BLBG: Asian Stocks Rise as G-20 Ministers Pledge Coordinated Action
Asian stocks rose, led by financial companies and automakers, as Group of 20 finance ministers vowed to combat the global recession and OPEC refrained from cutting output quotas to bolster economic growth.
Mitsubishi UFJ Financial Group Ltd., Japan’s biggest publicly traded bank, rose 6 percent as corporate bond risk fell following a pledge by G-20 officials for coordinated action to clean up banks’ toxic assets. Mazda Motor Corp., Japan’s No. 4 carmaker, jumped 9.8 percent on optimism production will rebound. Woodside Petroleum Ltd. fell 3.2 percent in Sydney as the Organization of Petroleum Exporting Countries decision dragged oil prices down as much as 5.2 percent.
“People in the market have calmed down and started noticing authorities worldwide are doing what they can to revive the global economy and restore the financial system,” said Kiyoshi Ishigane, a strategist at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $61 billion.
The MSCI Asia Pacific Index rose 1.4 percent to 75.77 as of 1:10 p.m. in Tokyo, with about three stocks gaining for each one that declined. Japan’s Nikkei 225 Stock Average climbed 2 percent to 7,717.97, while Hong Kong’s Hang Seng Index gained 1 percent. Most markets in Asia rose except China, Singapore, Malaysia, Thailand and the Philippines.
Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile phones, gained 6.5 percent in Hong Kong following a brokerage upgrade. HSBC Holdings Plc, Europe’s biggest bank, rose 1.1 percent after the South China Morning Post said it won’t need a bailout from the British government.
‘Key Priority’
Futures on the Standard & Poor’s 500 Index fell 0.6 percent. The benchmark gauge rose 0.8 percent on March 13, capping an 11 percent rally for the week, as takeover speculation lifted health-care companies.
The MSCI Asia Pacific Index jumped 3.9 percent last week, its best performance this year. The gauge is still down 16 percent in 2009, extending last year’s record 43 percent drop as the global recession decimated profits at companies from Mazda to Canon Inc., the world’s biggest maker of digital cameras.
Estimated earnings for companies included in the benchmark are down 66 percent from a year ago, according to data compiled by Bloomberg. Companies on the index trade at an average of 1.1 times book value, near its October record low of 1 times book.
The financial crisis prompted governments from the U.S. to China and Japan to widen measures to stimulate growth. Federal Reserve Chairman Ben S. Bernanke said in an interview broadcast by CBS Corp. yesterday that the risk of depression has been “averted.” The “key priority” now is to restore lending, a G-20 statement on March 14 said.
Pump Priming
“We are slowly accumulating equities,” said Scott Lim, who oversees about $800 million as chief executive officer of MIDF Amanah Asset Management Bhd. in Kuala Lumpur. “With all the pump-priming efforts happening around the world, we could still see a recovery in the second half of the year.”
The Bank of Japan is considering buying subordinated debt from banks to shore up capital, the Nikkei reported today. South Korea’s government said yesterday it will exempt corporate taxes for companies selling their assets to pay debt.
Mitsubishi UFJ jumped 6 percent to 444 yen in Tokyo. Mizuho Financial Group Inc., Japan’s second-largest bank, added 5.6 percent to 189 yen.
The cost of protecting investors in Asian bonds from default fell after the G-20’s weekend pledges. The Markit iTraxx Japan index of credit-default swaps dropped 5 basis points, Barclays Capital prices show. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan also lost 5 basis points, according to ICAP Plc.
Oil Prices Slump
Mazda, partly owned by Ford Motor Co., climbed 9.8 percent to 157 yen. The company will resume full production at two domestic plans in July, the Nikkei newspaper said on March 14.
Mazda’s monthly production is expected to rise by about
Woodside Petroleum, Australia’s second-largest oil producer, fell 3.9 percent to A$36.29 in Sydney. Inpex Corp., Japan’s largest oil explorer, slipped 3.7 percent to 650,000 yen in Tokyo. Oil prices tumbled as much as 5.2 percent to $43.85 per barrel in trading today.
Foxconn gained 6.5 percent to HK$2.63 in Hong Kong after Macquarie Group raised its rating for the stock to “outperform” from “neutral” because it expects the company to return to profit this year.
HSBC, which is raising $17.7 billion from a rights offering, rose 1.1 percent to HK$38.65 in Hong Kong. The bank won’t need a bailout from the British government even if economic conditions in the U.S. and the U.K. worsen, the South China Morning Post reported, citing Chief Financial Officer Douglas Flint.
