• Saturday, May 18, 2024
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Most emerging-market stocks rise as valuations reach 2005 low


 Emerging-market stocks advanced led by Indian companies after valuations reached the lowest level versus developed markets since 2005, and lower energy prices boosted transportation shares.

Asset managers imagine that this is going to be a significant buying opportunity for emerging-market asset prices.

The MSCI Emerging Markets Index added 0.2 percent to 1005.04 by 12pm Tuesday in London, erasing an earlier decline of as much as 0.9 percent.

The gauge is valued at 1.5 times net assets, compared with 1.9 for the MSCI World Index, the biggest gap since August 2005, according to data compiled by Bloomberg. Indian stocks gained the most since September 14 as the oil price declined for a fourth day in New York.

“Where there are extremes, there are opportunities and some investors are using this as a good time to get involved in some of the cyclical plays,” Stan Shamu, a market strategist at IG Markets Limited, told Bloomberg.

The emerging-markets index slid 4.8 percent this year as government intervention in the biggest developing nations curbed profits and economic growth slowed from South Korea to Poland. Brazil’s Bovespa Index led declines among major emerging markets in 2013 with a 13 percent slump. The Hang Seng China Enterprises Index is down 8.8 percent, while Russia’s Micex Index retreated 7.7 percent. The MSCI World index has gained 6.6 percent this year.