.

Abu Dhabi Commercial Bank added 1.9 percent to 3.29 dirhams, the highest since October 2008. The U.A.E.’s third- biggest bank by assets on June 17 agreed to sell its 24.9 percent stake in Malaysian lender RHB Capital to Abu Dhabi’s state-owned Aabar Investments PJSC for 10.80 ringgit a share, or about 5.9 billion ringgit ($1.9 billion).

Israel Bonds Fall

Etisalat rose 1.4 percent, the most since Feb. 8, to 11.10 dirhams.

The Bloomberg GCC 200 Index dropped 0.5 percent and Saudi Arabia’s Tadawul All Share Index retreated 0.9 percent. Bahrain’s BB All Share Index fell 0.2 percent and Oman’s benchmark stock index was little changed. Kuwait’s gauge slipped 0.4 percent.

Israel’s benchmark TA-25 stock index gained less than 0.1 percent and the Mimshal Shiklit government bond due January 2022 fell, pushing the yield three basis points higher to 5.38 percent.

Delivery-versus-payment is a securities industry procedure in which payment for a security must be made when the security is delivered. Usually, the payment is made to a bank, which in turn pays for the security.

--Editors: Claudia Maedler, Shanthy Nambiar

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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Asian Stocks Climb on Optimism Over Greece Aid; Sony Advances

May 31, 2011, 7:03 AM EDT By Jonathan Burgos

May 31 (Bloomberg) -- Asian stocks rose, with the regional benchmark index paring the biggest monthly decline in a year, amid speculation European officials will pledge more financial aid to Greece.

Cosco Pacific Ltd., the Hong Kong-based operator of container facilities in Greece, climbed 3.8 percent. Sony Corp., the maker of PlayStation gaming consoles that counts Europe as its biggest market outside of Japan, gained 1.9 percent in Tokyo. Hyundai Heavy Industries Co., the world’s biggest shipbuilder, surged 11 percent in Seoul after winning an order for two liquefied natural gas tankers.

The MSCI Asia Pacific Index gained 1.4 percent to 136.11 as of 7:24 p.m. in Tokyo, the highest close since May 13. More than six stocks advanced for each that fell in the gauge, which last week completed its longest string of weekly losses in two years as concern deepened over Europe’s debt crisis and amid speculation a slowing global recovery will crimp earnings.

“Talk of additional aid for Greece has given investors some relief for now,” said Andrew Pease, Sydney-based senior investment strategist for the Asia-Pacific region at Russell Investment Group. “These are just temporary solutions. That’s not a sustainable solution. Asian markets, particularly China, look genuinely cheap.”

Japan’s Nikkei 225 Stock Average climbed 2 percent, the steepest gain since March 30. Stocks extended gains today after a report showed Japan’s industrial production, disrupted by the March disaster, may rebound to near pre-earthquake levels by next month. The data also showed output grew less than economists expected last month.

India Economic Growth

“On the level of individual firms we’ve had a lot of anecdotal evidence that supply chains were recovering, but today’s figures are significant because they confirm that production is coming back,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $104 billion.

India’s Sensitive Index advanced 1.5 percent. The nation’s economic growth eased to 7.8 percent in the three months to March 31 as manufacturing and services moderated, a slowdown that has yet to curb pressure for more increases in interest rates to damp inflation.

South Korea’s Kospi Index advanced 2.3 percent. Australia’s S&P/ASX 20 Index gained 0.9 percent. Hong Kong’s Hang Seng Index increased 2.2 percent, while China’s Shanghai Composite Index added 1.4 percent, its first increase in nine days.

European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the euro-area finance ministers’ group. Greek Prime Minister George Papandreou said on May 27 he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties.

‘Relief to Exporters’

Cosco Pacific advanced 3.8 percent to HK$15.42 in Hong Kong. Samsung Electronics Co., the world’s largest maker of televisions that gets one-fifth of its sales from Europe, climbed 2 percent to 902,000 won in Seoul. Sony, Japan’s biggest exporter of consumer electronics, rose 1.9 percent to 2,163 yen in Tokyo.

Japanese exporters also advanced as the euro rose against the yen, boosting the value of repatriated sales from Europe. Toyota Motor Co., the world’s biggest carmaker, gained 2.1 percent to 3,400 yen. Mazda Motor Corp., the Japanese carmaker most dependent on European sales, jumped 1.5 percent to 205 yen. Canon Inc., the camera maker whose largest source of revenue is Europe, advanced 2.1 percent to 3,905 yen.

Debt Crisis

“Even though the euro has weakened in the midst of Greece’s debt crisis, the currency is having a little comeback and that’s given some relief to exporter shares,” said Daiwa’s Nagano.

The MSCI Asia Pacific Index lost 2.5 percent this year through yesterday, compared with gains of 5.8 percent by the S&P 500 and 1.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 13.4 times estimated earnings on average, the same as for the S&P 500, and compared with 11.1 times for the Stoxx 600.

Hyundai Heavy surged 11 percent to 505,000 won in Seoul, the biggest advance on the MSCI Asia Pacific Index. The company won an order for two liquefied natural gas tankers from Dynagas Ltd. of Greece.

Hyundai Engineering & Construction Co., a South Korean builder, increased 2.1 percent to 84,000 won. The company said it received orders worth $230 million from Singapore and Iraq.

