JAKARTA, Nov 4 — Emerging-market stocks headed for a three-month high as Chinese shares rallied and an overnight surge in oil prices lifted energy companies. Malaysia’s ringgit and Indonesia’s rupiah strengthened.

The Shanghai Composite Index gained the most in seven weeks after the government unveiled its five-year plan to bolster the economy and investors speculated on the start of a trading link between Shenzhen and Hong Kong. The Taiex index increased 1.7 per cent after China President Xi Jinping and the island’s President Ma Ying-jeou agreed to meet this weekend. Cnooc Ltd surged 5.4 per cent in Hong Kong as a gauge of energy companies rose to an 11-week high. The ringgit and rupiah added at least 0.4 per cent versus the dollar. South Africa’s rand and Turkey’s lira weakened.

The MSCI Emerging Markets Index rose 1.1 per cent to 870.62 at 8.09am in London, set for its highest level since August 11. Developing-nation stocks have gained for a fourth day as rising confidence that the global economy is stabilising outweighed concern that a pending increase in US borrowing costs will lead to capital outflows. Federal Reserve Chair Janet Yellen addresses the Congress Wednesday before employment reports this week seen as key indicators for the timing of any interest-rate increase.

“Risk appetite is coming back to emerging markets,” said Danny Wong Teck Meng, chief executive officer of Kuala Lumpur- based Areca Capital Sdn Bhd, which manages about US$224 million (RM954.8 million) in assets. Also, “speculation that the Fed might have to delay the decision to raise the rate from December” is also lifting sentiment, he said.

Stock valuations

The developing-nation stock gauge has risen 13 per cent from this year’s low in August and trades at 11.5 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index is valued at a multiple of 16.1.

The Shanghai Composite rallied 4.3 per cent, led by a 10 per cent jump in China Life Insurance Co. Annual growth should be no less than 6.5 per cent in the next five years to realise the goal to double 2010 gross domestic product and per capita income by 2020, President Xi said late yesterday, according to the official Xinhua News Agency. China will also seek to increase the yuan’s convertibility in an orderly manner by 2020 and change the way it manages currency policy, according to the five-year plan.

The Hang Seng China Enterprises Index rose 2.7 per cent, paring an earlier gain of as much as 4 per cent. China’s central bank unintentionally sparked a surge in stocks by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015.

Old statement

Zhou’s comments appeared in a lengthy article dated yesterday that focused on the need for Communist Party discipline. It was published on the PBOC’s website without any indication that the statements were old. The central bank later said via text message that the comments were taken from a speech on May 27, while Hong Kong’s bourse said the program is still subject to regulatory approval.

All 10 industry groups in the emerging-markets index advanced, as a gauge of energy companies climbed to the highest level since August 17. Cnooc rose the most in a month after Brent crude rallied overnight to above US$50 a barrel.

The Taiex had its steepest increase since September 9 amid optimism that improving cross-strait relations will boost the island’s economy. Taiwan Semiconductor Manufacturing Co advanced 3.6 per cent and MediaTek Inc jumped 9.6 per cent. Xinhua confirmed the meeting in a short report that said the two would meet as leaders and exchange opinions on promoting the peaceful development of relations across the Taiwan strait.

Policy rate

The ringgit strengthened the most in more than a week before the central bank meets to decide on its overnight policy rate tomorrow and as recent gains in oil brightened the outlook for Asia’s only major net oil exporter. Stock indexes in Turkey and South Africa climbed 0.8 per cent.

Indonesian equities gained 1.6 per cent and the rupiah strengthened for a third day amid signs economic growth is accelerating as government spending picks up. Gross domestic product increased 4.8 per cent last quarter, compared with 4.67 per cent in the previous three months, according to the median estimate in a Bloomberg survey before figures due tomorrow. — Bloomberg