• Monday, February 26, 2024
businessday logo

BusinessDay

Emerging-market stocks rise on Turkey rally

businessday-icon

Emerging-market stocks advanced, led by the biggest rally in Turkey’s benchmark index in more than three months, amid speculation political tension in the country may ease.

The lira strengthened, while Russia’s ruble declined.

Turkish stocks climbed 4.2 percent, rebounding from a 14 percent tumble the previous two weeks spurred by a corruption probe embroiling Turkish Prime Minister Recep Tayyip Erdogan’s government.

The lira rose 0.8 percent as the central bank said it will sell at least $600 million. The ruble weakened 0.6 percent after suicide bombers killed at least 30 in the Southern city of Volgograd and as a seasonal transfer of state budget funds to commercial banks raised the supply of local currency.

The MSCI Emerging Markets Index added 0.4 percent to 1,001.42 as of 12:44pm in London.

The gauge is valued at 10.5 times projected earnings for the next 12 months, a 29 percent discount versus the MSCI World Index, the biggest gap in five years.

Investors are betting on a “calmer period” in Turkish politics, according to Emre Balkeser, the head of sales and trading at Garanti Yatirim Menkul Kiymetler AS.

“With emerging-market equities having had a very weak year, in particular compared to developed-market equities, I would assess the price movement over the last couple of days as picking up cheap paper, and Turkey in particular buying into bombed out equity,” Michael Ganske, head of emerging markets at Rogge Global Partners plc in London, said.

Nine of the 10 industry groups in the MSCI Emerging Markets Index rose. The measure has lost 5.1 percent this year, compared with a gain of 24 percent for the MSCI