Hanwha Chemical Corp., South Korea’s fourth-largest maker of plastic resins by sales, jumped 9.6 percent to 48,950 won after Samsung Securities raised its share-price forecast to 59,500 won from 41,000 won and maintained its “buy” rating.

‘Stock Valuations’

“While stock valuations are looking attractive, we’re still cautious as global growth is slowing,” said Diane Lin, a Sydney-based fund manager at Pengana Capital Ltd., which has about $1 billion of assets. “Europe’s situation is still very difficult.”

Futures on the Standard & Poor’s 500 Index rose 1 percent today. U.S. markets were closed yesterday for a public holiday.

U.S. economic data to be released this week are expected to show further evidence that growth in the world’s biggest economy is slowing. Nonfarm payrolls are expected to rise by 185,000 workers in May, less than the 244,000 increase in April, according to the median forecast in a Bloomberg News survey before Labor Department figures to be released on June 3. Another report may show factory orders grew at the slowest pace in seven months.

Renewable Energy

Renewable-energy companies rallied after German Chancellor Angela Merkel’s coalition endorsed yesterday a plan to close all of Germany’s atomic-power plants by 2022. The country will double energy output from renewable sources by 2020, Merkel said yesterday at a press conference in Berlin.

Taewoong Co., a South Korean maker of parts for wind power plants, surged 8.3 percent to 44,400 won in Seoul. OCI Co., the nation’s biggest maker of polysilicon that’s used in solar panels, jumped 9 percent to 493,000 won. GCL-Poly Energy Holdings Ltd., China’s largest maker of the same material, climbed 5.3 percent to HK$4.17 in Hong Kong.

--Editor: Reinie Booysen

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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U.S. Stocks Retreat as Housing, LEI Reports Temper Optimism

May 19, 2011, 1:25 PM EDT By Rita Nazareth

May 19 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a second straight day, as initial jobless claims fell more than forecast and higher-than- estimated earnings bolstered optimism.

PetSmart Inc., a pet-store chain, and Dollar Tree Inc., a discount retailer, added at least 7.1 percent after reporting earnings that beat estimates. Intel Corp., KLA-Tencor Corp. and Applied Materials Inc. slumped more than 1.5 percent as Goldman Sachs Group Inc. cut their ratings, citing increased competition from tablet computers and excess supply.

The S&P 500 rose 0.1 percent to 1,342.38 at 1 p.m. in New York. The index yesterday posted the biggest gain in three weeks. The Dow Jones Industrial Average advanced 33.15 points, or 0.3 percent, to 12,593.33 today.

“The rally will accelerate,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees $358.2 billion. “We had an excellent jobless claims number, which tells me that we’re going to see a solid jobs report. The Fed has indicated that it will be vigilant and watching the pace of jobs recovery. I don’t believe we’ll see a QE3. Still, we’ll continue with easy policy.”

The S&P 500 yesterday snapped a three-day drop amid higher- than-estimated earnings and as the Federal Reserve signaled continued low interest rates. The index rose 6.6 percent in 2011 through yesterday as profits at 72 percent of the 450 companies that reported results since April 11 beat the average analyst projection, according to data compiled by Bloomberg.

Jobless Claims

Stock futures extended gains before the open of regular trading as a government report showed that fewer Americans than forecast filed applications for unemployment benefits last week, making it more likely that the surge in April was caused by temporary events rather than a deterioration in the labor market.

Jobless claims declined by 29,000 to 409,000 in the week ended May 14, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 420,000. The number of applications were the lowest in a month.

Stocks briefly turned lower after a report showed that sales of existing homes unexpectedly declined in April, indicating the industry is struggling to gain traction as the economy expands. Separate figures showed that manufacturing in the Philadelphia unexpectedly grew in May at the slowest pace in seven months, a sign the world’s largest economy may get less of a boost from the industry that led it out of the recession.

Earnings Season

PetSmart added 7.1 percent to $45.50. The pet-store chain said profit in the first-quarter was 61 cents a share, exceeding the average analyst estimate of 55 cents.

Dollar Tree gained 3.8 percent to $63.66. The discount retailer reported first-quarter profit of 82 cents a share. On average, the analysts surveyed by Bloomberg estimated earnings of 75 cents.

Intel slumped 1.8 percent to $23.45. Goldman Sachs lowered its rating on the world’s largest chipmaker, to “sell” from “neutral” yesterday. The bank said its analysis shows that processors out-shipped PCs by about 10 percent in the first quarter. It said Intel’s longer-term threat is from tablets such as Apple Inc.’s iPad, which run on ARM-based chips, eating into the PC market.

Chip Orders

Goldman Sachs downgraded KLA to “sell” from “neutral,” citing its vulnerability to weakness at Intel. Applied Materials was cut to “neutral” from “buy” because of lower 2012 capital spending by chip makers. The bank said orders for semiconductors are likely to decline in the next six quarters.

KLA dropped 4.1 percent to $41.08, while Applied Materials slid 1.5 percent to $14.28.

LinkedIn Corp., the first major U.S. social-media company to sell shares to the public, rallied 133 percent to $104.85 in its trading debut. The company raised $352.8 million in an initial public offering after pricing its shares at $45 each, at the top end of the range. At the IPO price, the company has a market value of $4.25 billion, or 11.3 times projected annual sales. That compares with 13.8 for Facebook Inc. and 8.3 for Salesforce.com Inc.

--Editors: Joanna Ossinger, Michael Regan

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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