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Prospects Daily: Developing-country stocks rise for the first time this year, Brazil’s industrial production slows

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Financial Markets… Developing-country stocks gained for the first time this year amid signs of improving global growth prospects, but Turkish stocks extended their slumps on lingering political unrest. The benchmark MSCI Emerging Market Index advanced 0.3% on Wednesday, its first gain since December 31, as investor sentiment was benefiting from encouraging economic reports out of the U.S. and Europe yesterday. The gauge declined 3% in the first four trading sessions of 2014, extending a 5% loss accumulated in 2013.

Indonesia sold $4 billion of US dollar-denominated international bonds today, the largest sovereign offering by an East Asian country excluding Japan, in an effort to bolster its foreign-exchange official reserves and boost the region’s worst performing currency. The country issued two $2 billion tranches of 10-year and 30-year bonds, matching a record set by South Koreans’ deal in April 1998. The new bond sale met with strong demand, receiving orders for four times the amount on offer, as the Indonesian government offered higher coupons compared with those offered last year’s sales.
Developing Economies…East Asia and Pacific: Malaysia’s exports rose for the fifth consecutive month in November 2013 but at a slower pace, rising by 6.7% (y/y) compared with 9.6% in October. Imports rose at a markedly slower pace, advancing 6.4% (y/y) compared with a growth of 13.9% (y/y) in October. Reflecting these trends, the trade balance recorded a surplus of MYR9.72bn, higher than October’s trade surplus of MYR8.23bn.

Latin America and the Caribbean: Brazil’s industrial production fell 0.2% (m/m) in November after rising by 0.6% (m/m) in October. The pace of the decline was, however, weaker than the consensus forecast of a 1.1% in decline, owing to stronger output in the pharmaceutical, fuel refining and office machinery sectors. Year-on-year industrial production growth also slowed in November, coming in at 0.4% compared with a growth of 0.9% (y/y) in October.

Sub-Saharan Africa:  South Africa’s gross reserves increased slightly in December 2013, rising to US$49.59bn up from US$49.3bn in November. Net reserves also increased slightly to US$45.48bn from US$45.4bn in November.

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