Bloomberg News

Asian Stocks Rebound as Phone Companies Lead Gains; Lynas Slumps

March 11, 2014

Asian stocks rose, with the regional benchmark index rebounding after yesterday dropping the most in two weeks, as telecommunications companies advanced.

True Corp Pcl climbed 3.4 percent in Bangkok, leading gains among the region’s phone companies. Sihuan Pharmaceutical Holdings Group Ltd. (460) jumped 4.4 percent in Hong Kong after the drugmaker’s profit beat analyst estimates. Lynas Corp., which operates one of the world’s largest rare-earth processing plants, tumbled 8.5 percent in Sydney after posting a wider first-half loss and saying it needs additional funding.

The MSCI Asia Pacific Index climbed 0.3 percent to 138.02 at 8:20 p.m. in Hong Kong as about three shares rose for every two that fell. The gauge dropped from a six-week high yesterday, losing 1.1 percent in the biggest slide since Feb. 20. The Bank of Japan maintained monetary easing today.

“The BOJ will have to do more to support the economy,” said Tim Schroeders, a money manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Any sustainable improvement in the Japanese economy needs to be tackled with a combination of monetary easing and structural reforms.”

Japan’s Topix index closed 0.5 percent higher after earlier erasing gains following the BOJ announcement. The central bank maintained its pledge to expand the monetary base at a pace of 60 trillion yen ($581 billion) to 70 trillion yen per year, reserving the option of additional easing as ammunition ahead of an April sales-tax bump that threatens to trigger the deepest quarterly contraction since the March 2011 earthquake. The BOJ’s decision was forecast by all but one of 34 economists surveyed by Bloomberg News.

Kospi, Taiex

South Korea’s Kospi Index advanced 0.5 percent. Taiwan’s Taiex gained 0.4 percent. Hong Kong’s Hang Seng Index closed little changed after swinging between gains and losses, while China’s Shanghai Composite Index rose 0.1 percent. Australia’s S&P/ASX 200 Index (AS51) added less than 0.1 percent. New Zealand’s NZX 50 Index slid 0.3 percent.

A report yesterday showed aggregate financing in China dropped to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, down from January’s record 2.58 trillion yuan and less than the 1.31 trillion yuan median estimate of analysts surveyed by Bloomberg News. Chinese exports slid the most since 2009 last month, according to government data released over the weekend.

“There’s concern China’s 7.5 percent growth target is going to be challenging when you see credit growth and exports declining,” Toby Lawson, head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA in Sydney, said by phone.

Liberalizing Rates

People’s Bank of China Governor Zhou Xiaochuan said today that China’s deposit rates will be liberalized in one to two years, suggesting the government could move faster than some analysts forecast. Zhou commented at a press briefing in Beijing as part of sessions of the annual meeting of the National People’s Congress. He also said that interest rates will initially rise as controls are removed.

The MSCI Asia Pacific Index has increased 6 percent from this year’s low on Feb. 4. Futures on the S&P 500 fell less than 0.1 percent today. The U.S. benchmark index lost 0.1 percent yesterday, retreating from a record high.

Crimea Standoff

Russia showed no signs of yielding in the Crimea standoff as Ukraine’s prime minister prepared to meet U.S. President Barack Obama and western nations threatened further repercussions if Russia failed to defuse tensions. Ukraine is testing its military’s combat readiness, the Defense Ministry said, while reiterating the government’s desire for a peaceful solution.

Phone companies posted the biggest advance among the 10 industry groups on the MSCI Asia Pacific Index. True Corp. (TRUE) climbed 3.4 percent to 7.60 baht in Bangkok after New Street Research raised its rating on the stock to buy from neutral.

SoftBank Corp. gained 2.6 percent to 8,178 yen in Tokyo. Chairman Masayoshi Son is reframing his argument for consolidation in the U.S. mobile-phone market, heading to Washington this week to advocate for wireless broadband as an alternative to cable. The billionaire, who is said to be considering an offer for T-Mobile U.S. Inc. after buying control of Sprint Corp. last year, has met resistance from regulators.

Sihuan Pharmaceutical gained 4.4 percent to HK$9.50 in Hong Kong. The company reported today that full-year net income increased to 1.3 billion yuan, beating the 1.2 billion yuan average estimate of 12 analysts tracked by Bloomberg.

Vanguard International Semiconductor Corp. (5347) jumped 6.9 percent to NT$47.75 in Taipei, the highest close since October 2000, after reporting that sales increased last month.

Among stocks that fell, Lynas tumbled 8.5 percent to 27 Australian cents in Sydney. The company posted a first-half pre-tax loss of A$59.3 million ($54 million) compared with a loss of A$54.5 million a year ago. The company said additional funding may be needed over the next 12 months to boost liquidity.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Jim Powell


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