05 May 2009
May 5 (Bloomberg) -- Asian stocks rose, extending a rally in which global equities have wiped out their 2009 losses, as better-than-expected U.S. home sales added to signs the worst of the global recession has passed.Fisher & Paykel Appliances Holdings Ltd., which gets 25 percent of its sales from North America, surged 12 percent in Wellington. BHP Billiton Ltd., the world's biggest mining company, rose 2.4 percent after copper and crude oil prices rallied in New York yesterday. Yuanta Financial Holding Co., owner of Taiwan's biggest brokerage, gained 7 percent after Goldman Sachs Group Inc. recommended investors "buy" the stock.
"People are realizing that, although things aren't wonderful, the rate of decline is slowing," said Montana-based Don Gimbel, who helps manage $2 billion of international equities at Carret & Co. "There is the anticipation that over the next 18 months things are going to get better."
The MSCI AC Asia Pacific excluding Japan Index rose 0.3 percent to 296.76 as of 12:53 p.m. in Hong Kong. The gauge has surged 42 percent in the past two months on optimism the worst of the financial crisis had passed. The MSCI World Index added 0.2 percent, leaving it up 0.3 percent for the year.
Markets in Japan, South Korea and Thailand are closed today. Taiwan's Taiex Index gained 0.2 percent, adding to a three-day, 13 percent surge on optimism closer ties with China will boost economic growth. Australia's S&P/ASX 200 Index added 0.4 percent as the central bank left interest rates unchanged.
Home Sales
Hon Hai Precision Industry Co., the world's largest electronic contract manufacturer, jumped 6.9 percent as JPMorgan Chase & Co. raised its share-price target. Gloucester Coal Ltd., an Australian producer of the fuel, rallied 8.3 percent after receiving a higher takeover offer from Hong Kong-based commodity supplier Noble Group Ltd. Li & Fung Ltd., a Hong Kong trading company, slumped 7.9 percent on a share sale.
U.S. Standard & Poor's 500 Index futures lost 0.3 percent. The gauge climbed 3.4 percent yesterday, erasing its declines for the year as the National Association of Realtors said purchases of previously owned homes jumped 3.2 percent in March. Economists in a Bloomberg survey projected no change.
"Asia is well-positioned and there is a pickup in consumption in the U.S.," said Mark Konyn, chief executive officer of RCM Asia Pacific Ltd., which manages $11 billion. "There's a pickup in sentiment. It's Asia that will benefit."
Interest Rates
Fisher & Paykel, which makes washers and dryers, surged 12 percent to 57 New Zealand cents. James Hardie Industries NV, the biggest seller of home siding in the U.S., climbed 7.3 percent to A$5.01.
BHP gained 2.4 percent to A$34.62. Rio Tinto Group, the world's third-biggest mining company, climbed 4.1 percent to A$70.03. Woodside Petroleum Ltd., Australia's second-largest oil producer, added 3.4 percent to A$41.88.
Copper futures rose 2.1 percent to a two-week high, in New York yesterday, while oil climbed 2.4 percent to a five-month high on expectations commodities demand will improve as global growth recovers.
The MSCI Asia Pacific Index, which includes Japan, rallied 29 percent in the past two months on optimism government stimulus packages and interest-rate cuts will pull the global economy out of recession. Australia's central bank left borrowing costs unchanged today at the lowest rates in 49 years.
Brokerage Upgrades
A government report on April 30 showed Japan's industrial production rose in March for the first time in six months and at twice the pace estimated by economists. The CLSA China Purchasing Managers' Index rose in April, the first gain in nine months, CLSA Asia Pacific Markets said yesterday.
"Confidence has returned with the growing belief that the worst is behind us," said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney. "It's still a long road to recovery, however."
Yuanta Financial soared 7 percent to NT$22.2. Goldman Sachs Group Inc. upgraded the stock to "buy" from "neutral" and raised its share-price target by 37 percent to NT$26. The brokerage also upgraded its rating for the Taiwanese stock broking industry to "neutral" from "cautious" amid rising stock market turnover.
Hon Hai, which gets 38 percent of its revenue from America, climbed 6.9 percent to NT$109 in Taipei. JPMorgan raised its share-price target to NT$110 from NT$58. Hon Hai said yesterday it boosted its workforce by 5 percent in the last quarter as orders for mobile phones and computers rebounded.
China Investors
Farglory Land Development Co., Taiwan's largest construction company, gained 7 percent to NT$48.35 and Cathay Real Estate Development Co., the second-largest, added 7 to NT$11.50.
Taiwan may allow investors from mainland China to buy real estate on the island, the Economic Daily News reported. Rules that may be issued within two weeks may permit mainland investors to acquire offices, factories and housing for employees, while speculative investing won't be allowed, the newspaper said.
Gloucester Coal climbed 8.3 percent to A$5.86. The company said it's considering an increased takeover offer from Noble Group and advised shareholders to take no action pending a further statement.
Li & Fung, which sells goods to Wal-Mart Stores Inc. and Target Corp., slumped 7.9 percent to HK$22.10. The company will sell 120.3 million shares at HK$22.55 each to finance potential acquisitions and strengthen its balance sheet.
