Bloomberg News

Asian Stocks Advance on China’s Trade Data, Spain Bailout

June 11, 2012

Asian stocks rose, with the regional benchmark index on course for its biggest gain in almost five months, as China’s trade data beat estimates and investors speculated a bailout for Spain’s banks will help ease Europe’s debt crisis.

China Cosco (1919) Holdings Co. jumped 11 percent in Hong Kong as China’s rising imports and exports boosted prospects for shipping lines. Canon Inc. (7751), a camera maker that gets about 31 percent of sales from Europe, rose 3.5 percent in Tokyo. Sumco Corp. surged 14 percent after the maker of silicon wafers for semiconductors posted operating profit that beat estimates. Gauges of volatility fell across the region.

“The bailout will keep companies that borrow from Spanish banks from going down all together,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “In China, overseas demand is stronger than expected.”

The MSCI Asia Pacific Index climbed 1.9 percent to 113.57 at 7:57 p.m. in Tokyo, heading for its biggest advance since Jan. 17. Five stocks rose for each that fell in the measure. The gauge rose for the first time in six weeks last week as policy makers in the U.S., Europe and China signaled they would take steps to stimulate growth.

Japan’s Nikkei 225 Stock Average (NKY) increased 2 percent and South Korea’s Kospi Index rose 1.7 percent. The Nikkei Volatility Index retreated 8.2 percent, while the Kospi 200 Volatility Index sank 4.6 percent. Australian markets were closed for a holiday.

China’s Shanghai Composite Index added 1.1 percent as the nation’s consumer prices increased the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate cut in three years. Hong Kong’s Hang Seng Index jumped 2.4 percent, with the HSI Volatility Index sliding 8.9 percent, the most since March 27.

‘Monetary Measures’

“Growth in China has slowed from last quarter but I think policy makers will ensure that more fiscal and monetary measures will be available in order to lift the economy back up again,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Asia Ltd., which oversees about $10 billion.

Chinese lenders and developers rose. Agricultural Bank of China Ltd., the world’s third-largest lender, gained 2.3 percent to HK$3.11. China Overseas Land & Investment Ltd. (688), the biggest mainland developer listed in Hong Kong, climbed 2.9 percent to HK$16.92.

The nation’s shipping companies gained as a separate government report showed China’s exports climbed 15.3 percent in May to a record, exceeding all 29 estimates in a Bloomberg News survey. Imports rose 12.7 percent compared with expectations for a 5.5 percent gain.

Cosco Jumps

China Cosco, the world’s largest operator of dry-bulk ships, climbed 11 percent to HK$3.84. China Shipping Container Lines Co., the country’s second-largest carrier of sea-cargo boxes, jumped 11 percent to HK$1.93.

Futures on the Standard & Poor’s 500 Index advanced 0.6 percent today. The gauge added 0.8 percent on June 8 on optimism that weekend discussions among European finance officials would result in a bailout for Spain.

Companies linked to Europe gained after Spain requested as much as 100 billion euros ($125 billion) of bailout funds after weeks of escalating concern that bad loans at the nation’s banks might overwhelm public finances.

“Without a bailout, Spain would have had a serious liquidity issue,” said Baring Asset’s Do. “In the short term, it’s relief for Spain and for Europe but it’s not the end solution.”

Canon, Esprit

Canon rose 3.5 percent to 3,240 yen in Tokyo. Esprit Holdings Ltd. (330), a clothier that counts Europe as its biggest market, increased 6.7 percent to HK$13.46 in Hong Kong. Hutchison Whampoa Ltd., which operates ports in Spain and Germany, added 3.1 percent to HK$64.45.

The MSCI Asia Pacific Index (MXAP) dropped 2.1 percent this year through June 8, compared with a 5.4 percent advance by the S&P 500 and a 1.1 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.2 times book value, compared with 2.1 times for the S&P 500 and 1.3 times for the Stoxx 600, according to Bloomberg data. A number below one means companies can be bought for less than value of their assets.

Sharp Corp., Japan’s biggest maker of liquid-crystal displays, advanced 8.2 percent to 424 yen after saying Foxconn Technology Group’s flagship Hon Hai Precision Industry Co. will start buying from its TV panel unit three months earlier than planned. Foxconn is investing in the loss-making operation, which will be taken off Sharp’s balance sheet next month.

Sumco gained 14 percent to 790 yen. It reported operating profit of 2.9 billion yen ($36 million) for the three months through April 30, beating analysts’ estimates of 1 billion yen.

Olam International Ltd. jumped 8.3 percent to S$1.76 in Singapore, heading for its biggest advance since Oct. 27, after the commodity supplier announced a buyback of as much as 10 percent of its outstanding shares.

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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