Emerging Stocks Rise, Paring Fifth Weekly Decline, as Baht Gains

Emerging-market stocks rose, paring a fifth weekly decline, after valuations fell to an 11-month low. The won and the baht led currencies higher, while Turkish bonds rallied.

Samsung Electronics Co. gained for the first time in seven days. PT Bumi Resources, Indonesia's biggest coal exporter, advanced from the lowest level since January 2009. Benchmark indexes in Indonesia, Thailand and the Philippines climbed more than 2 percent. Chinese shares in Hong Kong fell for a record 12th day as the nation's Finance Ministry failed to sell all of the debt offered at an auction.

The MSCI Emerging Markets Index advanced 1.2 percent to 954.69 from its lowest close since Sept. 5 at 9:33 a.m. in London. The gauge fell 2.6 percent this week, heading for its longest run of declines in a year, as foreign investors pulled funds from developing-nation assets amid concern the Federal Reserve would pare stimulus known as quantitative easing.

"In the long run, we think emerging markets are going to be quite OK," Norman Chan, head of investment at Calibre Asset Management Ltd., a unit of National Australia Bank Ltd., said in a Bloomberg TV interview in Hong Kong today. "The U.S. economic recovery is still intact. Eventually the U.S. is going to lift emerging markets, especially Asia. The QE exit has been overblown."

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Emerging-market equity funds had outflows of $5.8 billion in the week to June 12, Citigroup Inc. said in a note today, citing EPFR Global. That follows net withdrawals of $5 billion in the previous week, according to Citigroup.

Stock Valuations

This week's losses helped drag 12-month projected earnings on MSCI's developing-nation measure to 9.7 times yesterday, the lowest level since July 2012, according to data compiled by Bloomberg.

Samsung rose 0.9 percent, snapping a six-day, 12 percent retreat. Bumi Resources advanced 7.7 percent, paring its decline in the past month to 18 percent. PT Global Mediacom surged 9.5 percent in Jakarta, the most among stocks on MSCI's emerging-market index, after falling to a nine-month low yesterday.

Stock indexes in Southeast Asia rallied after tumbling this month. The Philippine Stock Exchange Index advanced 2.1 percent, the Jakarta Composite Index added 3.3 percent and Thailand's SET Index climbed 3.5 percent.

More than $2.5 trillion has been erased from the value of global equities since Fed Chairman Ben S. Bernanke said May 22 that policy makers could scale back stimulus efforts should the job market show "sustainable improvement."

Bear Market

Aluminum Corp. of China Ltd. plunged 7.5 percent in Hong Kong before its removal from the Hang Seng China gauge of mainland companies. The H-share index fell 0.2 percent. The measure lost 20.4 percent through yesterday since its recent peak on Jan. 30, exceeding the 20 percent level that signals a bear market to some investors.

The Finance Ministry's failure to sell all of the debt offered at an auction for the first time in 23 months comes during a cash squeeze that threatens to exacerbate a slowdown in the world's second-largest economy.

The ministry sold 9.53 billion yuan ($1.55 billion) of 273-day bills, less than the 15 billion yuan target, according to two traders at finance companies that participate in the auctions.

The Shanghai Composite Index added 0.6 percent for its first gain in nine days.

India's S&P BSE Sensex climbed 1.6 percent after an official report showed inflation slowed to a 43-month low in May. The rupee rallied 0.6 percent against the dollar.

Thailand's government bonds advanced, pushing the 10-year yield down by the most since July 2012, and the baht climbed 0.8 percent versus the dollar. The yield on Turkish 2-year benchmark bonds fell 53 basis points. South Korea's won rose the most in two months.

MSCI's developing-nation index has lost 9.5 percent this year, compared with an 9.7 percent advance in the MSCI World Index of developed-country stocks.

Goodyear Jumps On Q2 Beat, Europe Profit Doubles

Goodyear Tire & Rubber (GT) was up 10% following its better-than-expected second-quarter earnings report.

Goodyear said it earned $181 million, or 67 cents a share, more than double the 33 cents a share in the year-ago period. Excluding one-time costs, earnings were 76 cents a share.

Revenue edged down to $4.9 billion from $5.2 billion.

The results easily beat analysts' expectations for earnings per share of 48 cents on revenue of $4.8 billion.

The company also sounded an upbeat note about its full-year earnings, saying it now expects operating profit on the higher end of its forecast of $1.4 billion to $1.5 billion.

Profit in North America increased to $204 million, from $188 a year earlier, while Asia profits climbed to $91 million from $71 million.  Even Europe, which has been a bugaboo for auto companies amid continent-wide economic weakness, was a success for Goodyear, as profit more than doubled to $51 million from $19 million. Latin America also put in a strong showing, as profit grew to $82 million from $58 million a year earlier.

The stock jumped to a new multiyear high of $19.60 on the news earlier in the day. Goodyear is up more than 48% in the past year.

Alibaba Introduces Cross-Border Shipping Service

Alibaba's Taobao and Tmall are getting into the logistics business in an effort to reach more customers and save them money.

Last week, China's largest shopping websites, Taobao and Tmall, announced they had partnered with eight Chinese logistics companies to launch the International Parcel Forwarding Service. Aimed at simplifying and lowering the cost of shipping online purchases from mainland China to Hong Kong, Macau, and Taiwan, shoppers in those areas can now save up to 50% in shipping and handling fees, the companies said. 

Alibaba's new service consolidates multiple purchases into packages bound for the same region. Once they reach the region, the packages are forwarded to the specific address. 

After trying to increase their sales to Asian countries with large Chinese-speaking populations, Alibaba has seen shipping difficulties and rising costs, a natural part, the company says, of cross-border delivery and operations. For example, Alibaba says, most Taobao and Tmall merchants don't offer international shipping or do so at a premium. In instances where they do offer international shipping, customers have sometimes had to wait weeks, only to find out that their merchandise was lost. The Alibaba shipping service hopes to prevent its customers such headaches. 

As an added note, the International Parcel Forwarding Service includes a Web-based package-tracking system so buyers can follow the progress of their orders online. 

Taobao and Tmall officials said they expect to expand the service to other Asian cities and countries in the near future.

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GM Will Have to Put Its Pickups on a Diet

GM's new Chevy Silverado is already selling very well, but it'll need changes to comply with tough new fuel-economy rules. Photo credit: General Motors.

General Motors (NYSE: GM  ) is in the process of launching its all-new Chevy Silverado and GMC Sierra pickups, and the early word is that they're very good trucks. But GM is already planning the next Silverado and Sierra, and a new report suggests that they'll be very different trucks.

For one thing, they'll be a lot lighter, a necessary change to meet tough new fuel-economy regulations. In this video, Fool contributor John Rosevear shares the latest on GM's plans to make its big pickups much more efficient and looks at how rival Ford (NYSE: F  ) is likely to respond.

GM has had big success in China, but it might not be the best way to invest in China's auto boom. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names the two global auto giants poised to reap even bigger gains as China's vast auto market continues to grow. You can read this report right now for free -- just click here for instant access.

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