Asian Stocks Rise, Set for Second-Biggest Weekly Gain This Year

Asian Stocks Rise, Set for Second-Biggest Weekly Gain This Year

By Patrick Rial and Saeromi Shin

Nov. 28 (Bloomberg) — Asian stocks rose, driving the region’s benchmark index to its second-best week this year, on optimism steps by governments to pull the world’s economy out of recession will boost demand for raw materials and heavy equipment.

BHP Billiton Ltd., Australia’s largest oil producer, added 7.6 percent as crude headed for the best week in five months. Komatsu Ltd. jumped 6.9 percent in Tokyo on speculation demand for its excavators will increase in China, which lowered interest rates this week. The cost of protecting bonds from default in the region fell.

“Sentiment is stabilizing,” said Kwon Hyeuk Boo, a fund manager at Daishin Investment Trust Management Co. in Seoul, which oversees about $1.4 billion in assets. “Investors are buying into expectations that support measures will keep coming. China’s strong will to support its economy is serving as a key catalyst to Asian markets.”

The MSCI Asia Pacific Index advanced 1.5 percent to 82.71 at 5:33 p.m. in Tokyo. The measure has rallied 6.8 percent this week, a performance only beaten this year by the 6.9 percent rally at the end of October, when central banks from Japan to Taiwan lowered borrowing costs.

China’s central bank cut interest rates by the most in 11 years, three weeks after the government announced a stimulus plan worth more than $500 billion. The Federal Reserve committed $800 billion to unfreeze credit markets, while Citigroup Inc. received a $306 billion government rescue and the European Union proposed a 200 billion euro ($258 billion) spending package.

The gain pared November’s drop to 3.8 percent, the seventh monthly decline and the longest losing streak since the gauge began in December 1987.

Panasonic Earnings

The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan, including the Thai government and Hutchison Whampoa Ltd., fell 2.5 basis points to 365 at 12:45 p.m. in Hong Kong.

Japan’s Nikkei 225 Stock Average added 1.7 percent to 8,512.27 today. Gains were limited as Panasonic Corp. slumped to a five-year low after slashing its profit outlook as the country’s recession deepened. U.S. markets were closed yesterday for the Thanksgiving holiday.

India’s Sensitive Index dropped 0.3 percent as stocks traded for the first time since militant attacks that started on Nov. 26 in Mumbai left as many as 125 people dead. Hotel operators and airlines led declines.

“The aim of the attackers will have been to deter foreign businessmen and indeed foreign fund managers from visiting India,” CLSA Ltd.’s chief strategist Christopher Wood wrote in a report. “Sadly, those efforts will in part be successful.”

Commodity Producers

BHP rose 7.6 percent to A$31. Rio Tinto Group jumped 8.8 percent to A$46.60 after Morgan Stanley resumed coverage of the world’s third-largest mining company with an “overweight” rating. Mitsui & Co., which generates the most profit from oil among Japan’s trading companies, advanced 8.3 percent to 846 yen. more

Asian Stocks Advance on China Rate Cut; Indian Trading Halted

Asian Stocks Advance on China Rate Cut; Indian Trading Halted
By Patrick Rial

Nov. 27 (Bloomberg) — Asian stocks advanced for a third day after China lowered interest rates by the most in 11 years to spur economic growth.

hina Vanke Co., the country’s biggest builder, jumped 6.5 percent on speculation lower borrowing costs will encourage home purchases. BHP Billiton Ltd. gained 5.7 percent in Sydney as commodities rallied for a second day. Komatsu Ltd., which controls 17 percent of China’s excavator market, added 4.4 percent. Markets in India were closed after terrorists killed more than 100 people in Mumbai, the nation’s financial hub.

The MSCI Asia Pacific Index gained 1.8 percent to 81.55 as of 4:12 p.m. in Tokyo, a third consecutive advance. More than three stocks advanced for each one that declined.

“Countries like China still have the weapons and flexibility to control the economy,” said Masahiko Ejiri, who manages Asian equities at Mizuho Asset Management Co., which oversees $26 billion in Tokyo. “For some countries the political risk seems too big, so I would avoid them even if I see value. It’s much safer to have exposure to stable countries.”

The People’s Bank of China yesterday cut its one-year lending rate by 108 basis points to 5.58 percent, less than three weeks after announcing a 4 trillion yuan ($586 billion) economic stimulus plan.

China’s economy is deteriorating more quickly as the impact of the global financial crisis spreads, underscoring the need for “forceful” measures to support growth, the nation’s top planner said today. The country foreign-exchange reserves topped $2 trillion for the first time, the statistics bureau’s chief economist said, giving the nation more resources to take action.

China Trading Partners

China is the largest trading partner for Japan, South Korea and Australia and was the biggest contributor to global economic growth last year. The Nikkei 225 Stock Average advanced 2 percent to 8,373.39, while China’s CSI 300 Index added 3 percent. All other equity benchmarks open for trading rose, except Vietnam and Thailand.

Taiwan, which counts China as its biggest market, posted the region’s second-steepest gain as Hon Hai Precision Industry Co. led a 4.3 percent advance in the Taiex index.

Indian S&P CNX Nifty Index futures for November delivery fell 1.5 percent in Singapore after terrorist shootings and blasts across the city killed 101 people and left 287 injured. Regulators in India closed the Bombay Stock Exchange and National Stock Exchange, along with bond, foreign exchange, commodities and money markets, following the violence in Mumbai.

