Bloomberg News

Asian Stocks Outside Japan Gain; Nikkei 225 Falls on Yen

January 22, 2013

Asian stocks outside Japan climbed as Samsung Electronics Co. rebounded from a one-month low. The Nikkei 225 Stock Average dropped for a second day as the yen gained after the Bank of Japan (8301) said it will wait until next year to start open-ended asset purchases in pursuit of a 2 percent inflation target.

Samsung Electronics, the first South Korean company to be worth more than $200 billion, rose 1.8 percent, erasing yesterday’s decline when it fell to its lowest since Dec. 21. China Merchants Holdings International Co., a container port operator, jumped 8.8 percent after a report that the government of Shenzhen is reviewing the use of land the company co-owns. Honda Motor Co., a Japanese carmaker that gets about 81 percent of sales overseas, dropped 2.3 percent as a stronger yen weighed on the outlook for export earnings.

The MSCI Asia Pacific excluding Japan Index rose 0.4 percent to 480.45 as of 7:12 p.m. in Tokyo, with about the same number of shares rising and falling. The yen reversed early losses against the U.S. dollar to gain 0.8 percent. The regional equity gauge is priced in U.S. dollars, so gains by the yen inflate the value of Japanese companies in the index.

“There are still a lot of skeptics,” said Stephen Corry, a Hong Kong-based chief investment strategist at LGT Group, a private banking and asset management group that manages about $102 billion. “The big question now is will the combined fiscal and monetary stimulus work? The yen does look oversold and the Nikkei looks overbought.”

The MSCI Asia Pacific Index, which includes Japan, is poised to gain for a third month amid signs the U.S. and Chinese economies are recovering and as Japanese shares rallied on Prime Minister Shinzo Abe’s more aggressive stimulus policies. The index, which is priced in dollars, gained 0.5 percent today as the rising yen offset declines in Japanese shares.

Speculative Buying

The Asia-Pacific benchmark measure traded at 14.3 times average estimated earnings compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average declined 0.4 percent after jumping as much as 1 percent immediately after the BOJ announcement. The Topix Index, Japan’s broadest equity measure, dropped 0.4 percent on volume that was 25 percent higher than the 30-day average.

“The market got speculative buying when investors jumped on headlines without looking to the content of the announcement,” said Soichiro Monji, chief strategist at Tokyo- based Daiwa SB Investments Ltd., which manages the equivalent of about 6 trillion yen ($67 billion). “As they regained calmness, they realized there’s not much new.”

Korea, Taiwan

All 23 economists surveyed by Bloomberg News forecast that the central bank would expand asset purchases today, with a median estimate for a 10 trillion-yen increase. Twenty one economists predicted that the bank would set a 2 percent inflation target.

South Korea’s Kospi Index rose 0.5 percent, while Australia’s S&P/ASX 200 Index (AS51) was little changed. Taiwan’s Taiex Index gained 0.4 percent.

Hong Kong’s Hang Seng Index rose 0.3 percent, and China’s Shanghai Composite Index dropped 0.6 percent. Singapore’s Straits Times Index retreated 0.1 percent.

Thai Beverage Pcl rose 3.4 percent to 45.5 Singapore cents. Overseas Union Enterprise Ltd. said yesterday it won’t match Thai billionaire Charoen’s S$13.8 billion ($11.2 billion) offer for Fraser & Neave Ltd., ending the bidding war for the Singapore-based company. Charoen’s TCC Assets said today it now owns 42.5 percent of F&N. (FNN) Overseas Union gained 4.4 percent to S$2.86, while F&N declined 2 percent to S$9.55.

Kirin, F&N

Kirin Holdings Co. (2503), a Japanese drinks maker, rose 3.2 percent to 1,081 yen in Tokyo. The company said no decision has been made in response to a report it may sell its stake in F&N.

Samsung gained 1.8 percent to 1.48 million won in Seoul.

China Merchants surged 8.8 percent to HK$28.40 in Hong Kong. The Hong Kong Economic Times reported the land it co-owns with China International Marine Containers (Group) Co. (2039) and Shenzhen International Holdings Ltd. is subject to land-use discussions with the city’s government. The Qianhai development area is on the boundary between Hong Kong and Shenzhen.

Shenzhen International surged 21 percent to HK$1.09, the highest since December 2007. China International, which converted Shenzhen-listed B shares into Hong Kong H shares in December, jumped 18 percent to HK$16.46.

China Vanke Co., the country’s biggest publicly traded property developer, surged 10 percent for a second day to HK$15.13 in Shenzhen, on plans to move trading of its foreign- currency denominated shares to Hong Kong.

Exporters Slide

Japanese exporters dropped as the yen headed for a second day of advance. A stronger yen reduces the value of overseas earnings of the nation’s carmakers and electronics manufacturers when repatriated.

Honda slipped 2.3 percent to 3,340 yen. Canon Inc. (7751), the world’s biggest camera maker, declined 1.7 percent to 3,275 yen. Nintendo Co., the maker of Wii game consoles, lost 1.5 percent to 9,070 yen.

Among other companies that fell, Korea Gas Corp. (036460), a liquefied-natural-gas distributor, dropped 6.8 percent to 72,200 won in Seoul, the biggest drop on the Asia-Pacific Index. The company decided not to sell 5.4 trillion won ($5.07 billion) of asset-backed securities, according to Korea Accounting Standards Board guidelines, Korea Economic Daily reported. The company last month said it was proceeding with the sale this year.

Sunac China Holdings Ltd., a property developer, fell 7.5 percent to HK$6.65 in Hong Kong on a share-sale plan.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

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


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