03 Feb 2009
Feb. 3 (Bloomberg) -- Asian stocks rose for the first time in three days, led by bank and technology shares, as Japan and Australia widened efforts to revive economic growth and memory- chip prices surged.Commonwealth Bank of Australia soared 9.2 percent in Sydney after saying profit will beat analysts' estimates and as the government announced $26.5 billion in extra spending. Sumitomo Mitsui Financial Group Inc, Japan's third-biggest bank, jumped 3.7 percent in Tokyo after the central bank said it will buy shares held by financial institutions. Hynix Semiconductor Inc. added 3 percent as chip prices rose the most since November 2007.
"These sorts of stimulus measures are steps in the right direction," said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages about $85 billion. "We need circuit-breakers to unlock the credit logjam."
The MSCI Asia Pacific Index rose 0.7 percent to 81.82 as of 2:27 p.m. in Tokyo, with financial and technology shares accounting for two-thirds of the advance. The gauge is down 8.7 percent this year amid mounting signs the global recession is pummeling corporate profits.
Australia's S&P/ASX 200 Index added 0.3 percent, while Japan's Nikkei 225 Stock Average dropped 0.2 percent. All markets open for trading advanced except Indonesia, Malaysia, the Philippines and Vietnam.
Mitsui O.S.K Lines Ltd. gained 5.9 percent in Tokyo, leading gains among shipping companies, after transport rates climbed for the 10th day. Incitec Pivot Ltd., Australia's largest fertilizer maker, plunged by a record on a lower-than- expected profit forecast. Shionogi & Co., a Japanese drugmaker, fell for a second day after slashing its earnings target.
Government Intervention
Futures on the Standard & Poor's 500 Index gained 0.4 percent. The gauge dropped 0.1 percent yesterday as a government report showed that consumer spending slumped for a sixth month. The U.S., seeking to stem record foreclosures, is considering guarantees for home loans modified by their servicers.
Governments around the world are stepping up efforts to revive a global economy burdened by more than $1 trillion of losses tied to the credit crisis. Global growth will almost grind to a halt this year, the International Monetary Fund said last week. South Korea's finance ministry said today the IMF expects the country's economy to contract this year for the first time in 10 years.
Australia's government today announced it will spend another A$42 billion ($26 billion) to bolster its economy while the country's central bank cut its benchmark interest rate by 100 basis points to the lowest level in more than four decades.
"Every little bit helps," said Rob Patterson, who manages about $2 billion at Argo Investments in Adelaide, Australia. "We're trying not to join the rest of the world in a recession."
Share Purchases
Commonwealth Bank, Australia's No. 1 mortgage lender, jumped 9.8 percent to A$29.05 after saying first-half profit will be about 20 percent higher than analysts have estimated. National Australia Bank Ltd., the country's biggest by assets, added 4.5 percent to A$19.55. Woolworths Ltd., Australia's largest retailer, gained 1.7 percent to A$27.61.
Sumitomo Mitsui rose 1.7 percent to 3,550 yen in Tokyo, having earlier jumped 8 percent. Mizuho Financial Group Inc. added 5.2 percent to 223 yen. The Bank of Japan said it will buy 1 trillion yen ($11.1 billion) in shares through April 2010 and will hold onto them until March 2012 at the earliest.
Stimulus measures "will help minimize the downside to some degree in the short term," said Joseph Tan, chief Asian economist at Credit Suisse Private Bank in Singapore. "There's always that shadow hanging down our heads. Jobs are still being lost, consumption is coming down and economies are falling."
Computer Chips
Stock market declines this year extended 2008's record 43 percent tumble for the MSCI Asia Pacific index. Average valuations for companies on the measure have fallen 31 percent in the past year to 11 times reported profit.
Hynix, the world's second-biggest computer-memory maker, climbed 3 percent to 9,170 won in Seoul. Samsung Electronics Co., Hynix's larger rival, gained 3.8 percent to 497,000 won. Advantest Corp., the world's biggest maker of memory-chip testers, rose 3.6 percent to 1,275 yen in Tokyo.
Average prices of the benchmark dynamic random access memory, or DRAM, jumped 27 percent yesterday, the most since November 2007, according to Dramexchange Technology Inc., Asia's largest spot market for the chips. Germany-based Qimonda AG's insolvency filing last month raised expectations a glut will ease.
Mitsui O.S.K., operator of Japan's largest fleet of iron- ore ships, rose 5.9 percent to 590 yen in Tokyo after the Baltic Dry Index advanced 2.7 percent yesterday in London, its 10th day of gains. Nippon Yusen K.K., Japan's largest shipping line by sales, added 4.7 percent to 467 yen.
Incitec tumbled 30 percent in Sydney to A$1.78 on its profit forecast. Shionogi, the maker of the Crestor cholesterol pill, lost 4.2 percent to 1,770 yen in Tokyo. The stock slumped 4.7 percent yesterday after the company cut its full-year profit forecast by 45 percent on costs related to an acquisition.
