Bloomberg News

Most Asian Stocks Climb on U.S. Economy; China Developers Slide

December 20, 2011

Dec. 20 (Bloomberg) -- Most Asian stocks rose as optimism about the outlook for the U.S. economy and resilient economic growth in Asia overshadowed concern that China’s real estate sector might be heading for a hard landing.

James Hardie Industries SE, the building materials maker that counts the U.S. as its biggest market, rose 2.4 percent in Sydney after Federal Reserve Bank of Richmond President Jeffrey Lacker predicted moderate expansion in the U.S. economy. Olympus Corp. gained 16 percent after the Nikkei newspaper reported the camera maker is planning a share sale. China Overseas Land & Investment Ltd., the biggest mainland developer listed in Hong Kong, sank 3.5 percent after SouFun Holdings Ltd. said home sales and prices will continue to fall next year.

“The U.S. economy is in a better shape than Europe and that’s positive,” said Andrew Pease, Sydney-based senior investment strategist for the Asia-Pacific region at Russell Investment Group. “Given the huge clouds hanging over the global markets from Europe and uncertainties in the Chinese property market, it’s very hard to be optimistic at this stage. Investors are also pricing in increased geopolitical risks.”

The MSCI Asia Pacific Index gained 0.3 percent, to 110.68 as of 7:57 p.m. in Tokyo, with about five shares advancing for every four that fell. The gauge dropped to a three-week low yesterday after North Korean leader Kim Jong Il died and Fitch Ratings said it may cut the credit ratings of European nations.

Japan’s Nikkei 225 Stock Average advanced 0.5 percent, while South Korea’s Kospi Index gained 0.9 percent.

Hong Kong’s Hang Seng Index closed less than 0.1 percent higher after rising as much as 1.1 percent and falling 0.3 percent. China’s Shanghai Composite Index lost 0.1 percent.

Asia Growth

Australia’s S&P/ASX 200 fell 0.2 percent after the Reserve Bank of Australia cited risks from Europe in its Dec. 6 decision to cut rates even as growth in Asia’s economies remains “solid,” minutes released today showed.

Futures on the Standard & Poor’s 500 Index rose 1 percent after falling as much as 0.2 percent today. The index fell 1.2 percent in New York yesterday after European Central Bank President Mario Draghi said substantial risks to the economy remain and the law keeps him from boosting government bond purchases to fight the region’s sovereign-debt crisis.

The MSCI Asia Pacific Index slumped 20 percent this year year through yesterday, with Olympus leading declines as the camera maker admitted concealing losses over a period of years. Utilities were the worst performing industry in the gauge as Japan’s nuclear-power producers tumbled after the worst nuclear accident in 25 years engulfed Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant.

Relative Performance

The Asia-Pacific Index’s drop compared with a 4.2 percent fall by the S&P 500 and a 15 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.3 times estimated earnings on average, compared with 12.2 times for the S&P 500 and 10.1 times for the Stoxx 600.

Exporters advanced after the Fed’s Lacker said the U.S. economy will expand 2 percent to 2.5 percent next year despite slowing global growth.

James Hardie climbed 2.4 percent to A$6.54. LG Electronics Inc., the world’s fifth-largest maker of mobile phones by sales, gained 1.7 percent to 72,700 won.

Olympus advanced 16 percent to 1,065 yen. The Japanese camera maker may hire financial advisers for a plan to sell 100 billion yen of preference shares to investors that may include companies from Sony Corp. to Siemens AG, the Nikkei newspaper reported, without saying where it got the information.

“A share sale would strengthen Olympus’s financials and that brings reassurance for investors,” said Yoshihiro Okumura, who helps oversee $365 million at Chiba-Gin Asset Management Co. in Tokyo. “It was also positive that there are companies interested in investing in Olympus.”

Chinese Developers

Noble Group Ltd., the biggest shareholder of Yanzhou Coal Mining Co., climbed 5 percent to S$1.16 in Singapore, poised for its biggest advance this month. Yanzhou Coal, China’s No. 4 producer of the fuel, plans to acquire Australia’s Gloucester Coal for at least $2 billion, a person with knowledge of the matter said. Noble, a Hong-based commodities supplier, owns 65 percent of Gloucester, according to data compiled by Bloomberg.

Hang Ten Group Holdings Ltd., a Hong Kong-based clothier, surged 56 percent to HK$2.65 after receiving a HK$2.65 billion ($341 million) buyout offer from Li & Fung Retailing Ltd., whose parent also controls Li & Fung Ltd.

Cochlear Ltd., maker of the world’s top-selling ear implant, gained 16 percent, the most in seven years, to A$64.33 in Sydney after saying it plans to fix a glitch that had led to a recall costing as much as A$150 million ($149 million).

Chinese Home sales

Among stocks that declined, shares of Chinese property developers dropped after SouFun, China’s biggest real estate website, said property transactions will continue to fall in the first half of 2012. Government data released on Dec. 18 showed the nation’s home prices worst performance this year with more than half of the 70 biggest cities monitored in November recording declines.

China Overseas Land sank 3.5 percent to HK$13.36. China Resources Land Ltd., a state-owned developer, fell 2.1 percent to HK$12.22. Guangzhou R&F Properties Co., the biggest homebuilder in the southern Chinese city, lost 1 percent to HK$6.16.

--With assistance from Yoshiaki Nohara in Tokyo. Editors: Nick Gentle, John McCluskey

066570 KS <Equity> 669 HK <Equity> 2777 HK <Equity> 1109 HK <Equity> 688 HK <Equity> 7733 JP <Equity> JHX AU <Equity> NOBL SP <Equity>

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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