Emerging stocks poised for longest monthly rally in nine years

Emerging-market stocks are headed for the longest streak of monthly gains since 2005, as optimism that central banks will support economic growth helped offset geopolitical tensions between Ukraine and Russia.

Brazil’s Ibovespa led the advance this month on speculation that President Dilma Rousseff will lose her re-election bid amid faltering economic growth. The S&P BSE Sensex rose to a record on Thursday to cap the longest monthly rally since 2007. The MSCI Emerging Markets Index was little changed at 1.086.80 at 1.40pm in Hong Kong on Friday.

The developing-nation measure has risen 2% in August, poised for seventh months of advances. The value of global equities reached a record $66-trillion this week on bets markets worldwide can withstand crises in Ukraine, the Gaza Strip and Iraq.

“Investors at this point are not factoring those geopolitical risks as something that will have a material impact on growth,” said Noel Reyes, chief investment officer at Manila-based Security Bank Corporation. Still, “a lot of markets are at periodic highs and ripe for a correction. It’s only a matter of time for investors to use these political risks and take profit”.

Stock valuations
The emerging-markets gauge has risen 8.4% this year and trades at 11.3 times projected 12-month earnings, near the most expensive level since 2011, data compiled by Bloomberg show. The MSCI World Index of developed nations has gained 5% and is valued at a multiple of 15.

Aluminum Corporation of China fell to a five-week low in Hong Kong on Friday after its first-half loss widened. CSPC Pharmaceutical Group sank 7% after a major shareholder said it would sell a stake.The Ibovespa has gained 7.9% this month. 

An election poll this week showed Marina Silva would win in a runoff against Rousseff. Data on Friday may show Brazil’s economy contracted in the second quarter by the most since the global financial crisis, according to the median forecast from 42 economists surveyed by Bloomberg.

The Sensex gained 2.9% this month and closed at a record on Thursday. Markets are shut on Friday for a holiday. International investors extended this year’s net purchases of Indian stocks to $12.9-billion, the most among eight Asian markets tracked by Bloomberg. Data on Friday may show gross domestic product expanded at the fastest pace in more than two years in the quarter ended June 30.

Thailand’s SET Index rose 0.2% on Friday, extending this month’s gain to 4%. Investors were lured back by increasing political stability following a military coup that ended months of unrest.

Pakistan’s equity gauge rose 3.1%, poised for its biggest gain since July 2009, on speculation the army will help resolve a political standoff that’s led to two weeks of anti- government protests. – Bloomberg

$200 million nationwide affordable housing project rolls out by December

Government has approved a 4,120-unit affordable apartments scheme for public servants across all ten regions country.

The project is expected to be rolled out before December, according to Managing Director of Italconstruct International Limited – the company contracted to build the houses.

“All the paperwork [with government] has been done. The only thing that we are waiting for is the signing of a loan agreement which will happen pretty soon”, Mr Kwesi Baidoo, MD for Italconstruct said.

The loan, according to him, will be provided by Barclays UK, backed by the UK government's Export Credit Guarantee Department (ECGD) at a rate of 2.25% per annum.

Land for the Greater Accra project has been allocated at Prampram, while paper work for locations of the project in the other regions –notably Ashanti, Eastern, Western and Northern regions – are ongoing.

“The good thing is that Italconstruct [is] already on the ground. We have constructed a number of houses, communities et cetera and we have our factory for producing panels in Tema so it's not an issue of now trying to organise capacity. We already have capacity so as soon as the loan agreement is signed we will be hitting the road and delivering the houses”, Mr Baidoo assured.

The Italconstruct MD made these remarks at the launch of a 100 executive homes units of the company located in East Legon. The Italcourt, as it is called, has 50 3-bedroom detached executive homes in a gated community.

Ghana is faced with with a twin problem of sprawling informal uban housing and a 1.7 million housing deficit.

Although government is intervening by rolling out affordable housing projects in parts of the country, real estate experts say the way to go is the establishment of a Real Estate Fund.

This fund, according to its proponents will solve the problem of accessing capital by estate agents.

"Real Estate Fund is a laudable idea and I think government should look seriously at that. Because access to capital is quite difficult and interest rates are quite high", Mr Baidoo said.

Mr. Baidoo
He said in other countries that have surmounted their housing problems government made available "funds for real estate development with very conducive interest rates that when passed onto the customer he or she does not feel the pinch."

Mr Baidoo also revealed that the newly established Italcourts is aimed at making addressing the housing deficit in country.

“We used our advanced building technology which has several advantages compared to the conventional ones. Some of the advantages include its affordability, speed of construction and also high quality”, Mr Baidoo noted.

He added that the houses were built to be “energy efficient” since the materials for their construction enable energy conservation.

"The other features that makes this exclusive is that there is also a bio-digester installed which means that you wouldn't have to evacuate you septic tank for over 20 years and after you've accumulated enough waste, you can even tap the gas for domestic use", he explained. Story by Ghana | Myjoyonline.com | George Nyavor | [email protected]

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