PT Bank Rakyat Indonesia led the Jakarta Composite Index to a five-week high and the rupiah strengthened the most since September on optimism presidential frontrunner Joko Widodo’s pledge to fight corruption will help him win this week’s vote. Indian shares added 0.3 per cent before the government’s budget on Thursday. Russian equities rebounded 0.7 per cent. African Bank Investments Ltd surged 16 per cent in Johannesburg after starting talks to sell its unprofitable furniture retailer.

The MSCI Emerging Markets Index added 0.1 per cent to 1,063.71 at 9.14am in London, its sixth day of gains. Indonesia will elect a new president on Wednesday in an election that survey company Roy Morgan said was “too close to call”. Indian Prime Minister Narendra Modi’s government may outline steps in the budget to revive growth. International Monetary Fund managing director Christine Lagarde yesterday signalled a cut in the institution’s global economic growth forecasts.

“There is rising optimism that Indonesia and India may accelerate economic measures to stimulate economic growth,” Warut Siwasariyanon, the head of research at Asia Wealth Securities Co Ltd, said by phone in Bangkok. “The global economic growth remains fragile as Europe and China still have very weak recoveries.”

Stock valuations

The developing-nation gauge has gained 6 per cent this year and trades at 11 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 6.1 per cent in 2014 and is valued at a multiple of 15.3.

The Jakarta Composite Index rose 1.4 per cent, headed for the highest close since May 28, after Widodo, known as Jokowi, performed strongly in the final leaders’ debate. Bank Rakyat climbed 2.9 per cent to a five-week high to lead Indonesian banks higher. The rupiah strengthened for a second day.

The presidential candidates, seeking to replace Susilo Bambang Yudhoyono, who can’t stand for a third term, have pledged to curb corruption, build infrastructure and reduce income inequality in Southeast Asia’s biggest economy.

HSBC Holdings Plc raised its rating on emerging-market stocks to overweight and upgraded Russian and Indian equities to neutral, according to a note today by strategists Garry Evans and Daniel Grosvenor.

India budget

India’s S&P BSE Sensex advanced for a second day, paced by gains in Infosys Ltd and Tata Consultancy Services Ltd. The equity gauge has jumped 23 per cent this year as international investors poured US$10.5 billion (RM33.4 billion) into the nation’s shares on expectations Modi’s government will spur an economy growing at near the slowest pace in a decade.

The Micex rebounded from a 1.7 per cent drop on Friday. OAO Lukoil climbed 1.2 per cent to lead gains in the Russian gauge.

African Bank Investments, which owns South Africa’s largest provider of loans not backed by assets, surged the most since July 2000. The company entered talks on the potential sale of Ellerine Holdings Ltd and its subsidiaries, the successful conclusion of which might affect the lender’s share price, it said in a statement.

Chinese shares

Eight out of 10 industry groups in the MSCI Emerging Markets Index rose, led by industrial shares. Rail stocks surged in Hong Kong as the Hang Seng China Enterprises Index closed little changed. China Railway Group Ltd and CSR Corp jumped more than 3 per cent.

The National Development and Reform Commission approved a plan to build 436 kilometres (271 miles) of inter-city railways with a total investment of about 50 billion yuan (RM25.7 billion), Shaanxi Daily said on Friday, citing the provincial planning body.

China Overseas Land & Investment Ltd rose 1.5 per cent, its fifth day of advance. Cities such as Hohhot and Jinan have said they may consider easing home-purchase limits.

Dubai’s DFM General Index retreated 0.8 per cent, poised to end a four-day, 17 per cent rally. Emaar Properties PJSC slid 1.6 per cent, the biggest drag to the equity gauge.

The FTSE Bursa Malaysia KLCI Index added 0.4 per cent, poised to close at a record high. Equity gauges in Thailand and the Philippines rose at least 0.5 per cent.

South Korea’s Kospi index lost 0.2 per cent, dragged down by Samsung Electronics Co, which sank 1.1 per cent. India’s rupee and South Africa’s rand weakened at least 0.4 per cent. — Bloomberg