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Thursday, August 27, 2009

Asian Stocks Advance on China Earnings, U.S. Consumer Report

Wednesday, 26 August 2009

Asian stocks advanced, lifting the MSCI Asia Pacific Index to a two-week high, as Chinese companies increased earnings and a U.S. consumer confidence report beat economist estimates. Air China Ltd., the country’s biggest international carrier, surged 10 percent in Shanghai after first-half net income doubled. China Life Insurance Co., the nation’s biggest insurer, gained 3.2 percent as profit in the period climbed 15 percent. Westfield Group, which operates 55 U.S. shopping malls, rose 4.7 percent in Sydney as a gauge of American home prices advanced.
“People are generally happy that things are improving,” said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “It’s now a question of how strong that is going to be. We’re probably still going to get the occasional rogue figure from time to time.”
The MSCI Asia Pacific Index rose 0.6 percent to 113.73 as of 7:22 p.m. in Tokyo, the highest level since Aug. 14. The gauge has climbed 61 percent from a more than five-year low on March 9 on speculation government stimulus packages and lower borrowing costs will revive the global economy.
Japan’s Nikkei 225 Stock Average gained 1.4 percent as a government report showed the country’s exports fell 36.5 percent in July from a year earlier, less than some economists predicted. China’s Shanghai Composite Index rose 1.8 percent. Taiwan’s Taiex Index sank 1.3 percent, the region’s biggest drop.
Beating Estimates
A third of the 548 companies in the MSCI Asia Pacific Index that have reported net income since early July have exceeded analyst estimates, while 19 percent have missed, according to data compiled by Bloomberg.
Yinchuan Xinhua Department Store Co. rose 9.1 percent in Shanghai after first-half profit climbed. Noritz Corp., which makes water heaters, soared 10 percent after Credit Suisse Group AG said the party favored to win Japanese elections on Aug. 30 will push a policy requiring people to replace old boilers. Consolidated Media Holdings Ltd. surged 12 percent in Sydney after agreeing to sell a stake in an employment Web site.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 0.2 percent yesterday as the Conference Board’s consumer-confidence index climbed in August for the first time in three months. The S&P/Case-Shiller home- price index declined 15.4 percent in June from a year earlier, less than estimated by economists.
“The housing and confidence reports cemented evidence that the U.S. economy is recovering,” said Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc.
China Earnings
Air China climbed 10 percent to 7.92 yuan. Net income surged to 2.88 billion yuan ($422 million) from 1.23 billion yuan a year earlier, the carrier said in a Hong Kong stock exchange statement late yesterday. Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, added 2 percent to HK$11.42.
China Life gained 3.2 percent to HK$34.30 in Hong Kong. Net income increased to 18.2 billion yuan from 15.8 billion yuan a year earlier on investment returns, the company said late yesterday.
Yinchuan Xinhua Department Store rose 9.1 percent to 21.22 yuan in Shanghai after first-half profit climbed 49 percent from a year earlier to 93.9 million yuan.
Asian stocks have rallied this week after the National Association of Realtors said existing home purchases in the U.S. jumped in July by the most since the tallies began in 1999. U.S. Federal Reserve Chairman Ben S. Bernanke said Aug. 21 that the global economy was “beginning to emerge” from recession after “aggressive” action from central banks and governments.
Westfield Group rose 4.7 percent to A$13.03. The world’s largest owner of shopping centers said it doesn’t need to sell shares to raise capital, as the company reported a first-half loss on property writedowns.
U.S. Sales
Toyota Motor Corp., which gets 31 percent of its sales in North America, climbed 1.5 percent to 4,110 yen in Tokyo. Honda Motor Co., which gets 45 percent of its revenue in North America, added 0.7 percent to 3,010 yen.
Companies on the Asian gauge are currently priced at an average 24 times estimated earnings, up from 13.7 times at the end of 2008, as improving economic data and better-than-expected corporate earnings globally point to a global economic recovery.
Water-heater maker Noritz climbed 10 percent to 1,299 yen. The Democratic Party of Japan, which opinion polls suggest will win Aug. 30 parliamentary elections by a landslide margin, has promised to require old water heaters to be replaced with high- efficiency models, a Credit Suisse report said.
Stake Sale
Consolidated Media surged 12 percent to A$3.28. The company said it expects A$440.6 million ($368 million) from the sale of a stake in Seek Ltd., which dropped 3.2 percent to A$5.18.
Transfield Services Ltd. surged 9.2 percent to A$3.80, as the provider of network-maintenance services to miners and utilities said it won a C$150 million ($138 million), 12-year contract with the Ontario Ministry of Transportation.
Aozora Bank Ltd. gained 3 percent to 139 yen. The lender will form a business alliance with Hokuhoku Financial Group Inc.’s Hokkaido Bank to provide agricultural sector finance, Aozora said in a release. Hokuhoku lost 0.9 percent to 231 yen.
Central Glass Co. surged 13 percent to 485 yen, after Hiroshi Matsuda, an analyst at Mizuho Securities Co. boosted the glassmaker’s stock rating by two notches to “strong buy” from “hold.”
Source: Bloomberg