* Emerging shares steady off 26-month highs after Ifo reading
* Israel's shekel at new 5-month high ahead of rate decision
* Dubai eyes $1 billion bond
By Sebastian Tong
LONDON, Sept 24 (Reuters) - Emerging markets steadied off
recent highs on Friday as a better-than-expected August reading
of German business confidence helped offset lacklustre U.S.
economic data and concerns about Ireland's ability to grapple
down its debt and deficit
Israel's shekel touched a new five-month high against the
dollar while Dubai is set to stage a capital-markets comeback
with a $1 billion bond issue.
Overnight Asian gains helped steady emerging shares just
below the new 26-month highs they reached on Thursday despite
figures showing an uninspiring pace of economic recovery in the
U.S. []
Ahead of the release later in the day of U.S. durable good
orders for August, the higher-than-forecast reading of the Ifo
German business climate index helped support sentiment.
[]
"There was speculation the Ifo reading would be weaker but
it turned out to be quite good. There is a growing conviction
that European growth won't be as bad as earlier thought," said
Cristian Maggio, emerging markets strategist at TD Securities.
"U.S. durable goods numbers will be the next important piece
of data for emerging markets," he added.
By 1124 GMT, the benchmark emerging equity index <.MSCIEF>
was 0.3 percent higher though emerging European stocks were flat
<.TRXFLDEEPU>.
Czech stocks <> dipped 0.4 percent from Thursday's
12-month highs while Turkish equities <> slid 0.5 percent
to continue their retreat from Wednesday's all-time highs.
DUBAI COMEBACK?
Emerging currencies were mostly on a firmer footing,
although Poland's zloty dipped 0.2 percent to its weakest level
in three weeks versus the euro <EURPLN=>.
The currency has been under pressure this week after the
government raised its forecast for this year's budget deficit.
Russia's rouble, which slipped to an eight-month low against
its dollar-euro basket <RUS=MCX> earlier in the week, continued
to recover, aided by local-currency demand from exporters
seeking to pay upcoming end-month taxes. []
"A confluence of factors affected the rouble, but these
should now be priced ... Russia has lagged in the recovery, but
is now picking up speed in relative terms, when considering both
the latest activity numbers and leading indicators," said Bank
of America-Merrill Lynch in a client note, adding that the
currency remained undervalued from a long-term perspective.
Turkey's lira firmed but remained off Thursday's five-month
highs against the dollar <TRY=>.
The dollar's broad retreat allowed Israel's shekel <ILS=> to
reach a new five-month high ahead of a central bank interest
rate decision on Monday.
"The consensus view has shifted towards a 25 bps hike to 2
percent, however given the strength of the shekel and in light
of the Fed's statement last week, we see unchanged rates as the
more likely outcome this month," said BNP Paribas in a note.
"However, rates will continue to normalise here in the
coming months and so shekel appreciation will likely remain in
tact in the near future."
Meanwhile, Dubai could be the next emerging sovereign to tap
capital markets amid market talk that it could launch a $1
billion bond issue as early as next week. []
The emirate shocked global markets in November when it said
it needed to restructure $26 billion in debt linked to its
flagship conglomerate.
"Investors are more positive on Dubai because of its strong
relationship to the rest of the UAE and as the legacy issues
have been or are being addressed. I am keen on owning Dubai
debt," said Jeremy Brewin, emerging markets fixed income manager
at Aviva Investors.
(Reporting by Sebastian Tong; editing by Catherine Bremer)
