Samsung Leads Rally

Emerging markets stocks rose for an eighth day, the longest rally in almost 16 months, as a decline in U.S. Treasury yields fueled demand for riskier assets in developing countries.

Samsung Electronics Co. led the rally, boosted by rising computer chip prices. The Morgan Stanley Capital International Emerging Markets Index today rose 1.3 percent to 1120.39 at 1:38 p.m. in New York, breaking a record for a sixth day.

The perceived risk of owning Brazilian bonds fell today to the lowest since June 22, according to data from Lehman Brothers Holdings Inc. Investors' confidence in developing country stocks was also bolstered by an increase in long-term investment by private equity firms and property funds, said Christopher Palmer at Gartmore Investment Management in London

``Institutional investors and individual investors are moving more money into equity, property and private equity in emerging markets.'' said Palmer, who helps manage $3.5 billion in emerging market equities. ``This helps set benchmarks for prices.''

Emerging market equity funds took in $1.6 billion last week, the biggest inflow since March and the first increase in nine for China-dedicated funds. Morgan Stanley raised $8 billion to create the world's largest global property fund and tap increased demand for real estate in Asia and emerging markets, the bank said June 20. Five-year credit-default swaps based on $10 million of Brazil's debt, a proxy for emerging-market risk, decreased to $69,000 from $71,000 on June 6. A decrease in price suggests a perception of improving credit quality.

DRAM Price

South Korea's Samsung Electronics led the index over the eight days, jumping 14 percent. Chipmakers raised prices of the benchmark dynamic-random-access memory, or DRAM, by 20 percent in July from June, the biggest increase since February last year, Taiwan-based Dramexchange, said on its Web site on July 6.

Petroleo Brasileiro SA, Brazil's state-owned oil company gained 6 percent since June 29 as oil prices rose to a 10-month high July 6.

SA Corporate Real Estate Fund, a South African property investment fund, has jumped 6.5 percent in two sessions.

Indexes in Korea, Taiwan, China, Thailand, Indonesia, South Africa, Russia, Turkey and Egypt rose more than 1 percent today.

OAO Gazprom, the world's biggest natural-gas company, gained 1.3 percent today after a report that may allow foreign participation in its Arctic gas field.

source:bloomberg.com