Bloomberg News

Asian Stocks Cap Biggest Weekly Gain in Two Months on U.S. Data

November 23, 2012

Asian stocks rose this week by the most in two months as U.S. jobs and home data and China’s preliminary manufacturing report showed signs the world’s two largest economies are recovering.

Li & Fung Ltd. (494), a supplier of toys and clothes to Wal-Mart Stores Inc., climbed 2.8 percent this week in Hong Kong. Toyota Motor Corp., Asia’s largest carmaker, jumped 5.7 percent in Tokyo after its local venture partner Guangzhou Automobile Group Co. said the most difficult period has passed since the breakout of anti-Japan protests. Samsung Electronics Co. (005930), the world’s No. 15 company by value, surged 10 percent to a record in Seoul after debt ratings on its Japanese rivals were cut to junk by Fitch Ratings.

The MSCI Asia Pacific Index climbed 2.5 percent to 122.87 this week, its steepest weekly gain since the period ended Sept. 14. The gauge has gained almost 13 percent from this year’s low on June 4 as central banks from Europe, the U.S., Japan and China took steps to support economic growth.

“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.”

Stocks on Asia’s benchmark index were valued at about 13.8 times estimated earnings on average, compared with about 13.6 times for the Standard & Poor’s 500 Index and 12.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average (NKY) rose 3.8 percent in a holiday-shortened week. The gauge has surged 8.1 percent since Nov. 14 when Prime Minister Yoshihiko Noda called for elections that polls show the opposition Liberal Democratic Party will win. The Bank of Japan held off from more monetary easing on Nov. 20 after expanding asset purchases in September and October.

Taiwan, Korea

Taiwan’s Taiex Index increased 2.8 percent, erasing a weekly decline on Nov. 23 as the island’s finance minister said government-invested funds and banks should be buying stocks.

South Korea’s Kospi Index (KOSPI) gained 2.7 percent. Singapore’s Straits Times Index added 1.5 percent.

Australia’s S&P/ASX 200 Index climbed 1.8 percent. The Reserve Bank of Australia said more interest-rate reductions may be appropriate to spur economic growth as the nation’s mining boom wanes, minutes of its Nov. 6 policy meeting showed this week.

Hong Kong’s Hang Seng Index (HSI) and the Hang Seng China Enterprises Index of mainland companies listed in the city rose 3.6 percent. China’s manufacturing may expand for the first time in 13 months in November, according to a preliminary survey released on Nov. 22 by HSBC Holdings Plc and Markit Economics.

Shanghai, U.S.

The Shanghai Composite Index (SHCOMP) climbed 0.6 percent this week, underperforming other indexes in the region as waning speculation of lower bank reserve requirements overshadowed the positive manufacturing data.

The Standard & Poor’s 500 Index advanced 3.6 percent this week. In the U.S., sales of previously owned homes climbed in October and housing starts rose 3.6 percent to an 894,000 annual rate, the fastest since July 2008 and exceeding all estimates in a Bloomberg survey.

Fewer Americans filed applications for unemployment benefits last week, a separate report showed. Shares in Asia also gained after President Barack Obama expressed confidence that he and Congress will reach a budget agreement.

Sentiment Uplift

“Confidence is growing that a U.S. budget deal can be reached, as politicians from both parties continue to make some positive comments on working together,” said Stan Shamu, a Melbourne-based strategist at IG Markets, a provider of trading services for equities, currencies and commodities. “Better- than-expected existing home sales data has also helped to lift sentiment.”

Li & Fung gained 2.8 percent to HK$12.40 this week in Hong Kong, while Man Wah Holdings Ltd. (1999), a sofa-maker that gets about half of its revenue from the U.S., rose 8.3 percent to HK$5.86. Billabong International Ltd., a surf-wear maker that counts Americas as its biggest market, surged 27 percent to 94 Australian cents in Sydney after saying the head of its biggest unit is examining a potential buyout of the company.

Samsung Electronics, the biggest maker of smartphones, jumped 10 percent to 1,437,000 won in Seoul after Fitch Ratings cut Sony Corp. and Panasonic Corp. to junk, improving the chances of the world’s biggest maker of TVs to extend its dominance. The gain boosted Samsung to 15th on the list of the world’s biggest companies by market value.

Toyota, Nissan

Japanese automakers advanced as they participated in their first major car show in China since large-scale, anti-Japan protests broke out in September over a territorial dispute. Toyota (7203) gained 5.7 percent to 3,515 yen after Hiroji Onishi, its senior managing officer, said at the Guangzhou auto show the company will introduce 20 new models to China in the next three years. Nissan Motor Co. jumped 6.8 percent to 788 yen after saying it plans to expand in smaller Chinese cities with its Venucia brand. Honda Motor Co. (7267) rose 6.1 percent to 2,750 yen.

China’s passenger-vehicle sales will expand by an average 8 percent a year to reach 22 million in 2020, driven by demand for sport-utility vehicles and rising incomes in smaller cities, according to McKinsey & Co.

Guangzhou Automobile, which operates joint ventures with both Toyota and Honda, jumped 11 percent to HK$5.87 in Hong Kong. The most difficult period has passed and people are calmer, said Zeng Qinghong, general manager of the company. Dongfeng Motor Group Co. (489), which produces cars with Nissan Motor Co. in China, surged 8.8 percent to HK$10.56.

Lynas Surges

Lynas Corp., builder of the largest rare-earth refinery in Malaysia, surged 30 percent to 72 Australian cents in Sydney, the biggest weekly advance in the MSCI Asia Pacific Index. (MXAP) Macquarie Group Ltd. raised the stock’s rating to outperform from underperform as the rare-earth producer prepares to start production at the Malaysian refinery by the first quarter of 2013.

Among stocks that fell, Olam International Ltd. (OLAM), the world’s second-largest rice trader, slid 5.7 percent in Singapore after short-seller Carson Block questioned the company’s accounting methods. Olam sued investment firm Muddy Waters LLC and its founder Block for defamation and said it has enough liquidity to withstand market stress.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net.

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


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