10 Nov 2009
Nov. 10 (Bloomberg) -- Asian stocks rose for a third day and the region's currencies gained as Chinese car sales and home prices jumped and exports improved in Taiwan and the Philippines.The MSCI Asia Pacific Index gained 0.8 percent to 118.44 as of 1:26 p.m. in Tokyo, set for the highest closing level since Oct. 26. China's Shanghai Composite Index advanced for an eighth consecutive day. Gold prices traded near a record high, while oil retreated as concern abated Tropical Storm Ida will cause damage to Gulf of Mexico production facilities.
Hyundai Motor Co., South Korea's biggest automaker, added 3.4 percent after a report showed a 76 percent gain in China passenger vehicle sales in October. Taiwan's Compal Electronics Inc., the world's largest laptop computer maker, climbed 2.3 percent after its sales rose 61 percent last month. Taiwan and the Philippines posted the smallest export declines in at least 10 months. Japan's current account surplus unexpectedly widened.
"Risk appetite has come back and there's still cash waiting to be invested," said Manpreet Gill, Singapore-based strategist for Asia at Barclays Wealth, which has $223 billion in assets. "We're still overweight equities as an asset class given we're still in the first 12 months after the bottom in equities and interest rates remain low."
Willing to Take Risk
The Taiwan dollar climbed 0.2 percent to NT$32.33 per dollar and the Korean won gained 0.1 percent to 1159.35. The dollar traded at $1.4981 per euro, after touching $1.5020 yesterday, the lowest since Oct. 26. The yield on the U.S. 10- year government note was little changed at 3.49 percent, after declining for two days, ahead of a record $25 billion auction today.
The Philippine peso reached the strongest level since Oct. 20, gaining 0.2 percent to 46.81, after the statistics office today said exports dropped 18.3 percent in September from a year earlier, the least in 10 months.
"More and more people are willing to take risk," said Kei Katayama, who oversees $1.6 billion of non-yen debt in Tokyo as leader of the foreign fixed-income group at Daiwa SB Investments Ltd., part of Japan's second-biggest investment bank. "There's a little more room for yields to go up."
Financial shares led regional gains after Industrial & Commercial Bank of China Ltd., the country's largest lender, and Commonwealth Bank of Australia were upgraded by brokerages and Japan's Financial Services Minister Shizuka Kamei said domestic banks won't be punished if their Tier 1 capital ratios fall briefly below 4 percent.
"Maximum Impact"
ICBC jumped 1.8 percent to HK$6.78 in Hong Kong, while Bank of China Ltd. advanced 1.5 percent. Credit Suisse Group AG lifted both shares to "outperform" from "neutral," citing lower-than-expected credit costs in their latest earnings reports. Commonwealth Bank, Australia's biggest lender, gained 0.6 percent to A$55.40 after UBS AG recommended buying the shares. An index of Japanese banks included in the Topix index rallied 2.3 percent.
G-20 finance ministers pledged in St. Andrews, Scotland, on Nov. 7 to keep interest rates low and maintain record budget deficits until economic recoveries take hold. The U.S. is feeling the "maximum impact" now from the federal government's $787 billion in fiscal stimulus, former Federal Reserve Chairman Alan Greenspan said yesterday.
AMP Upgrade
Australian wealth manager AMP Ltd. jumped 5.4 percent to A$6.45 after Citigroup Inc. upgraded the shares to "buy" from "hold." Axa SA, France's biggest insurer, and AMP may sweeten their bid for Axa Asia Pacific Holdings Ltd. to about A$12.4 billion ($11.6 billion) after a first offer was rejected, Citigroup said. Axa Asia Pacific rose 2.5 percent, buoyed by an upgrade to "neutral" from "underperform" by Credit Suisse.
China yesterday reported passenger car sales of 8.19 million for the first 10 months of 2009, making the nation the leading auto market this year. Chinese home prices rose 3.9 percent in October from a year earlier, the most in 14 months, the statistics bureau said today. Hyundai Motor, which cited growth in China as one reason it posted record third-quarter profit, gained 3.4 percent to 106,000 won.
Rubber futures rose 2.7 percent to the highest in two weeks on speculation tire demand will increase. Japan's Toyo Tire & Rubber Co. jumped 2.5 percent after Nomura Holdings Inc. boosted the shares to "buy" from "neutral."
‘Worst Is Over'
Japan's Nikkei 225 Stock Average jumped 1.3 percent to 9,938.34, the steepest advance since Oct. 30. Taiwan's Taiex Index advanced 0.6 percent.
South Korea's Kospi Index added 0.6 percent, paring a gain of as much as 1.5 percent after Yonhap News reported the nation's navy clashed with North Korean forces. There were no South Korean casualties, according to the news agency.
Japan's current-account surplus widened in September to 1.57 trillion yen ($17.5 billion) from a year earlier, fueled by growth in China, the Ministry of Finance said today.
"The worst is over," said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. "Exports are on a gradual recovery path. That said, they're still at a very low level compared to their peak."
Taiwan stocks rose for the third day after October exports fell the least in 13 months on increased demand for mobile phones, computers and other electronics from China. Compal Electronics added 2.3 percent to NT$41.95, the highest since November 2003, after yesterday reporting a 61 percent increase in October sales.
Risk Outlook ‘Good'
"Increasingly the outlook for risk is very good," said Wai Ho Leong, a regional economist in Singapore at Barclays Plc. "Japan's current-account surplus helps the perception of Asia's recovery story and deepens it somewhat. The question is where you should invest in Asia, and Korea and Taiwan come off as strong cyclical recovery stories."
Gold futures for December delivery rose 0.1 percent to $1,102.60 an ounce in late trading after climbing to an intraday record of $1,111.70 yesterday. The rally in bullion was aided by the U.S. dollar's slide to a 15-month low against a basket of six major currencies yesterday.
"The key issue is the dollar," said Juerg Kiener, chief investment officer at Swiss Capital Asia Ltd. "We're going to move anywhere between 50 and 100 percent from the breakout level at $850."
Crude oil was steady near $79 a barrel in New York after jumping as much as 3.6 percent yesterday as Tropical Storm Ida entered the Gulf of Mexico, disrupting more than a quarter of the area's oil and gas production, and the dollar weakened.
"The G-20 measures and the dollar provide a lot of input for crude to continue on its march higher," said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. Tropical Storm Ida is "one of those supportive factors that are helping oil."
