Bloomberg News

Asian Stocks Swing Between Gain, Loss as Alibaba Soars on Buyout

February 22, 2012

Feb. 22 (Bloomberg) -- Asian stocks swung between gains and losses as concern that oil near a nine-month high will crimp economic growth was countered by a surge in Alibaba.com Ltd. and gains by telecommunications companies.

Alibaba, China’s No. 1 e-commerce web portal, jumped 42 percent after its parent offered to privatize the company. NTT DoCoMo Inc., Japan’s largest mobile-phone operator by market value, climbed 2 percent after a report it expanded capacity to prevent service glitches. Kumho Petro Chemical Co., a Korean maker of synthetic rubber and chemicals, slid 4.3 percent as crude oil remained above $105 a barrel. Wilmar International Ltd., the world’s No. 1 palm-oil processing company, dropped 11 percent after its earnings fell short of analyst forecasts.

The MSCI Asia Pacific Index gained 0.4 percent to 128.12 as of 4:11 p.m. in Tokyo. The gauge rose the past nine weeks, the longest such streak since December 2005, amid signs the U.S. economy is improving, bets China will ease monetary policy and optimism Europe will contain the region’s debt crisis. The shares trade at 14.8 times estimated earnings, up from 12.6 on Dec. 16, when the streak began.

“Valuations remain reasonable but are no longer cheap,” said Pauline Dan, who helps oversee $480 million as chief investment officer at Samsung Asset Management in Hong Kong. “There’s no real urgency to invest. Economic numbers from Asia are pointing to a slowdown. Exports are slowing and bank lending in China is unexciting. We may see inflation start to pick up again. The concern is whether companies will be able to deliver earnings in this kind of environment.”

Small Cap Streak

Japan’s Nikkei 225 Stock Average rose 1 percent after swinging between gains and losses. A gauge of smaller companies listed on the Tokyo Stock Exchange rose for a 27th straight day, its longest streak of gains since 1961. Kagetsuenkanko Co., which manages resort hotels and restaurants, rose the most in the measure of companies on Tokyo Stock Exchange’s so-called second section, advancing 48 percent to 92 yen.

South Korea’s Kospi Index rose 0.2 percent and Australia’s S&P/ASX 200 Index climbed less than 0.1 percent. China’s Shanghai Composite Index gained 0.9 percent amid speculation Shanghai, the nation’s financial center, will relax some property curbs.

Hong Kong’s Hang Seng Index swung between gains and losses. China’s manufacturing may shrink for a fourth month in February as Europe’s sovereign-debt crisis damps exports and the housing market cools, a survey of purchasing managers indicated.

Crude Oil

“Even though Greece got the latest bailout, there are still a lot of hurdles to face,” said Shane Oliver, Sydney- based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The main driver for strength in recent times has been monetary easing around the globe or good economic data, and last night was pretty quiet on that front.”

Crude oil futures slid as much as 0.5 percent today from a nine-month high, heading for the first decline in more than a week as prices approached a technical resistance level. Oil for April delivery yesterday advanced $2.65, or 2.6 percent, to $106.25, the highest settlement since May 4.

Kumho Petro Chemical sank 4.3 percent to 167,000 won in Seoul. Air China Ltd., the world’s biggest airline by market value, fell 0.7 percent to HK$5.98 in Hong Kong on speculation fuel costs will rise.

Company Profits

Of 478 companies in the Asia-Pacific gauge that have reported net income since Jan. 9, more than half have fallen short of analysts’ estimates and profit has dropped 58 percent on average, according to data compiled by Bloomberg. That compares with the U.S., where net income has grown an average of 5.3 percent for 399 Standard & Poor’s 500 Index companies that have reported.

Alibaba soared 42 percent to HK$13.18 after its parent company Alibaba Group Holding Ltd. bid as much as HK$19.6 billion ($2.5 billion) to buy out minority shareholders.

OneSteel Ltd., an Australian steelmaker, surged 16 percent to 95 Australian cents in Sydney, extending yesterday’s jump after saying it’s switching focus to iron ore away from its loss-making steel unit.

NTT DoCoMo rose 2 percent to 140,100 yen in Tokyo after Kyodo News reported the company completed a capacity expansion to prevent service glitches.

Wilmar sank 11 percent to S$5.24 in Singapore after the company said fourth-quarter profit rose 57 percent from a year earlier to $500 million. That compares with the $519.8 million average estimate of six analysts compiled by Bloomberg.

--With assistance from Kana Nishizawa in Hong Kong. Editor: John McCluskey

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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