30 Apr 2009
April 30 (Bloomberg) -- Asian stocks rose, with the MSCI World Index set for its best month in two decades, as better- than-expected Japanese production and U.S. consumer spending fueled optimism the global economy is recovering.Canon Inc., which gets almost a third of its sales from the Americas, surged 7.2 percent in Tokyo. Honda Motor Co. leapt 9 percent, after forecasting a profit for the current year on optimism the U.S. car market may recover. Far EasTone Telecommunications Co. led a 6.8 percent rally by Taiwan's Taiex Index after China said it will allow companies to invest in businesses on the island.
"All the things are in place for the bear market to have ended," Anthony Bolton, president of investments at Fidelity International, told Bloomberg Television in Hong Kong. "We're going to see a slow economic upturn, but that's enough for the stock market. If you wait for things to get better, you'll miss the rally."
The MSCI Asia Pacific Index climbed 3.3 percent to 91.01 as of 2:13 p.m. in Tokyo. The gauge has risen 12 percent in April, poised for the best monthly performance since October 1998. All markets open in Asia advanced today. The MSCI World Index climbed 11 percent this month, the most since July 1989 when the U.S. Federal Reserve cut interest rates twice.
The Nikkei 225 Stock Average surged 3.9 percent today in Japan, where stock markets resumed trading after a holiday yesterday. Semiconductor equipment maker Tokyo Electron Ltd. jumped 8.3 percent after reporting earnings above its forecast, while auto-parts supplier Stanley Electric Co. soared 17 percent as Nomura Holdings Inc. raised the shares to "buy."
First 100 Days
Hong Kong's Hang Seng Index climbed 2.3 percent. Australia's S&P/ASX 200 Index rose 2.5 percent, led by Westfield Group, the world's biggest shopping center owner by market value, after the company reported an increase in sales.
Futures on the U.S. Standard & Poor's 500 Index added 0.4 percent, paring earlier gains after the Wall Street Journal said Chrysler LLC's talks with the Treasury department to avoid bankruptcy broke down. The S&P 500 rose 2.2 percent yesterday as a government report showed consumer spending grew at the fastest pace in two years last quarter.
The U.S. doesn't need a second fiscal stimulus package, said former Federal Reserve Chairman Paul Volcker, one of President Barack Obama's top economic advisers. The European Commission yesterday said executive and consumer confidence in the region rose in April for the first time in 11 months.
A Japanese government report showed today that the country's industrial output rose for the first time in six months and at twice the pace predicted by economists, adding to evidence the worst of the global recession may be over.
China Investments
Canon, the world's largest maker of digital cameras, jumped 7.2 percent to 2,980 yen. Japanese exporters also rose as a weaker local currency boosts the value of overseas sales for Japanese businesses. The yen weakened against the dollar to as much as 97.86 from a one-month high of 95.63 on April 28.
Honda, which sells about 42 percent of its cars in North America, climbed 9 percent to 2,835 yen. The company expects operating profit of 10 billion yen ($103 million) this fiscal year. Honda posted a loss for the quarter ended last month, in part because of the stronger yen.
"The most important point is that the worst period has already past," said Masayuki Kubota, who oversees the equivalent of $1.9 billion in assets in Tokyo at Daiwa SB Investments Ltd. "I'm attending many results briefings of Japanese companies and while they say they can't be too optimistic, they're sure the worst is over."
Rising Valuations
Gains by Nissan Motor Co. and Isuzu Motors Ltd. helped consumer-related companies post the biggest advance of the MSCI Asia Pacific Index's 10 industry groups this month. Finance companies were the best performers on the MSCI World in that time as Goldman Sachs Group Inc. and Credit Suisse Group AG reported better-than-estimated earnings.
In the U.S., 68 percent of S&P 500 companies that released first-quarter results have beaten estimates, according to data compiled by Bloomberg. Profit estimates for companies on the MSCI Asia Pacific started to climb this month after falling for the previous 11 months, Bloomberg data show.
Average company valuations on the MSCI gauge rose to 20 times reported profit as of yesterday, the highest since June 29, 2004, data compiled by Bloomberg show.
Taiwan's Far EasTone jumped 7 percent to NT$37.65 as China Mobile Ltd. agreed to buy a 12 percent stake. Taiwan Semiconductor Manufacturing Co., the world's largest contract manufacturer of chips, gained 7 percent to NT$55.20.
‘Big Icebreaker'
Chinese companies will be allowed to buy stakes in Taiwan's industries from May 1, according to the Chinese Ministry of Commerce, as the two economies take another step to enhance trade and economic exchange.
Ties between China and Taiwan have improved since the Kuomintang party's Ma Ying-jeou became president in May and dropped the pro-independence stance of his predecessor Chen Shui-bian.
"This is a political spring and big icebreaker for further deals," said Roger Groebli, Singapore-based head of financial market analysis at LGT Capital Management, which oversees $80 billion worldwide. "There are a lot of Taiwanese companies that Chinese investors could be interested in."
Tokyo Electron, the world's second-largest supplier of semiconductor production equipment, gained 8.3 percent to 4,460 yen after saying in a preliminary earnings statement that net income was eight-fold higher than its forecast.
Government Stimulus
Stanley Electric rallied 17 percent to 1,390 yen after Takashi Moriwaki at Nomura lifted the stock to "buy" on the view that the company's cost-cutting efforts will pay off with improved profitability.
Westfield gained 0.9 percent to A$10.69. The company said first-quarter revenue at Australian shopping malls rose 1.5 percent from the previous year.
"We're not falling off the edge of the cliff any more," said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which holds about $90 billion in assets. "You'd hope to get a response after the amount of policy stimulus that we've had. That now looks like it's happening."
