01 Apr 2009
April 1 (Bloomberg) -- Asian stocks rose for the first time in three days on speculation Japanese and South Korean automakers will benefit from the possible bankruptcy of General Motors Corp. and Chrysler LLC.Honda Motor Co., which generates 51 percent of its sales in North America, climbed 6.3 percent in Tokyo and Hyundai Motor Co. added 6 percent in Seoul. President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for GM to restructure and is prepared to let Chrysler go bankrupt, people familiar with the matter said. Cnooc Ltd., China's largest offshore oil producer, jumped 3.9 percent.
"Less competition should help automakers expand market share, not just in the U.S., but all around the world," said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages $53 billion. "I expect the rally will continue for another month or two. Many economic figures are showing signs of improvement."
The MSCI Asia Pacific Index gained 1.6 percent to 82.20 as of 12:32 p.m. in Tokyo, following a two-day, 5.3 percent slump. The gauge rose 7.6 percent last month, its first advance in 2009, as some investors bet governments worldwide will succeed in easing the financial crisis and reviving global growth.
Japan's Nikkei 225 Stock Average rose 2 percent to 8,270.23. South Korea's Kospi Index climbed 2.1 percent. All markets advanced in Asia except New Zealand and the Philippines.
OneSteel Ltd., Australia's No. 2 steelmaker, slumped 5.8 percent after extending production cuts. Elpida Memory Inc., Japan's largest memory chipmaker, soared 15 percent after it was chosen to join Taiwan Memory Corp. in reorganizing the semiconductor industry.
Automaker Bankruptcies
Futures on the Standard & Poor's 500 Index slumped 1.3 percent, following the gauge's 1.3 percent rally yesterday. Futures accelerated declines as news of the U.S. government's plans for the automakers emerged.
Obama will let Chrysler go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can't form an alliance with Fiat SpA, said members of Congress who have been briefed on the subject and two other people familiar with the administration's deliberations.
Honda climbed 6.3 percent to 2,460 yen. Toyota Motor Corp., the world's largest automaker, jumped 4.2 percent to 3,250 yen. Hyundai Motor rose 5.2 percent to 58,400 won.
"People here are expecting GM and Chrysler won't survive long," said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. "The initial impact is probably big if they really go bankrupt."
Tankan Survey
U.S. March auto sales data due later today are expected to come in at an annualized rate of 8.8 million vehicles, which would be the lowest since December 1981, according to analysts in a Bloomberg News survey.
The MSCI Asia Pacific Index declined 9.7 percent last quarter amid growing signs the global recession is hurting corporate earnings. Stocks today shrugged off a report showing South Korean exports slumped for a fifth month in March and the Bank of Japan's quarterly Tankan survey, which was worse than economists predicted.
The Tankan, which tracks sentiment among large manufacturers fell to a record low of minus 58. Capital spending plans only dropped by half as much as economists had forecast and managers said they expect a rebound in profits later this year. Prime Minister Taro Aso said yesterday his administration will compile a third stimulus package by mid-April.
Quantity, Not Quality
"Though the Tankan report is awful, businesses are getting out of the worst period in terms of earnings," said Mitsubishi UFJ's Ishigane. "Governments including Japan are introducing a series of stimulus packages and what's important is not the quality of the plan but the quantity of money spent."
Cnooc jumped 3.9 percent to HK$7.98. Santos Ltd., Australia's No. 3 oil and gas producer, climbed 3.1 percent to A$17.37. Inpex Corp., Japan's largest oil explorer, rose 4.5 percent to 714,000 yen.
Crude oil for May delivery rose 2.6 percent to $49.66 a barrel in New York yesterday, capping an 11 percent gain over three months. A measure of six primary metals traded in London advanced 2.1 percent.
OneSteel slumped 5.8 percent to A$2.12 after saying output from its Sydney and Laverton electric-arc furnaces will be cut to 725,000 metric tons. That's deeper than the previously announced cut to 850,000 tons. BlueScope Steel Ltd., Australia's largest producer, dropped 3.1 percent to A$2.49.
Elpida soared 15 percent to 779 yen, the second-biggest gain in the MSCI World Index, after it beat U.S. rival Micron Technology Inc. for the partnership with Taiwan Memory, the memory-chip company set up by the government.
Powerchip Semiconductor Corp., Taiwan's largest memory-chip maker, climbed its daily 6.8 percent limit to NT$4.71. ProMOS Technologies Inc., the most unprofitable Taiwan memory-chip supplier, also surged 6.8 percent.
