Asia Stocks Equal Longest Streak of Gains Since 2005 on Manufacturing Data
Monday, 06 February 2012 | 00:00
Asian stocks rose for a seventh week, with the regional benchmark matching its longest winning streak since 2005, as improved manufacturing reports in the U.S., China, India and Europe overshadowed a stalemate over Greek debt negotiations.
LG Electronics Inc. (066570), the world’s No. 3 maker of mobile phones that gets 30 percent of its revenue in North America, gained 11 percent in Seoul. Nomura Holdings Inc. (8604), Japan’s biggest brokerage by market value, paced gains among financial firms after reporting an unexpected quarterly profit increase. Glencore International Plc, the world’s No. 1 listed commodity supplier, rose 6.5 percent after entering merger talks with Xstrata Plc.
“We got more confirmation that business confidence in the U.S. and Europe is improving,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the economy will have a chance to gain.”
The MSCI Asia Pacific Index (MXAP) advanced 1.1 percent to 124.32, matching a seven-week rally that ended Oct. 15, 2010, the longest since its nine-week win through Dec. 23, 2005 according to data compiled by Bloomberg. In January, the measure posted its biggest monthly advance since September 2010 amid bets China will ease lending curbs and the U.S. economy is improving.
Japan’s Nikkei 225 Stock Average declined 0.1 percent even after the government reported Jan. 31 that the nation’s industrial production in December rose the most in seven months. South Korea’s Kospi Index added 0.4 percent, while Australia’s S&P/ASX 200 Index lost 0.9 percent.
China’s Shanghai Composite Index climbed 0.5 percent after the country’s manufacturing indexes gained in January, withstanding falling exports driven by Europe’s debt crisis and a government-led property slowdown. Hong Kong’s Hang Seng Index added 1.3 percent.
Asian manufacturers gained this week after reports showed manufacturing in the U.S. grew in January at the fastest pace in seven months, while manufacturing contracted less than initially estimated in the euro region. German output grew for the first time since September.
LG Electronics jumped 11 percent to 90,700 won in Seoul. Quanta Computer Inc. (2382), the world’s largest maker of notebook computers, advanced 6.2 percent to NT$67.10 in Taipei. Foxconn International Holdings Ltd., a contract maker of mobile phones, climbed 2.5 percent in Hong Kong.
Carmakers rallied after a report from Autodata Corp. showed sales of cars and light trucks in the U.S. climbed 11 percent in January from a year earlier as consumers replaced aging vehicles. Separately, Daiwa Securities Group Inc. predicted a “double- digit” gain in the China’s vehicle sales.
Toyota Motor Corp. (7203), the world’s No. 1 carmaker by market value, increased 2.2 percent to 2,899 yen in Tokyo. Geely Automobile Holdings Ltd. (175), whose Chinese parent owns Swedish automaker Volvo AB, added 3 percent to HK$2.41. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., climbed 3.8 percent to HK$24.65.
Nomura Holdings jumped 9.6 percent to 298 yen after saying on Feb. 1 that its net income climbed 33 percent to 17.8 billion yen ($234 million) for the three months ended Dec. 31 from a year earlier, citing cost cuts and the sale of private-equity investments. The average estimate of seven analysts surveyed by Bloomberg was for a 2 billion yen loss.
Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second- biggest lender by market value, rose 3.9 percent to 2,477 yen after saying Jan. 30 it maintained its full-year earnings forecast of 500 billion yen and said it will buy back as much as 80 billion yen of stock.
“The bank is in a relatively good position now where it can selectively offer loans to companies and projects outside of Japan to improve lending profitability,” said Yoshinobu Yamada, a Tokyo-based analyst at Deutsche Bank AG.
Glencore, whose shares rose 6.5 percent to HK$55.65 in Hong Kong, is in talks with Xstrata Plc to merge in a deal that would create an $82 billion rival to BHP Billiton Ltd. Glencore, which already holds 34 percent of the Zug, Switzerland-based mining company, made an approach regarding an all-share “merger of equals,” Xstrata said Feb. 3. Glencore said there’s no certainty of an offer.
Gains in stocks were limited as Greece and its creditors have yet to come to an agreement about a week since discussions with bondholders started.
A Greek debt deal could be reached “in the coming weeks, maybe days,” said Josef Ackermann, chairman of the Institute of International Finance. Ackermann, also chief executive officer of Deutsche Bank AG, may travel to Athens this weekend for talks over a swap involving Greek debt with a face value of 200 billion euros.
“There’s still a lot of headwinds out there in terms of global growth, particularly in Europe,” said Belinda Allen, a senior investment analyst at Colonial First State Global Asset Management in Sydney, which oversees about $145 billion. “The biggest headwind is the implementation risk surrounding the fiscal compact in Europe and negotiations on a Greek debt deal.”
Singapore Airlines Ltd., the world’s No. 2 carrier by market value, slid 4.4 percent to S$10.61. Net income fell 53 percent to S$135 million ($108 million) in the quarter ended December, from S$288 million a year earlier, the airline said in a statement on Feb. 2. The drop was due to rising fuel costs, greater competition and waning demand for premium travel, according to the airline.
More than half of the 254 companies on the Asia-Pacific index that reported earnings from Jan. 9 through 6 p.m. in Tokyo on Feb. 3 missed estimates, according to data compiled by Bloomberg News.