Bloomberg News

Asian Stocks Swing Between Gain, Loss; Sun Hung Kai Drops

March 30, 2012

The MSCI Asia Pacific Index was little changed at 126.51 as of 9:25 a.m. in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

The MSCI Asia Pacific Index was little changed at 126.51 as of 9:25 a.m. in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Most Asian stocks rose as the region’s benchmark equity index headed toward its biggest quarterly gain since 2010. Japanese manufacturers slid after the nation’s industrial production unexpectedly fell and investors waited for U.S. data on income and spending.

Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, climbed 1.6 percent after posting earnings that exceeded estimates. Fanuc Corp. (6954), Japan’s biggest maker of factory robots, fell 2.9 percent. Sun Hung Kai Properties Ltd. (16), the world No. 2 real estate company, plunged 13 percent in Hong Kong after the firm’s co-chairmen were arrested in a corruption probe.

The MSCI Asia Pacific Index climbed 0.2 percent to 126.81 as of 7:56 p.m. in Tokyo, with five stocks rising for every four that fell. The gauge is headed for its first monthly drop since November, paring the biggest quarterly gain since the period through September 2010. The measure has risen 11 percent this year, gaining 0.3 percent on the week.

“You just don’t have sustainability for the markets to reweight higher like they did three or four months ago,”Andrew Pease, Sydney-based chief investment strategist for the Asia- Pacific region at Russell Investment Group, which manages about $150 billion. “You are not going to see any acceleration from here and you may actually feel a bit of moderation” in the U.S.

The MSCI Asia Pacific Index gained 11 percent this year through yesterday as improving economic reports from the U.S. and progress on tackling Europe’s debt crisis boosted the outlook for the region’s exporters. The U.S. Standard & Poor’s 500 Index (SPXL1) has risen 12 percent and the Stoxx Europe 600 Index has advanced 6.6 percent advance.

Hong Kong Developers

Hong Kong’s Hang Seng Index slid 0.3 percent, with a gauge of property companies contributing most to the declines after the arrest of Sun Hung Kai’s co-chairmen, according to data compiled by Bloomberg.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, added 0.5 percent. Australia’s S&P/ASX 200 lost 0.1 percent. South Korea’s Kospi Index closed little changed.

Japan’s Nikkei 225 Stock Average fell 0.3 percent after the government reported the nation’s industrial production slid 1.2 percent in February from a month before. The median estimate of economists in a Bloomberg survey called for a 1.3 percent increase. Fanuc lost 2.9 percent to 14,680 yen.

Earnings Reports

Industrial & Commercial Bank of China added 1.6 percent to HK$5.01 after reporting a 17 percent increase in net income to 44.4 billion yuan ($7 billion) as income from loans and fee- based financial services outpaced a rise in defaults.

In Taipei, Quanta Computer Inc., the world’s largest laptop maker by shipments, added 6.9 percent to NT$77.30 after reporting fourth-quarter net income of NT$6.53 billion ($221 million). The result was higher than the NT$5.52 billion average of 14 analyst estimates, according to data compiled by Bloomberg.

Of 691 companies listed on the MSCI Asia-Pacific Index that have reported quarterly profit since Jan. 9, 57 percent have missed analysts’ estimates, according to data compiled by Bloomberg.

Stocks in the Asian benchmark are valued at 1.41 times per book value, compared with 2.19 times for the S&P 500 and 1.44 times for the Stoxx 600.

Futures on the S&P 500 advanced 0.5 percent today after the index lost 0.2 percent in New York yesterday. U.S. household income rose 0.4 percent and consumer spending climbed 0.6 percent in February, according to economists surveyed by Bloomberg News forecast ahead of today’s reports.

Sun Hung Kai

Hong Kong developers fell after anti-graft investigators arrested Thomas and Raymond Kwok of Sun Hung Kai Properties in one of the former British colony’s highest-profile corruption cases in decades. Rafael Hui, a former No. 2 official in the government, was also arrested, according to a person with knowledge of the matter who asked not to be identified because of the ongoing probe.

“The arrests will have a negative short term impact on sentiment but it’s not going to have an impact on the operation of the company,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Investment Trust, which oversees the equivalent of $72.1 billion in assets. “If the share price gets down to a low enough level there will some bargain hunting interest in the stock.”

Sun Hung Kai slumped 13 percent to HK$96.50, the lowest since December. Henderson Land Development Company Ltd. fell 2.5 percent to HK$42.85, and Sino Land Company Ltd. declined 3.6 percent to HK$12.40.

Trading volume of Hong Kong’s Hang Seng Index (HSI) was 20 percent above the 30-day average today. A gauge of the measure’s volatility fell 1 percent to 19.98, indicating traders expect a swing of 5.7 percent on the benchmark gauge over the next 30 days. Volatility measures for Korea’s Kospi 200 Index (VKOSPI) and Japan’s Nikkei 225 average also fell.

To contact the reporter on this story: 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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