By Sujata Rao
LONDON, Nov 27 (Reuters) - Greek stocks made their trading
debut on MSCI's emerging equity index on Wednesday after a
12-year gap, rising 1 percent on the back of European gains,
though broader emerging stocks were subdued after mixed U.S.
Earlier in Asia too the picture was mixed, with Chinese
shares rallying but the Indonesian and Thai currencies extending
losses, the latter hit by political turmoil and an unexpected
interest rate cut.
Athens' stocks added to this year's gains of almost
30 percent that have been fuelled by hopes that relegation to
the emerging index would bring in more inflows from
index-tracking funds and other dedicated investors.
While Greece had carried a tiny 0.02 percent weight in
MSCI's developed index, it will have a larger 0.4 percent share
in the emerging markets index and almost 4 percent in
the emerging European index
The banks joining the index, the National Bank of Greece , Piraeus Bank and Alpha Bank,
however fell 2-3 percent, bucking strong gains in some other new
entrants such as consumer goods firm Folli Folli,
lottery firm OPAP and telecom company OTE.
'It's exciting to have Greece back in the fold,' said John
Lomax, head of emerging equity strategy at HSBC, adding that he
had a triple overweight on Greek stocks.
Lomax attributed Wednesday's big stock moves in Athens to
technical shifts associated with joining the emerging index but
said he expected more gains, underpinned by economic recovery
and the euro zone.
Broader European stocks rose after positive political
developments in Germany and Italy, lifting most
markets in central and eastern Europe.
'European financial stability is an interesting story to
play in the emerging space. You can play this via central Europe
or Greece and if you look at Greek valuations, they still look
cheap,' he added.
Analysts reckon the stocks will get at least $500 million
from passive funds.
'Passive money must wait until the day of entry (to buy) and
this implies that this is still ahead,' said Charlie Gushee,
managing director at brokerage Auerbach Grayson.
Also within MSCI indices, Morocco moved down a notch into
the frontier markets space and out of the emerging index.
Moroccan stocks rose 0.7 percent to a 2-1/2 week high,
but are flat on the year.
Gushee said while relegation to a lower equity league was
positive for Greece, the outlook was less bright for Morocco.
'If you are an EM fund manager benchmarked to the MSCI
emerging index, you will be a forced seller of Morocco,' he
said. 'But if you are a frontier fund manager you are less
likely to have that benchmark in place, so you wont be a forced
Elsewhere, emerging equity moves were lacklustre, with the
main index gaining 0.3 percent, lifted by gains of almost 1
percent in China. A strong U.S. housing report on
Tuesday again ignited speculation that the U.S. Federal Reserve
could start reducing bond-buying before March.
The Thai baht fell up to 0.5 percent to the dollar
after the central bank unexpectedly cut interest rates, saying
political tension was hurting investor confidence.
The currency has slid 3.3 percent this month as protests
have spread and the economy has lost steam. Thai 5-year credit
default swaps rose 5 basis points to 129 bps, a two-month high.
The Indonesian rupiah slumped again to the lowest in almost
five years, forcing the central bank to sell dollars
Ukraine's dollar bond due 2023 fell 0.75 point
ahead of a European Union summit on Thursday. Ukrainian
president Viktor Yanukovich confirmed on Tuesday he would attend
the summit, despite last week shelving plans to sign a landmark
pact with the EU.
(For GRAPHIC on MSCI emerging index performance 2013, see http://link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2013, see http://link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2013, see http://link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
(editing by Ron Askew)
((firstname.lastname@example.org)(+44 20 7542 6176
Keywords: MARKETS EMERGING
(Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 1008.37 +2.97 +0.30 -4.44 Czech Rep 1022.17 +9.10 +0.90 -1.59 Poland 2579.91 +6.42 +0.25 -0.12 Hungary 18568.93 +226.83 +1.24 +2.18 Romania 6208.26 +14.59 +0.24 +20.56 Russia 1408.99 -7.44 -0.53 -10.60 South Africa 39617.59 +423.26 +1.08 +13.86 Turkey 75525.50 -37.69 -0.05 -3.43 China 2201.07 +18.00 +0.82 -3.00 India 20420.26 -4.76 -0.02 +5.11 Currencies Latest Prev Local Local close currency currency )
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