U.S. stocks jumped yesterday as the Standard & Poor’s 500 Index erased an early decline to rally 3.5 percent, bringing its four-day gain to 18 percent. President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker to head an economic advisory board, boosting investor confidence. Futures on the S&P lost 0.8 percent in Asian trading and the nation’s markets will be closed today for the Thanksgiving holiday.

Share Values

Shares in the MSCI Asia index trade at 5 times cash flow, compared with 5.6 times for companies in the S&P 500. During the last three years Asian stocks have traded at an average of 9.5 times and fell to a record low of 4.3 times last month. more

Japan, Thai Stocks Lead Asian Declines; Banks Buoy South Korea

Japan, Thai Stocks Lead Asian Declines; Banks Buoy South Korea

Japanese and Thai stocks fell in Asia after Toyota Motor Corp.’s debt rating was cut and anti- government protesters shut Bangkok’s main airport. South Korean banks gained after regulators said risks are being controlled.

By Patrick Rial and Shani Raja

Nov. 26 (Bloomberg) — Japanese and Thai stocks fell in Asia after Toyota Motor Corp.’s debt rating was cut and anti- government protesters shut Bangkok’s main airport. South Korean banks gained after regulators said risks are being controlled.

Toyota dropped 4.6 percent after Fitch Ratings lowered the world’s second-largest automaker’s debt to AA. Thai Airways International PCL sank 5.8 percent. Rio Tinto Group slumped 34 percent, leading Australian shares lower, after BHP Billiton Ltd. dropped its takeover bid for the rival miner. Woori Finance Holdings Co. surged 15 percent in Seoul.

“Companies that have kept their balance sheets in order and have stronger business models will get through this better,” said Hugh Dive, Who helps manage about $3 billion at Sydney-based Investors Mutual Ltd.

The MSCI Asia Pacific Index lost 0.3 percent to 79.77 at 3:58 p.m. in Tokyo. About eight stocks fell for every seven that gained. The measure surged 4.1 percent yesterday, the biggest in three weeks, fueled by a surge in commodity prices and the U.S. government’s rescue of Citigroup Inc.

Japan’s Nikkei 225 Stock Average dropped 1.3 percent to 8,213.22 on the lightest trading day of the year for Japan in terms of value. Other Asian benchmark indexes were mixed.

U.S. stocks advanced for a third day yesterday as the Federal Reserve committed an additional $800 billion to unlocking credit markets. The Standard & Poor’s 500 Index swung between gains and losses more than 20 times before closing 0.7 percent higher. Futures on the index lost 0.4 percent in trading today.

Fed Assistance

The Fed said yesterday it will purchase as much as $600 billion of debt issued or backed by government-chartered housing- finance companies and establish a $200 billion program to shore up consumer and small-business loans.

More than half of stocks in Asia have sunk below their book value as the collapse of the U.S. housing market curbed consumer spending on Asian-made goods and reduced demand for fuel and other commodities. MSCI’s Asian index has tumbled by 49 percent this year as the global economy slipped into recession.

Toyota slumped 4.6 percent to 2,985 yen. Fitch lowered its rating on the company and added that the weak auto market could trigger additional downgrades. The company has slashed production and sales forecasts in recent months to cope with a global recession that has eroded demand for expensive items such as cars.

Honda Motor Co. fell 1.9 percent to 2,050 yen. Denso Corp., the world’s largest listed auto-parts maker, slumped 5.5 percent to 1,519 yen.

OECD Forecast

The Organization for Economic Cooperation and Development cut its 2009 growth forecast for its 30 members yesterday to a 0.4 percent contraction, from a previous estimat of 0.3 percent, and called on governments to use fiscal and monetary policy to ease the worst recession since the early 1980s. more

Stocks in Europe, Asia Decline, Led by Banks; U.S. Futures Drop

Stocks in Europe, Asia Decline, Led by Banks; U.S. Futures Drop

By Adria Cimino

Nov. 19 (Bloomberg) — Stocks fell in Europe and Asia, led by financial firms and commodity producers, on concern the economic slowdown will cut profits. U.S. futures dropped before a report that may show consumer prices slid the most since 1949.

BNP Paribas SA, France’s biggest bank, ING Groep NV and Hannover Re retreated more than 5 percent. BHP Billiton Ltd. the world’s largest mining company, followed metal prices lower, decreasing 3.1 percent in London.

The MSCI World Index lost 0.5 percent to 857.18 at 8:55 a.m. in London as eight of 10 industry groups declined. More than $31 trillion has been erased from the value of global equities as writedowns and credit losses topped $966 billion in the worst financial crisis since the Great Depression.

“We’re in an uncertain environment,” said Julien Quistrebert, an equity analyst at KBL Richelieu Gestion in Paris, which oversees $5.1 billion. “The question is how long will the recession last and what will be the impact on companies.”

Europe’s Dow Jones Stoxx 600 Index declined 1.5 percent. Standard & Poor’s 500 Index futures lost 1.8 percent. The MSCI Asia Pacific Index slid 0.8 percent, retreating for a third day.

The cost of living in the U.S. probably slid in October by the most in almost six decades as fuel costs plummeted and retailers discounted merchandise to entice shell-shocked customers, economists said before a government report. Treasuries rose, and yields showed inflation expectations are the lowest in at least a decade.

A recession that may become the worst in decades raises the risk that deflation, or a prolonged decline in prices, will be another hazard facing Federal Reserve Chairman Ben S. Bernanke and President-elect Barack Obama. more