EMERGING MARKETS-Bulgaria stocks jump, Argentina eyed as EM defies H1 doubters

lunes 30 de junio de 2014 07:50 GYT
 

* EM stocks head for near 5 pct gain in H1
    * Bulgarian bank shares jump after EU aid
    * Russia stocks, rouble slide ahead of ceasefire expiry
    * Offshore funds lift won, intervention caps gains

    By Marc Jones
    LONDON, June 30 (Reuters) - Emerging market stocks and many
currencies were heading for their strongest first half in five
years on Monday, defying the consensus call at the start of the
year that U.S. stimulus cuts would deter buyers.
    MSCI's emerging market share index was up 0.45
percent and eyeing its highest level in over a year, while  
South Korea's won, at its strongest in nearly 6
years, led a pack of Asian currencies bucking calls for them to
weaken.
    In Europe, Bulgarian bank stocks jumped sharply after the
European Commission doused fears about their finances as it
approved a $2 billion (3.3 billion lev) credit line.
  
    Shares in First Investment Bank rose by 25 percent,
recouping almost all of the ground lost last week, though 
Bulgarians were still queuing outside local banks to withdraw
their money. 
    "We see a recovery of trust in the market. The pick-up in
the share price of First Investment Bank reflects a necessary
correction after last week's plunge and is also a result of the
country's resolve to support the banking system," a trader with
Sofia-based Karoll Brokerage told Reuters.    
    Emerging market attention was also turning to a bond payment
deadline in Argentina as it struggles to avoid a default on its
previously restructured debt. 
    Argentina has deposited the next payment into a holding
account, but a U.S. federal court has ordered it can't go
through until holdout bondholders are paid in full. 
    Tensions between Ukraine and Russia also simmered as the
expiry of a ceasefire between Ukraine government forces and
pro-Russian separatists neared. 
    Russia's rouble was down half a percent and Moscow
stocks were down almost 1.5 percent with bonds weak too.
    Monday's ceasefire deadline comes in tandem with one set by
EU leaders considering new sanctions against Russia.
    "There are still significant uncertainties about
Russia/Ukraine," said Manik Narain, an emerging market
strategist at UBS. "The ceasefire is due to end this evening and
with renewed reports of violence over the weekend the threat of
broader, sectoral sections on Russia still exists."
    
    
    ASIAN GAINS
    Indonesia's rupiah outperformed for the day on
expectations that the country could return to a trade surplus in
May. 
    The dollar struggled to get off a one-month low
against a basket of six major currencies as softer U.S. economic
indicators cemented expectations that the Fed may not hurry to
hike interest rates, driving more funds to Asia.
    However, some analysts doubted whether regional currencies
would strengthen much further in the second half, given the risk
that a stronger recovery in the world's top economy could prompt
the U.S. central bank to tighten policy faster.
    Investors are awaiting June U.S. jobs data on Thursday,  a
day earlier than usual because of the July 4 public holiday.
Analysts polled by Reuters on average expect a non-farm payrolls
gain of 210,000 for June versus 217,000 in May.
    "Asian currencies are expensive now and the carry trade
seems to be a bit exhausted. In late fourth quarter, the
dollar/Asian FX could rise on the Fed's hawkish move," said
Saktiandi Supaat, head of FX research at Maybank in Singapore.
    Most emerging Asian currencies have appreciated in the first
half as investors sought higher yields in Asia while major
central banks pumped out cheap money.
    The won has led the gains, with a 4.4 percent appreciation
against the dollar so far in the first six months of the year.
    India's rupee has also risen 2.9 percent with the
business-friendly Bharatiya Janata Party's election win, helping
shake off last year's image as one of the "fragile five"
emerging markets. 
    "We find that a majority of investors argue that EM is
better placed this year from a fundamental perspective," said
UBS's Narain.
    "One of the things that makes us cautious though is that
investors are no longer underweight in EM, so you don't have the
same sort of positioning and technical support than you had six
months back." 
     
    
    Emerging Markets Prices from Reuters                    
 Equities                  Latest    Net Chg  % Chg  % Chg      
             
                                                     on year    
               
 Morgan Stanley                       
 Emrg Mkt Indx   1050.82    +4.64   +0.44   +4.80     
               
 Czech Rep           1006.09    -1.86   -0.18   +1.72     
               
 Poland           2406.44    +6.81   +0.28   +0.23     
               
 Hungary           18592.97  -136.42   -0.73   +0.16     
               
 Romania           6946.13   +67.66   +0.98   +6.97     
               
 Greece             1208.34    -1.63   -0.13   +3.93     
               
 Russia            1361.03   -18.72   -1.36   -5.82     
                
 South Africa    45710.06   +58.21   +0.13  +10.19     
                
 Turkey          79040.12  +567.73   +0.72  +16.58     
               
 China             2048.33   +11.92   +0.59   -3.20     
               
 India           25413.78  +313.86   +1.25  +20.04     
               
                    
 Currencies              Latest    Prev    Local    Local       
              
                                   close   currency currency    
               
                                           % change % change    
               
                                                    in 2014     
              
 Czech Rep      27.43     27.43   -0.03    -0.37      
             
 Poland          4.16      4.15   -0.13    -0.20      
             
 Hungary       309.07    309.42   +0.11    -3.91      
             
 Romania         4.38      4.39   +0.10    +1.76      
             
 Serbia        115.71    115.69   -0.02    -1.05      
             
 Russia            33.94     33.75   -0.57    -3.10      
             
 Kazakhstan       183.53    183.38   -0.08   -15.93      
             
 Ukraine           11.72     11.72   +0.00   -29.78      
             
 South Africa      10.60     10.59   -0.15    -1.45      
             
 Kenya             87.60     87.30   -0.34    -1.60      
             
 Israel             3.44      3.42   -0.43    +0.84      
             
 Turkey             2.12      2.12   -0.11    +0.99      
             
 China              6.20      6.22   +0.23    -2.42      
             
 India             60.11     60.03   -0.13    +2.81      
             
 Brazil             2.19      2.19   +0.00    +7.68      
             
 Mexico            12.98     12.96   -0.19    +0.36      
             
                    
 Debt                 Index   Strip Spd  Chg   %Rtn   Index     
               
 Sov'gn Debt  EMBIG   281          0   0.00   685.97    
                
                    
 All data taken from Reuters at 1136 GMT.                    
 Currency percent change calculated from the daily U.S.         
          
 close at 2130 GMT.                    
                     

 (Additional reporting by Jongwoo Cheon in Singapore)