PetroChina Co. and China Coal Energy Co. climbed at least 5.6 percent in Hong Kong. OAO Sberbank advanced for the third time this week in Moscow and the ruble appreciated 3.2 percent against the dollar as oil, Russia’s main export earner, rallied as much as 3.3 percent in London. The real climbed 0.4 percent. Ukrainian Eurobonds advanced as creditors said they have a plan to avoid a writedown in debt restructuring.
The MSCI Emerging Markets Index added 0.9 percent to 1,030.51 by 1:54 p.m. in London, bringing its nine-day increase to 7.6 percent. Hong Kong-traded mainland equities surged to the highest since 2010 on speculation that the market will catch up with its world-beating Chinese counterpart. Gains in the price of oil boost earnings prospects of exporters including Russia, Saudi Arabia and Nigeria.
“Commodities, generally will continue to be in demand” as the oil price will probably rise gradually through year-end, Mark Mobius, the chairman of Templeton Emerging Markets Group, told Bloomberg TV on Thursday. “We’ve been buying H-shares, but very cautiously. They’ve been dragged up by the A-share bull market.”
H-shares refer to mainland Chinese shares trading in the Hang Seng China Enterprises Index, which rallied 2.6 percent on Thursday. The Shanghai Composite Index, which includes A-shares, has jumped 22 percent this year, compared with 15 percent for the Hang Seng.
Nine out of 10 industry groups in the MSCI Emerging Markets Index advanced on Thursday, led by energy and financial companies. PetroChina climbed to a six-month high and China Coal rose for a fourth day.
The energy sub-index jumped 1.9 percent to the strongest level since Nov. 28 as Brent crude increased to as high as $57.40 a barrel. The dollar-denominated RTS Index in Moscow jumped 1.5 percent and Saudi Arabia’s equity gauge added 1.1 percent, while shares in Nigeria, Africa’s largest oil producer, increased 1.2 percent.
Templeton is “holding on to oil stocks that are diversified,” Mobius said. “They are not only in exploration and production, they are also in retailing, refining and so on.”
Crude’s advance boosted the ruble, making it the biggest gainer among 24 emerging markets tracked by Bloomberg. Russia’s currency climbed 12 percent in seven days, the longest winning streak since September 2013. A gauge tracking developing-nation currencies strengthened 0.3 percent to the highest since Feb. 26.
Ukraine’s $2.6 billion of bonds due July 2017 climbed 1.55 cents to a three-week high of 43.02 cents on the dollar. A committee comprising five of the largest creditors in the eastern European nation’s Eurobonds said it was working on a proposal to restructure “without any principal debt reductions.”
The MSCI Emerging Markets Index has gained 7.8 percent this year and trades at 12.4 times projected 12-month earnings, the most expensive since April 2010, data compiled by Bloomberg show. The MSCI World Index has risen 3.5 percent in 2015 and is valued at a multiple of 16.8.
India’s S&P BSE Sensex Index added 0.6 percent, its fifth day of gains. Moody’s Investors Service upgraded the country’s rating outlook to positive, citing improving economic prospects.
The Shanghai Composite retreated 0.9 percent after surging 6.6 percent in the previous five days. Mainland Chinese investors used up their entire quota to buy Hong Kong stocks through the city’s Shanghai exchange link.
Hong Kong shares are rallying after valuation discounts in the city reached the most extreme levels since 2011 and mainland authorities made it easier for domestic funds to use the cross-border bourse link. The Shanghai Composite trades at 15.1 estimated profit for the next 12 months, compared with 9.3 for the H-shares gauge, data compiled by Bloomberg show.