BLBG: Most Asian Stocks Advance as Japan Prepares New Stimulus Plan
Most Asian stocks rose, with the regional benchmark index set to complete its best month since 1999, as Japan prepared to unveil a new stimulus package and confidence among South Korean manufacturers rose.
Hitachi Construction Machinery Co., the world’s largest maker of giant excavators, jumped 3.9 percent in Tokyo as Prime Minister Taro Aso’s Liberal Democratic Party recommended boosting infrastructure investment. Samsung Engineering Co., the largest engineering company in South Korea, rose 3.9 percent. Woodside Petroleum Ltd. declined 2.1 percent in Sydney after Australia’s central bank said the economy is likely to enter a recession and oil plunged the most in four weeks in New York.
“It’s just a matter of time for the stimulus packages to work their way through the economy,” said Jason Teh, who helps manage $3.5 billion at Investors Mutual Ltd. in Sydney. “The million-dollar question is, has enough been done and what’s the timeframe for the dollars to start trickling through.”
Three stocks gained for each one that fell on the MSCI Asia Pacific Index, which rose 0.6 percent to 82.52 as of 12:52 p.m. in Tokyo. The gauge climbed 9.7 percent this month, the most since June 1999, on optimism governments worldwide will succeed in easing the financial crisis and reviving global growth.
Japan’s Nikkei 225 Stock Average added 1.7 percent to 8,374.81. South Korea’s Kospi Index climbed 2.5 percent. Stock markets in Asia rose, except in China, New Zealand, the Philippines and Vietnam.
Best, Worst Performers
IHI Corp., Japan’s No 3 heavy machinery manufacturer, soared 9.3 percent after saying an annual net loss was narrower than it had forecast. Compal Electronics Inc., the world’s second-largest maker of notebook computers, surged 4.3 percent in Taipei as it boosted factory employee numbers in China amid rising demand. Baoshan Iron & Steel Co. lost 2.8 percent in Shanghai after saying product prices will stay at “low levels.”
Futures on the Standard & Poor’s 500 Index gained 0.7 percent today. The gauge slumped 3.5 percent yesterday, the most in three weeks, as the Obama administration warned some banks will need more government aid and that General Motors Corp. and Chrysler LLC have one last chance to restructure.
Concern about the health of U.S. banks and automakers dragged the MSCI Asia Pacific Index down by 4 percent yesterday, snapping a five-day winning streak that had taken the average valuation of its constituents to the highest since December 2007. The index has lost 8.6 percent since the start of the year, poised for its sixth-straight quarterly decline.
New Stimulus
China’s Shanghai Composite Index has been the region’s best performing benchmark gauge in 2009, posting a 28 percent rally in the first three months of the year amid expectations stimulus measures to revive growth. Vietnam’s VN Index posted the worst record, with a 12 percent slump, as the economy expanded this quarter at the slowest pace on record.
Hitachi Construction jumped 3.9 percent to 1,290 yen. Fanuc Ltd., the world’s largest maker of industrial robots, advanced 2.1 percent to 6,790 yen. Ryohin Keikaku Co., operator of the Muji clothing store chain, rose 3.4 percent to 4,000 yen.
Japan Prime Minister Aso will lay out a third economic stimulus package at a press conference this afternoon, Chief Cabinet Secretary Takeo Kawamura said. The ruling Liberal Democratic Party yesterday recommended the government adopt an economic aid plan that includes infrastructure investment and aims to create 2 million jobs by 2012.
Finance Minister Kaoru Yosano said he supports government- backed purchases of exchange-traded funds as an effort to bolster stock markets.
Crude Oil Surges
Samsung Engineering added 3.9 percent to 58,000 won in Seoul. Hyundai Motor Co., South Korea’s largest automaker, soared 6.2 percent to 56,300 won, aided by the weakening won.
An index of manufacturers’ confidence rose to 60 for April from 50 the previous month, the Bank of Korea said today. That was the highest reading since November. A score of less than 100 means pessimists outnumber optimists.
Woodside Petroleum dropped 2.1 percent to A$38.38. Macarthur Coal Ltd., the world’s biggest exporter of pulverized coal used in steelmaking, fell 4.1 percent to A$3.47. BHP Billiton Ltd., the world’s largest mining company, slipped 0.5 percent to HK$32.40.
Crude oil for May delivery fell 7.6 percent to $48.41 a barrel in New York yesterday, the lowest settlement in almost two weeks. Still, crude has climbed 45 percent since falling to a four-year low in December. A measure of six metals traded on the London Metal Exchange, including copper and zinc, retreated 2.7 percent yesterday, the steepest slide since Feb. 20, amid concern the global slowdown will slash demand for raw materials.
‘Difficult Times Ahead’
“There are limits on how much we can insulate ourselves from what is happening abroad, and therefore there are probably still some difficult times ahead,” Australia’s central bank Deputy Governor Ric Battellino said today. Gross domestic product is “likely to fall in 2009,” he said.
Japan’s statistics bureau said today the nation’s jobless rate rose to 4.4 percent last month, the highest level in three years. Asian economies will expand at the slowest pace since 1998 as a global recession hurts trade, the Asian Development Bank said in a report today.
IHI soared 9.3 percent to 118 yen, the second-best performer on the MSCI Asia Pacific Index today. The company said its net loss will probably be 13 billion yen ($133 million) for the year ending today, compared with its earlier estimate of a 25 billion yen loss, as the Japanese currency weakened more than the company had expected.
Compal climbed 4.3 percent to NT$24.55. The company added an additional 9,000 production-line workers for a current total of 26,000, Chang Chih-ming, a spokesman for the Taipei-based company, said. Output is running at about 80 percent of capacity, compared with around 60 percent in the fourth quarter, he said.
Baoshan Steel fell 2.8 percent to 5.65 yuan after saying it expects product prices to remain low as mills haven’t cut production fast enough to cope with the drop in demand.
