EMERGING MARKETS-Malaysia, Saudi stocks fall in gloomy emerging markets

  • Reuters
  • Stock Market News
EMERGING MARKETS-Malaysia, Saudi stocks fall in gloomy emerging markets

By Sujata Rao
LONDON, April 26 (Reuters) - Emerging equities approached
two-week lows on Tuesday pressured by sluggish economic growth
and fears of default in Malaysia while Saudi shares pulled back
from the 3-1/2 month highs hit after the kingdom unveiled its
reform plan on Monday.
Investors were also starting to retreat to the sidelines
before crucial central bank meetings in Japan and the United
States. With U.S. growth looking increasingly anaemic, few
expect the Federal Reserve to make a move this week though it
could signal whether a June rate rise is likely.
While dovish central banks are good news for emerging
markets, their own economies show few signs of recovery. South
Korean growth halved in the first quarter to 0.4 percent while
Taiwanese growth is seen contracting
MSCI's emerging equity index .MSCIEF was flat, recouping
earlier losses as European bourses opened higher and helped by
half percent gains in Hong Kong and mainland China .HSI
"This EM rally has been effectively one-way traffic since
late January for equities and mid-February for FX and credit so
a little pause and profit-taking isn't that surprising after
quite a strong run-up," UBS strategist Manik Narain said.
There are also fears a missed $50 million coupon payment by
state fund 1Malaysia Development Bhd (1MDB) TERRN.UL could
spill over to the sovereign after triggering cross defaults on
two other bonds
Malaysian stocks fell 1 percent .KLSE while the ringgit
slipped 0.8 percent to a one-week low versus the dollar MYR= .
Societe Generale (PA: SOGN ) advised clients to sell ringgit in favour
of the Indonesian rupiah IDR= , noting "political and policy
risks are underpriced.....including whether there will be a
credible successor to (central bank) governor Zeti, to possible
deterioration in the 1MDB saga."
Meanwhile, an oil price decline took a toll on Russian and
Gulf assets, with Saudi stocks in particular falling 1.3 percent
after surging 2.5 percent on Monday, its biggest one-day rise in
six weeks .TASI
Investors have welcomed the reform plan but remain sceptical
about implementation and many took profits on the stocks which
had gained the most. Financial Group Samba 1090.SE , for
instance, fell 5 percent after Monday's 9 percent jump.
In eastern Europe, the forint pulled back 0.2 percent to
two-week lows before a central bank meeting that is expected to
cut rates by 15 basis points EURHUF= The Polish
zloty, however, pulled back slightly from one-month lows
Russian assets were under pressure from oil prices with
stocks down 1 percent and the rouble pulling further away from
5-1/2 month highs hit earlier in the week .MCX RUB= .
In bond news, Abu Dhabi garnered a $17.5 billion-plus book
for its $5 billion two-part bond, selling the tranches at 80 and
125 basis points (bps) over Treasuries Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley (NYSE: MS )
Emrg Mkt Indx .MSCIEF 839.91 +0.71 +0.08 +5.76

Czech Rep .PX 908.21 -4.14 -0.45 -5.03

Poland .WIG20 1921.36 -3.98 -0.21 +3.35

Hungary .BUX 26841.92 -62.69 -0.23 +12.21

Romania .BETI 6587.06 +20.81 +0.32 -5.96

Greece .ATG 591.40 -6.16 -1.03 -6.33

Russia .IRTS 918.34 -9.32 -1.00 +21.31

South Africa /.JTOPI 46600.37 +17.64 +0.04 +1.75

Turkey .XU100 85364.30 +254.93 +0.30 +19.01

China .SSEC 2965.40 +18.73 +0.64 -16.21

India .BSESN 26010.86 +331.93 +1.29 -0.41

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2016

Czech Rep EURCZK= 27.02 27.01 -0.03 -0.07

Poland EURPLN= 4.39 4.41 +0.35 -3.07

Hungary EURHUF= 311.85 311.42 -0.14 +0.89

Romania EURRON= 4.48 4.47 -0.12 +0.91

Serbia EURRSD= 122.57 122.66 +0.07 -0.90

Russia RUB= 66.49 66.53 +0.06 +9.72

Kazakhstan KZT= 333.09 333.46 +0.11 +2.22

Ukraine UAH= 25.50 25.30 -0.78 -6.07

South Africa ZAR= 14.48 14.44 -0.27 +6.76

Kenya KES= 101.10 101.10 -0.00 +1.09

Israel ILS= 3.76 3.76 -0.12 +3.35

Turkey TRY= 2.83 2.84 +0.37 +2.97

China CNY= 6.49 6.49 -0.04 -0.01

India INR= 66.55 66.67 +0.18 -0.53

Brazil BRL= 3.55 3.55 +0.04 +11.44

Mexico MXN= 17.53 17.55 +0.14 -2.03

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 408 1 .07 7 14.00 1

All data taken from Reuters at #N/A *The record could not be
found GMT.
Currency percent change calculated from the daily U.S.

close at 2130 GMT.

For GRAPHIC on emerging market FX performance 2016, see http://link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2016, see http://link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2016, see http://link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2016, see http://link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB )

(additional reporting by Claire Milhench, Editing by Ed Osmond)

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