NEW YORK–Emerging market shares trading in New York were rising early Friday afternoon, with investors remaining upbeat over Latin American stocks despite their recent record rallies.
The Bank of New York’s Emerging Markets American Depository Receipt Index was up 1.2% at 153.95 points, with the Latin America ADR index up 0.9% and Asia’s 0.8% higher.
But traders said volumes were pretty low with little macroeconomic or political news driving the shares.
With the local Mexican index hitting historic levels repeatedly to close Thursday at its sixth straight high, price movements in the country’s ADRs were limited.
Market heavyweight America Movil (AMX), Latin America’s largest wireless-services provider, was up 0.4% to $56.38, while fixed-line phone company Telmex (TMX) was up 0.9% to $40.41 and cement giant Cemex (CX) was up 0.6% to $39.11. However, homebuilder Homex (HXM), which has risen steeply since the beginning of the year, was down 1.6% to $30.30.
“The market is digesting these levels,” said George Raby, a trader of Latin American ADRs at Jefferies & Co. “I’d be a little nervous buying equities at these levels.”
Several Brazilian shares, whose domestic counterparts also took the local index to another record high Thursday, were making further gains. Iron ore miner CVRD (RIO) was up 1% at $29.40 along with other commodity stocks such as steel makers Gerdau (GGB), which was 1.3% higher at $17.19, and CSN (SID), which was gaining 1.5% to $21.97.
Brazilian bellwether Telemar (TNE), a regional fixed-line operator, was up 3.8% to $16.57 and state-run oil major Petrobras (PBR) was up 0.7% at $45.15.
Continued optimism on Argentina’s ongoing $103 billion debt restructuring program was lifting domestic shares as well as their ADRs. The strongest gainers included real estate developer IRSA (IRS), which was up 4.4% at $13.80 after it reported a 75% jump in net profit for the second half of 2004. Its unit Alto Palermo (APSA) was also up 4.3% to $12.49. Among the more actively traded shares, Telecom Argentina (TEO) was up 1.6% to $12.40.
Turning to Asia, investors appeared to be focusing more on the good news than the bad.
An increase in U.S. imports of capital goods, such as computers and telecom equipment, in December was helping chipmaker Taiwan Semiconductor Manufacturing (TSM) gain 1.9% to $9.16 and rival United Microelectronics (UMC) rise 2.8% to $3.66.
However, one trader said there were some sellers in Asian technology names. “Tech doesn’t have a great feeling to it,” said the trader, who didn’t want to be named.
Indeed, U.S. tech stocks were weaker Friday, with the Nasdaq Composite Index dropping after computer giant Dell issued a disappointing first-quarter sales guidance.
Taiwanese flat panel maker AU Optronics (AUO) was shedding 1% to $16.18 and South Korean competitor L.G. Phillips (LPL) was almost flat at $21.18.
But several other South Korean shares were in positive territory, shrugging off losses in the domestic index and concerns over North Korea after that country announced Thursday it has nuclear weapons. Kookmin Bank (KB) was up 3.4% to $44.41 and steel maker Posco (PKX) was up 1.6% at $46.25.
Indian stocks were rising in line with their domestic counterparts, with the country’s second-largest software services exporter Infosys (INFY) up 4.7% at $72.29 and the fourth-largest, Satyam (SAY), up 5% to $25.75. In a research note Friday, Morgan Stanley said that Satyam is one of its key overweight positions as “it is now a significant offshore player, scaling up well, and valuations are attractive.”
In Russia, Rostelecom (ROS) was down 3.2% at $12.00 even after it Thursday said net profit almost tripled in the June-to-December period. Its competitors were having a better time, with Mobile Telesystems (MBT) rising 0.9% to $36.40 and Vimpelcom (VIP) gaining 0.6% to $37.30.
South African gold miners were increasing in value as global prices for gold continued to rebound. Anglogold Ashanti (AU) was nearly 2% higher at $35.17, Harmony (HMY) was up 2.3% at $8.54 and Gold Fields (GFI) was gaining almost 4% to $12.01. On Friday, Harmony received notice from South Africa’s Competition Commission that it is recommending an approval for the company’s proposed merger with Gold Fields.
Source: Yahoo Finance, Singapore
Photo credit: sandeepachetan.com via Visual hunt / CC BY-NC-ND
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