Asian Stocks Rise, Head to Third Weekly Gain; Takeda Advances
March 12, 2010, 5:37 AM ESTBy Jonathan Burgos and Masaki Kondo
March 12 (Bloomberg) -- Asian stocks rose, sending the MSCI Asia Pacific to 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 2.6 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 1.5 percent in Tokyo on speculation proposed changes to the U.S. health system will fail. Poly Real Estate Group Co. paced declines in China on concern the government will intensify measures to slow economic growth.
“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 0.6 percent to 123.52 as of 7:28 p.m. in Tokyo, with five stocks advancing for every four that declined. The gauge has gained 2.4 percent this week, the most in nine weeks, 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 0.8 percent to 10,751.26, the biggest advance among major Asia-Pacific benchmark indexes. China’s Shanghai Composite Index dropped 1.2 percent, the most this week and capping a second weekly retreat. Hong Kong’s Hang Seng Index was little changed.
The Philippine Stock Exchange Index sank 1.7 percent, the biggest decline in the region, after the central bank pared a lending program for banks yesterday and said it will consider doing more to reduce cash in the economy.
Futures on the S&P 500 climbed 0.2 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.
Bank of Japan
The Bank of Japan 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. The bank’s options include expanding a 10 trillion yen ($111 billion) fund providing loans to banks, according to two central bank officials who spoke on condition of anonymity.
Nissan, Japan’s third-largest carmaker, gained 2.4 percent to 764 yen. Honda Motor Co., which gets about 44 percent of sales in North America advanced 0.9 percent to 3,300 yen. Twice as many stocks advanced as declined on Japan’s Topix index.
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 1.5 percent to 4,135 in Tokyo. Astellas Pharma Inc. climbed 0.6 percent to 3,355 yen. Ranbaxy Laboratories Ltd., India’s biggest drug maker, rose 0.6 percent to 463 rupees.
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.
‘Completely Dead’
“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.
Poly Real Estate Group Co. slipped 1.6 percent to 19.45 yuan in Shanghai. China’s second-biggest developer by market value declined after the Shanghai Securities News said the government may require larger deposits for land auctions. Gemdale Corp., the fourth-biggest, sank 2.9 percent to 13.21 yuan. Industrial Bank Co., part-owned by a unit of HSBC Holdings Plc, lost 2.1 percent.
China’s consumer prices rose to a 16-month high of 2.7 percent in February, the statistics bureau said yesterday, increasing pressure on the government to suppress inflation.
“Further tightening such as an increase in interest rates is only a matter of time,” said Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management Co. in Shanghai.
Manila Electric, Cosco
Air China Ltd., the nation’s largest international carrier, surged 11 percent to HK$7.52 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. It was the biggest increase in the MSCI Asia Pacific Index.
Among stocks that fell, Manila Electric Co., the Philippines’ largest power retailer, tumbled 5 percent to 173 pesos, the biggest drop on the MSCI index. The company is incurring “deferred revenue” of 540 million pesos ($11.8 million) a month due to delays in the implementation of a price increase, Treasurer Rafael Andrada told reporters yesterday.
Cosco Corp. Singapore Ltd. slumped 2.4 percent to S$1.23 after the Singapore bourse said it will remove the shipbuilder from the benchmark Straits Times Index on March 22, and a European customer canceled an order for a bulk carrier.
HSBC, Europe’s biggest bank, lost 0.6 percent to HK$81.30 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.”
--Editors: Nicolas Johnson, Nick Gentle.
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.
