Bloomberg News

Asian Stocks Rise, Led by Rare-Earth Firms; Taiwan Surges

November 23, 2012

Asian stocks rose, led by gains in rare-earth companies and Chinese developers, and as Taiwan shares surged after the island’s finance minister said government-controlled funds should buy equities at lows. Japanese markets are closed today.

Lynas Corp. (LYC), builder of the largest rare-earth refinery in Malaysia, climbed 6.7 percent in Sydney as it prepares to start production in the Southeast Asian country. Shui On Land Ltd. (272), a mainland Chinese home builder, added 7.4 percent. Samsung Electronics Co. (005930) rose to a record in Seoul. The Taiex Index jumped 3.1 percent in Taipei, leading gains among the region’s benchmark indexes.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) rose 0.8 percent to 443.33 as of 6:22 p.m. in Hong Kong, with almost two shares rising for each that fell. The gauge is heading for its first weekly advance in three weeks as data on China manufacturing, U.S. jobs and housing added to signs the world’s two largest economies are on the mend.

“The manufacturing data bodes very well for 2013,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management, said on Bloomberg Television. “A lot of the bad news has been priced in. We’ve probably seen the bottom for the markets.”

The benchmark MSCI Asia Pacific Index that includes Japan gained 12 percent from this year’s low on June 4 through yesterday as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. The Asian benchmark traded at 13.8 times estimated earnings on average, compared with 13.4 for the S&P 500 and 12.3 for the Stoxx Europe 600 Index.

Regional Indexes

South Korea’s Kospi Index (KOSPI) gained 0.4 percent. Hong Kong’s Hang Seng Index added 0.8 percent, while China’s Shanghai Composite Index climbed 0.6 percent. Australia’s S&P/ASX 200 Index was little changed.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. U.S. markets were closed yesterday for holidays as European budget talks began in Brussels. The main obstacle to unlocking international loans for Greece is a plan to reduce interest rates charged by euro-area creditors, a Greek official said.

Lynas climbed 5.5 percent to 71.2 Australian cents. Macquarie Group Ltd. raised the stock’s rating to outperform from underperform as the rare-earth producer prepares to start production at its Malaysian refinery by the first quarter of 2013.

China Rare Earth Holdings Ltd. rose 4.1 percent to HK$1.78 in Hong Kong. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. (600111) climbed 1.4 percent to 33.67 yuan in Shanghai. The government may provide annual subsidies of between $35 million and $40 million to the industry, the Financial Times reported, citing Chen Zhanheng, deputy secretary general of China Rare Earths Industry Association.

Samsung Rally

Shui On Land Ltd., which develops properties in mainland China, surged 7.4 percent to HK$3.63 in Hong Kong. A gauge of property companies led gains on the Hang Seng Index, increasing 1.6 percent.

Samsung Electronics Co. climbed 1.5 percent to 1.437 million won in Seoul, heading for a record close on speculation Asia’s biggest electronics maker will extend its dominance in the industry after Fitch Ratings cut Sony Corp. and Panasonic Corp.’s debt ratings to junk.

The gains propelled the market value of Samsung Electronics, based in Suwon, South Korea, t0 212 trillion won ($195 billion), making it the 15th-biggest in the world by market capitalization, according to data compiled by Bloomberg.

“Samsung will benefit from the crumbling of its Japanese rivals,” Kim Hyung Sik, a Seoul-based analyst at Taurus Investment & Securities Co., wrote in a report today. “On top of smartphone sales, Samsung is also boosting its market share with tablet computers.”

The Taiex Index (TWSE) advanced after the Taipei-based Central News Agency reported that Finance Minister Chang Sheng-ford said government-controlled funds and banks that are partially owned by the government should buy local stocks. Government-owned Bank of Taiwan has about NT$22 billion ($755 million) for stock investment, of which about NT$8 billion is invested in local shares, the report said, citing Chairman Liu Teng-cheng.

Formosa Petrochemical Corp. (6505) jumped 6 percent to NT$84.50 in Taipei, bound for the biggest gain since Sept. 14. Taiwan Semiconductor Manufacturing Corp. added 4.6 percent to NT$95.50, heading for a record high. Zhen Ding Technology Holding Ltd., which makes circuit boards, rose by the daily 7 percent limit to NT$78.

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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