BLBG: Asian Stocks Gain, Led by Commodity Producers; BHP, Inpex Gain
By Kyung Bok Cho and Shani Raja
Nov. 14 (Bloomberg) -- Asian stocks rose, paring a weekly decline, as commodity producers climbed after oil and metal prices rallied and investors snapped up shares trading near the cheapest valuations on record.
BHP Billiton Ltd. jumped 5.8 percent in Sydney after oil prices rebounded and nickel and zinc prices advanced. Inpex Corp. climbed 7.7 percent in Tokyo after winning rights to explore an Indonesian oil field and as Asian energy shares traded at their cheapest relative to the region's equities in 17 months. United Microelectronics Corp., the world's second-largest maker of custom chips, surged by the daily limit in Taipei on speculation it may buy Chartered Semiconductor Manufacturing Ltd.
The MSCI Asia Pacific Index added 1.2 percent to 83.24 at 1:58 p.m. in Tokyo, snapping a three-day, 8.8 percent slump. More than two stocks gained for each that fell. All 10 industry gauges advanced, with energy companies climbing 3.2 percent.
``Valuations for some of the energy stocks just seemed too compelling and some people jumped in,'' said Hans Kunnen, head of investment market research at Colonial First State Global Management, which manages $128 billion. ``The volatility still has me worried. Make sure you've got some good companies with good long-term futures and ride the storm out.''
The index is set to lose 3.4 percent this week on mounting evidence economies are slowing. China's industrial output missed estimates and Australian business confidence fell to a record low, while Fitch Ratings cut its outlook on South Korean banks. In the U.S., the Treasury scrapped plans to buy mortgage assets to focus on supporting consumer credit.
Valuations
Shares on the index are valued at 10 times trailing earnings and fell to as low as 8.2 times last month. Prior to the current market turmoil, it never dropped below 10, according to Bloomberg data dating back to 1995. The gauge has lost more than half its value since the peak in November 2007.
``I've been telling our clients that just looking at valuations you can see that the declines are excessive,'' said Seiji Iwama, a Tokyo-based fund manager at Daiwa SB Investments Ltd., which manages $53 billion. ``Even if we don't get profits returning to record levels, a normal recovery should bring a major recovery for the stock market.''
Japan's Nikkei 225 Stock Average gained 2.8 percent to 8,466.45. Nintendo Co. advanced after sales of its Wii console jumped in the U.S.
China's CSI 300 Index rose 1.8 percent, led by China Vanke Co., on speculation banks relaxed mortgage lending approvals. The gauge has jumped 14 percent this week, the most since April, after the government announced a 4 trillion yuan ($586 billion) plan to boost the slowing economy.
U.S. Futures
Futures on the Standard & Poor's 500 Index slid 0.8 percent. The S&P 500 advancing in the final hour of trading yesterday to close 6.9 percent higher as the rebound in oil prices boosted shares including Exxon Mobil Corp.
Crude oil added 3.7 percent to $58.24 a barrel yesterday in New York after a U.S. government report showed a smaller-than- expected supply increase and refiners cut operating rates. A measure of six metals traded on the London Metal Exchange gained yesterday for the first time in three days as zinc rose 4.9 percent and nickel 9.1 percent.
BHP, the world's biggest mining company and Australia's largest oil producer, added 5.8 percent to A$26.44, snapping a three-day, 16 percent decline. Cnooc Ltd., China's biggest offshore oil producer, jumped 6.3 percent to HK$6.11 in Hong Kong.
Inpex climbed 7.7 percent to 491,000. The Tokyo-based company and its partners won rights to explore the Semai II block off the coast of West Papua province, Inpex said yesterday.
Price Report
Steelmakers climbed after the Nikkei newspaper said Cia. Vale do Rio Doce withdrew a request for a second price increase this year for sales to Nippon Steel Corp. and others. Nippon Steel, the world's second-largest maker of the alloy, rose 6.2 percent to 292 yen. JFE Holdings Inc., the third biggest, gained 5.5 percent to 2,400 yen.
United Microelectronics climbed 6.9 percent to NT$8.35, after its U.S.-traded shares jumped 39 percent overnight. Chartered Semiconductor jumped 7.1 percent to S$0.23, paring its annual decline to 77 percent.
``There has been lots of speculation in the market'' about an acquisition, said Kenneth Lee, a technology analyst at Primasia Securities Ltd. in Taipei. ``It's quite possible that United Microelectronics will buy Charter, given its strong cash flow.''
``We don't comment on rumors,'' Alex Hinnawi, a spokesman at United Microelectronics said by phone. Chartered spokeswoman Celestine Lim couldn't immediately be reached for comment.
Nintendo, the world's largest maker of handheld video-game consoles, advanced 6.5 percent to 30,400 yen in Osaka, snapping a six-day, 21 percent slide. U.S. sales of the company's Wii console increased 55 percent in October, New York-based NPD Group Inc. said yesterday.
China Developers
China Vanke, the nation's biggest listed property developer, rose 2.1 percent to 6.79 yuan. Gemdale Corp., a builder allied with ING Groep NV, advanced 4.6 percent to 6.23 yuan. Chinese banks relaxed requirements for mortgage lending approvals as the government seeks to stabilize the country's property market, the Standard newspaper reported from Hong Kong.
Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest maker of ships, gained by the daily limit of 15 percent to 15,650 won in Seoul. Korea Development Bank and Hanwha Group signed a preliminary agreement on the sale of a 50.4 percent stake in the company.
To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
