Bloomberg News

Asian Stocks Rise, Led by Financial Firms

November 14, 2012

Asian Stocks Rise, Led by Financial Firms, as China Picks Leader

Signage for China Construction Bank Corp. hangs outside a branch in Shanghai. Photographer: Qilai Shen/Bloomberg

Asian stocks gained as a rebound in financial shares tempered declines among industrial and raw- material companies. China’s once-in-a-decade meeting to choose new leaders draws to a close today.

Sharp Corp. (6753) surged 7.2 percent as Kyodo News reported Intel Corp. may invest as much as 40 billion yen ($500 million) in the Japanese TV maker. Iluka Resources Ltd. (ILU) fell 6.4 percent in Sydney after Goldman Sachs Group Inc. advised selling shares of the world’s biggest zircon producer, citing lower mineral sands prices. China Construction Bank Corp. (939) rose 3.2 percent in Hong Kong as the Financial News reported the nation’s second-largest lender by assets said it can keep non-performing loans under control even as economic growth slows.

The MSCI Asia Pacific Index gained 0.1 percent to 120.09 as of 8:14 p.m. in Tokyo. The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong halted a four-day 3.9 percent slide before the conclusion of China’s leadership congress. Measures of volatility in Japan and Hong Kong fell.

“Confidence is crucial,” said Jing Ulrich, Hong Kong- based chairwoman of global markets at the China division of JPMorgan Chase & Co. “The economy is beginning to stabilize. Maybe in the coming few months we’ll see corporate earnings recover. We are already seeing signs of recovery in things like power generation, retail sales, industrial production and surprisingly Chinese exports have performed better than expected.”

Consumer Confidence

Japan’s Nikkei 225 Stock Average (NKY) gained less than 0.1 percent, with volume 33 percent below the 30-day average. The gauge fell on the previous seven trading days, its longest streak of losses since April. The Nikkei Volatility Index (VNKY) dropped 2.7 percent to the lowest since February 2011 as investors bet on fewer price swings in equity prices. South Korea’s Kospi added 0.2 percent.

Australia’s S&P/ASX 200 Index (AS51) climbed 0.2 percent as a survey showed consumer confidence surged to a 19-month high as central bank interest-rate cuts boosted household optimism. Iluka limited gains on the benchmark, falling 6.4 percent to A$8.10.

China’s Vice President Xi Jinping and Vice Premier Li Keqiang were re-appointed to the Communist Party’s central committee today. Members of the Politburo Standing Committee, the top decision-making body, will be named tomorrow in Beijing.

Hong Kong’s Hang Seng added 1.2 percent and China’s Shanghai Composite gained 0.4 percent. The Hang Seng China Enterprises Index rose 1.7 percent. The HSI Volatility Index lost 5 percent, the biggest drop since September.

Economic Rebound

“With China’s growth target within reach and the employment situation acceptable, we do not expect fresh stimulus after the leadership transition,” said Ding Shuang, senior economist for China at Citigroup Inc. in Hong Kong, who previously worked at the country’s central bank. “It’s most likely that the economy will rebound in the first quarter and first half of next year.”

Futures on the Standard & Poor’s 500 Index advanced 0.5 percent today. The gauge dropped 0.4 percent yesterday as a slump in financial and technology shares erased an earlier rally led by Home Depot Inc.

The MSCI Asia Pacific Index (MXAP) gained 10 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. The measure traded at 13.3 times estimated earnings yesterday, compared with 13.2 for the S&P 500, 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Today is the last day of trading before MSCI Inc. announces its semi-annual rebalancing of indexes.

Sales Forecast

Singapore Telecommunications Ltd. (ST) lost 0.9 percent to S$3.16 after Southeast Asia’s biggest phone company cut its full-year sales forecast on declining Australian revenue and posted second-quarter earnings that missed analyst estimates.

Fairfax Media Ltd. (FXJ), a newspaper publisher that counts billionaire Gina Rinehart as its biggest shareholder, rose 4 percent to 39.5 Australian cents in Sydney after selling its U.S. rural media business to Penton Media for $79.9 million.

Shionogi & Co. (4507) climbed 2.2 percent to 1,348 yen in Tokyo. An experimental treatment for HIV developed by the Japanese company in conjunction with GlaxoSmithKline Plc and Pfizer Inc. reduced the virus in hard-to-treat patients in a late-stage study, providing further support for a regulatory filing by the end of this year.

Noble Group Ltd. slumped 7.3 percent to S$1.08 in Singapore as Vice Chairman Emeritus Harindarpal Singh Banga sold a stake worth about $200 million in Asia’s biggest publicly listed commodity trader by revenue.

Banks accounted for the largest gains among 10 industry groups on the Asian benchmark. China Construction Bank gained 3.2 percent to HK$5.84. National Australia Bank advanced 0.6 percent to A$23.24, recouping some of the last five days of declines.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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


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