Asian Stocks Rise, Head to Third Weekly Gain; Takeda Advances
March 11, 2010, 11:39 PM ESTBy Jonathan Burgos and Masaki Kondo
March 12 (Bloomberg) -- Asian stocks rose, sending the MSCI Asia Pacific toward its third weekly advance, on speculation the Bank of Japan will add funds to the financial system and as drugmakers gained on the outlook for their U.S. earnings.
Nissan Motor Co., which gets about 77 percent of its revenue outside Japan, climbed 2.1 percent in Tokyo on optimism the Bank of Japan’s actions will help boost profits by weakening the yen. Takeda Pharmaceutical Co., Asia’s biggest drugmaker, gained 1.6 percent in Tokyo on speculation proposed changes to the U.S. health system will fail. Cosco Corp. Singapore Ltd. slumped 4 percent after the Singapore bourse said it will remove the shipbuilder’s shares from the benchmark index.
“I would think highly of any additional easing by the BOJ to preempt the yen’s appreciation,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $14 billion in Tokyo. “The economy is improving, so investors aren’t bearish; nor are they bullish, as a recovery in corporate earnings is almost fully priced in.”
The MSCI Asia Pacific Index rose 0.1 percent to 123.01 as of 1:20 p.m. in Tokyo. The gauge has gained about 2.2 percent this week, as a lower-than-estimated U.S. unemployment rate boosted investor confidence in a U.S. economic recovery.
Shares in the gauge trade at 19 times estimated earnings, compared with 15 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Stoxx Europe 600 Index.
Nikkei Advances
Japan’s Nikkei 225 Stock Average climbed 0.7 percent to 10,741.85, the biggest advance among major Asia-Pacific benchmark indexes. Hong Kong’s Hang Seng Index, Australia’s S&P/ASX 200 Index, South Korea’s Kospi Index and China’s Shanghai Composite Index were all little changed.
Futures on the S&P 500 fell less than 0.1 percent. The gauge gained 0.4 percent yesterday in New York to the highest level since October 2008, as Citigroup Inc. led a bank rally and investors speculated that proposed changes to the health-care system will be harder to pass.
The yen depreciated to 124.15 against the euro today from 123.31 at the 3 p.m. close of stock trading in Tokyo yesterday, and weakened to 90.75 versus the dollar today from 90.38. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Japan’s central bank may seek next week to counter a contraction of its balance sheet caused by the month-end expiration of an emergency-credit program as deflation persists in the world’s second-largest economy.
Drug Stocks Rise
Drugmakers rose the most among the MSCI Asia Pacific Index’s 10 industry groups, following gains by their U.S. peers. Takeda, which counts North America as its largest overseas market, climbed 1.6 percent to 4,140 in Tokyo and was the biggest boost to the index. Astellas Pharma Inc. climbed 0.6 percent to 3,355 yen.
Republicans said the Senate parliamentarian threw up a hurdle to congressional Democrats’ plans to pass changes to U.S. health-care legislation through a process called reconciliation.
“I’m getting more and more convinced that the health-care reform is completely dead,” Scott Tapley, a health-care money manager who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana, said yesterday.
Air China Ltd., the nation’s largest international carrier, surged 13 percent to HK$7.64 after trading resumed in Hong Kong following a two-week trading halt. The carrier said it plans to raise about $954 million in a private share sale to pare debts.
Among stocks that fell, Cosco Corp. slumped 4 percent to S$1.21, the third-biggest decline on the MSCI Asia Pacific Index. The shipbuilder, which will exit Singapore’s Straits Times Index on March 22, also said a European customer canceled an order for a bulk carrier.
HSBC, Manila Electric
HSBC Holdings Plc, Europe’s biggest bank, lost 0.4 percent to HK$81.45 and was the heaviest drag on Hong Kong’s Hang Seng Index. Goldman Sachs Group Inc. cut the stock to “neutral” from “buy” on concern pressures on net interest margins will persist “for some time.”
Manila Electric Co., the Philippines’ largest power retailer, tumbled 5 percent to 173 pesos, the biggest decline on the MSCI index. The company is incurring “deferred revenue” of 540 million pesos ($11.8 million) monthly due to delays in the implementation of a price increase, Treasurer Rafael Andrada told reporters yesterday.
--Editors: Nicolas Johnson, Sam Waite.
To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.
