BLBG: Asian Stocks Rise as Yen Weakens, China Widens Stimulus Plans
Asian stocks rose for the first time in four days as a weaker yen improved the earnings prospects for Japanese exporters and China stepped up measures to bolster its economy.
Toyota Motor Corp., which makes 37 percent of its sales in North America, climbed 2.6 percent in Tokyo as the yen traded near its weakest this year against the dollar. China National Software & Service Co., which designs language software, jumped 10 percent in Shanghai after a stimulus package for the industry was approved. Iluka Resources Ltd., the world’s biggest zircon producer, gained 12 percent in Sydney after profit surged.
“There appears to be some light at the end of the tunnel,” said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages about $85 billion. “But you still don’t know if there’s a train coming toward you. We’re still dealing with a sharp synchronized slowdown, and the underlying concern remains global growth.”
The MSCI Asia Pacific Index advanced 0.9 percent to 78.27 as of 1:57 p.m. in Tokyo. The measure dropped 13 percent this year, extending 2008’s record 43 percent tumble, as the credit crisis sent the world’s biggest economies into recession.
The Nikkei 225 Stock Average gained 0.9 percent to 7,604, while South Korea’s Kospi Index added 0.7 percent. Hong Kong’s Hang Seng Index dropped 0.4 percent as a city official forecast lower economic growth.
PT Bank Danamon Indonesia, backed by Temasek Holdings Pte and Deutsche Bank AG, jumped 8 percent in Jakarta on plans to raise funds through a rights offer. PT Indosat, an Indonesian mobile-phone operator, tumbled 13 percent after Citigroup Inc. cut its recommendation on the stock.
Delayed Recovery
Futures on the U.S. Standard & Poor’s 500 Index added 0.4 percent today. The gauge lost 0.1 percent yesterday as the Federal Reserve cut its growth forecast for the U.S. economy. Policy makers foresee the economic recovery could be delayed and “initially quite weak,” the central bank’s minutes released yesterday said.
Governments across the world are stepping up measures to stem the worst global slowdown since World War II. The Bank of Japan today said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit.
Toyota, the world’s biggest automaker, jumped 2.6 percent to 3,140 yen. Honda Motor Co., which gets half its revenue in North America, gained 2 percent to 2,295 yen. Sony Corp., which gets a quarter of its sales from the U.S., climbed 2.1 percent to 1,635 yen.
The Japanese currency traded as weak as 93.85 against the dollar today from 92.39 at the close of stock trading in Tokyo yesterday. The yen sank to 93.96 late yesterday, the weakest since Jan. 7.
‘Deeply Skeptical’
The currency’s gain in the past year has contributed to members of Japan’s Topix index forecasting an 86 percent tumble in net income for the year to March 31, according to a Feb. 17 report from Shinko Research Institute Co.
“Though a weaker yen undoubtedly improves exporters’ earnings, this trend is probably short-lived,” said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees about $6.1 billion. “The yen’s depreciation isn’t necessarily positive this time, as investors are deeply skeptical about the economy’s fundamentals.”
China National Software jumped 10 percent to 11.46 yuan. Founder Technology Group Corp., China’s second-largest computer maker, rose 2.5 percent to 3.76 yuan.
Government Action
The government will seek to boost domestic demand, increase financial input for the industry and maintain the level of export tax rebates for electronic products, China’s State Council, or cabinet, said today.
Baoshan Iron & Steel Co., China’s biggest steelmaker, advanced 4 percent to 5.97 yuan. The Shanghai Securities News reported that the government plans to issue policies this weekend to encourage domestic steel takeovers.
Iluka surged 12 percent to A$4.40. The company’s second- half profit rose almost sevenfold to A$61.9 million ($40 million), helped by higher mineral-sands sales and the falling Australian currency.
Danamon surged 8 percent to 2,700 rupiah. The company said it plans to raise 4 trillion rupiah ($332 million) selling shares in a rights offer. Indosat dropped 13 percent to 4,800 rupiah. The stock was downgraded to “sell” from “hold” by a Citigroup analyst, who cited the expiry of an offer by Qatar Telecom QSC to buy shares in the company.
