03 Jun 2009
June 3 (Bloomberg) -- Asian stocks rose for a fourth- straight day, led by consumer companies and banks, as better- than-expected Australian economic growth and U.S. home sales fueled optimism the global recession is easing.Harvey Norman Holdings Ltd., Australia's biggest electronics retailer, climbed 7.7 percent and Westpac Banking Corp. gained 1.7 percent in Sydney as the country's economy unexpectedly expanded 0.4 percent in the first quarter. New World Development Co., a developer controlled by billionaire Cheng Yu- tung, gained 4.2 percent in Hong Kong after the city's housing sales jumped in May.
"There are encouraging signs that people are out there spending," said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. "The question is whether it's enough. The situation is still fairly precarious."
The MSCI Asia Pacific Index added 1.1 percent to 105.44 as of 1:26 p.m. in Tokyo, taking its four-day advance to 5.3 percent. The gauge has climbed 49 percent from a more than five- year low on March 9.
Hong Kong's Hang Seng Index climbed 2.3 percent, the most in the region. Australia's S&P/ASX 200 Index added 1 percent after the statistics bureau said first-quarter gross domestic product grew 0.4 percent from the previous quarter. The median estimate of 18 economists surveyed by Bloomberg was for a 0.2 percent decline.
Japan's Nikkei 225 Stock Average gained 0.4 percent, paced by Nissan Motor Co., which rose to an eight-month high on better-than-expected U.S. sales. South Korea's Kospi fell as Woori Finance Holdings Co. sank 5.3 percent on concern the company may sell shares. Taiwan's Prince Housing & Development Corp. and China Metal Products Co. slumped by the daily limit in Taipei after their offices were searched by prosecutors.
Previously Owned Homes
Futures on the U.S. Standard & Poor's 500 Index added 0.2 percent. The gauge rose 0.2 percent yesterday as optimism the housing market is improving outweighed concern share sales will dilute stockholder value. A report yesterday showed the number of Americans signing contracts to buy previously owned homes climbed 6.7 percent in April, more than forecast and the fourth increase in five months.
Harvey Norman climbed 7.7 percent to A$3.36. Westpac added 1.7 percent to A$19.08. Commonwealth Bank of Australia, the nation's largest by market value, gained 1.9 percent to A$37.03.
Australia, helped by record interest-rate cuts, government spending and cash handouts to consumers, is one of only a few economies including China and India that expanded last quarter. The Reserve Bank of Australia left its benchmark interest rate unchanged at 3 percent yesterday for a second month.
Global Recovery
Yesterday's U.S. data added to signs of a global recovery. A Chinese purchasing manager's index this week showed the country's manufacturing industry expanded for a third month. Japan's government last week raised its assessment of the economy for the first time in three years.
Developers in Hong Kong climbed after the Land Registry said the city's homes sales jumped 42 percent by volume in May, the biggest increase since February 2008.
New World Development gained 4.2 percent to HK$16.06. Sun Hung Kai Properties Ltd., the world's biggest developer by market value, jumped 2.6 percent to HK$100.20. Real-estate companies are the best-performing of the Hang Seng Index's four industry groups this year.
"This is the beginning of a recovery for the property market, and as long-term investors, we should start looking into the property sector," Anthony Ho, head of institutional investment at Fidelity International told Bloomberg Television.
Lower Market Share
Nissan, Japan's third-largest automaker, gained 1.2 percent to 601 yen, set to close at its highest since Oct. 3. The company's U.S. sales fell 33 percent in May, better than the 37 percent decline analysts expected.
Market share for Asian automakers slid to 45.6 percent last month, down 2.5 percentage points from a year earlier, according to Autodata Corp. It was the first drop since September 2008.
Woori Finance, South Korea's largest financial company, dropped 5.3 percent to 10,800 won. Spokesman Song Seung Hyun said yesterday the company is looking at ways to raise capital, including a sale of new shares.
KB Financial Group Inc., which controls South Korea's biggest bank, fell 3.3 percent to 41,600 won after spokesman Choi In Seok said the company is considering selling shares, among various measures for raising capital.
"Share sales raise concerns among existing shareholders about dilution of their stock value," said Kim Joo Hyoung, who helps manage the equivalent of $324 million in equities at KTB Asset Management Co. in Seoul. "The companies are seeking to raise capital while the markets are relatively better."
Rising Valuations
The rally since March drove the average valuation of companies on MSCI's Asian index to 1.4 times the book value of assets on May 29, an increase of 17 percent from the end of 2008. Developing-nation stock funds attracted $12 billion of assets in the four weeks through May 27, according to EPFR Global, which tracks investment flows worldwide.
In Taipei, Prince Housing fell 6.9 percent to NT$17.50, while China Metal plunged 7 percent to NT$37.5.
The companies will cooperate in the investigations, they said in separate stock exchange filings yesterday, without giving details of the probes. The Taiex Index lost 0.9 percent today, paring its advance in the past three months to 55 percent.
"Prince Housing and China Metal were searched by prosecutors yesterday and investors are using this as an excuse to take a breather," said Sam Hsieh, a Taipei-based fund manager at Fuh Hwa Investment Trust Co., who helps oversee the equivalent of $4.8 billion.
