Emerging market currencies advance

Emerging-market currencies advance, led by Russia’s ruble, and shares in the Middle East climb.

London - Emerging-market currencies advanced, led by Russia’s ruble, and shares in the Middle East climbed amid speculation Saudi Arabia and Venezuela will cooperate on stabilising crude prices.

The ruble strengthened 1.2 percent against the dollar after sliding 2.6 percent last week. The Bloomberg GCC 200 Index of shares in the oil-exporting Gulf Cooperation Council added 0.8 percent as stocks in Dubai rallied 2.1 percent. Oil advanced toward $35 a barrel in London after Saudi Arabian Oil Minister Ali al-Naimi met with his Venezuelan counterpart on Sunday in Riyadh. Most Asian markets are closed Monday for lunar New Year holidays. Bonds in emerging Europe climbed.

A gauge tracking 20 developing-nation currencies increased 0.2 percent by 9:05 a.m. in London. The index has strengthened for the past three weeks as oil climbed back above $30 a barrel after dropping to a 12-year low in January, largely on bets energy-exporting nations will take steps to shore up the market.

“Emerging markets seem to be happy with the stabilisation of oil prices, but equity market volatility shows us that we shouldn’t be too relaxed here, given no one really knows where oil prices are heading,” said Simon Quijano-Evans, chief emerging-markets strategist at Commerzbank in London, who favours central and eastern European, Turkish and Indonesian foreign-currency bonds.

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The MSCI Emerging Markets Index decreased less than 0.1 percent as six of 10 industry groups retreated, led by consumer discretionary and health care stocks, while material and energy members increased.

Brent increased 0.8 percent to $34.33 a barrel, trimming this year’s loss to 8 percent. The declines were largely spurred by concern that Iran’s effort to boost exports after the removal of sanctions and brimming US crude stockpiles will flood the market with more supply.

Currencies

The ruble appreciated to 76.58 per dollar and South Africa’s rand rose for the third time in four days. Currencies in Romania, Poland and Bulgaria strengthened versus the euro.

The emerging-market currency gauge has recovered since touching record lows last month. It’s still down 0.8 percent this year.

"There is a slight return to risk appetite in emerging- market currencies because most Asian markets are closed," said Guillaume Tresca, a strategist at Credit Agricole in Paris. Sentiment toward emerging markets will remain "cautious" until Federal Reserve Chair Janet Yellen gives a testimony to Congress on Wednesday.

Emerging-market assets retreated Friday as US Labor Department report showed employers added 151 000 workers in January, and hourly earnings rose more than estimated. The jobless rate fell to the lowest level since February 2008. While the data boosted chances of a rate move, most Fed funds futures expect policy makers to hold off until late this year or early in 2017.

Stocks

While most shares on the MSCI Emerging Markets Index rose on Monday, the measure was dragged slightly lower by the 2.7 percent drop in Naspers. Stock indexes in the Czech Republic and Poland decreased.

Companies on the gauge are trading at an average valuation of 10.9 times projected 12-month earnings after a 6.9 percent decline this year. That compares with a multiple of 14.7 for the MSCI World Index of advanced-nation shares, which has retreated 8.3 percent this year.

The Dubai index rose 2.5 percent on Monday, led by Emaar Properties PJSC. Egyptian stocks climbed 2.1 percent and shares in Saudi Arabia and Abu Dhabi climbed at least 1.2 percent. Al- Naimi said he held “successful” talks with his Venezuelan counterpart about ways of cooperating to stabilise the crude market, without saying what steps producers should take. The dollar-denominated RTS Index rose 1 percent.

Bonds

Yields on 10-year Hungarian notes fell two basis points to 3.44 percent and the rate on similar-maturity Polish debt declined three basis points to 3.09 percent.

The premium investors demand to own emerging-market debt over US Treasuries narrowed one basis points to 472, according to JPMorgan Chase & Co indexes.

BLOOMBERG