Asian Mining Stocks Advance, Led by BHP; China Mobile Declines

By Chen Shiyin and Ian C. Sayson

Aug. 28 (Bloomberg) -- Asian commodity stocks advanced as concern eased that an economic slump will curb raw-material demand, countering losses in phone and technology shares after analysts downgraded China Mobile Ltd. and Samsung Electronics Co.

BHP Billiton Ltd. added 2.1 percent after an unexpected rise in U.S. durable goods orders spurred gains in prices of copper and other metals. Cnooc Ltd. rose 4 percent after its earnings beat estimates. China Mobile, the world's No. 1 phone company by market value, dropped 4.9 percent after JPMorgan Chase & Co. said rising competition will curb growth. Samsung, Asia's biggest maker of chips and flat panels, lost 1.7 percent after Morgan Stanley said demand isn't improving.

``Resources have shown solid results, unwinding fears of a sharp slowdown in China,'' said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. ``Investors were previously concerned about a sharp weakness in China and global economy.''

The MSCI Asia Pacific Index climbed 0.2 percent to 123.02 as of 3:36 p.m. in Tokyo, extending yesterday's 0.4 percent advance. A measure tracking mining companies was the biggest contributor to gains among the gauge's 10 industry groups.

The regional index has dropped 22 percent this year as soaring inflation assailed global economies and the world's largest financial companies posted writedowns and credit losses of more than $500 billion.

Japan's Nikkei 225 Stock Average added 0.1 percent to 12,768.25, ending a two-day, 1 percent retreat. Canon Inc. fell after rival Ricoh Co. announced its largest acquisition, increasing concern that competition in the U.S. will intensify. The Karachi Stock Exchange 100 Index rose 0.4 percent as Pakistan set minimum stock prices to halt a six-day, 16 percent slump.

U.S. Rallies

U.S. stocks advanced yesterday after the Commerce Department said orders for goods meant to last several years rose 1.3 percent in July. Fannie Mae and Freddie Mac posted the biggest gains on the Standard & Poor's 500 Index after they sold $3 billion in debt at yields that suggest the U.S. mortgage-finance companies won't need a government bailout. S&P 500 Index futures fell 0.3 percent today.

BHP rose 86 cents to A$41.75, its highest close since July 2. Copper, which is used in air conditioners, cars, electronics and other durable items, climbed 0.8 percent yesterday in New York, while prices of platinum and palladium also increased.

Orders of primary metals gained 2.2 percent last month, the Commerce Department report showed.

``Demand seems to be still there and today there's no indication that it's weakening or slowing down,'' said Tim Barker, who helps manage more than $54 billion of assets at BT Financial Group in Sydney.

Rio Tinto

Rio Tinto Group, the world's third-largest mining company, added 1.2 percent to A$126.50. Nippon Mining Holdings Inc., Japan's biggest copper producer, gained 2.1 percent to 595 yen.

Cnooc rose 46 cents to HK$12.08 in Hong Kong after the oil explorer said first-half profit jumped 89 percent to a record 27.54 billion yuan ($4 billion). That topped the median profit estimate of a 22.1 billion yuan in a Bloomberg survey of analysts.

Woodside Petroleum Ltd., Australia's second-largest oil and gas explorer, rallied 4.7 percent to A$61.17, its highest close since July 15. Crude oil for October delivery added 1.6 percent to $118.15 yesterday in New York.

China Mobile tumbled HK$4.70 to HK$91.85 in Hong Kong after JPMorgan cut its rating to ``underweight'' from ``overweight,'' saying that competitors are expanding their networks and introducing plans for third-generation mobile-phone services.

`Hard Landing'

Morgan Stanley cut its rating on Samsung to ``equal-weight'' from ``overweight,'' saying that it expects a ``hard landing'' for liquid-crystal displays and that the dynamic random access memory industry isn't improving.

Samsung lost 9,000 won to 521,000. Elpida Memory Inc., Japan's No. 1 maker of computer memory chips, declined 4.4 percent to 2,385 yen.

Hon Hai Precision Industry Co., the world's largest contract manufacturer of handsets, plunged 5 percent to NT$162.50 in Taipei. Its 72 percent-owned mobile phone unit Foxconn International Holdings Ltd. post a 56 percent drop in first-half profit yesterday.

In Tokyo, Canon dropped 5.2 percent to 4,790, its largest retreat since March 3. The world's largest office-equipment maker has lost about 50 percent of its U.S. sales network as the distributors have been bought by printer makers.

Ricoh advanced 2.9 percent to 1,777 yen on speculation the purchase of Ikon Office Solutions Inc. will help the company grab U.S. market share from Canon. Its $1.62 billion cash offer for the Malvern, Pennsylvania-based company will be the largest acquisition for Ricoh.

Esprit Plunges

Esprit Holdings Ltd. plunged 18 percent to HK$66.10 in Hong Kong, the biggest drop on MSCI's Asian index, after saying net income grew 13 percent in the second half, the weakest expansion since the clothing retailer joined Hong Kong's benchmark Hang Seng Index in 2002.

Acom Co., Japan's biggest consumer lender by market value, was the second-biggest gainer on the regional stock index, surging 8.8 percent to 3,090 yen. Mitsubishi UFJ Financial Group Inc., the nation's largest bank by market value, will spend 140 billion yen ($1.28 billion) to boost its stake in Acom to 40 percent from 15 percent, the Mainichi newspaper reported, without saying where it obtained the information.

The companies said in separate statements today that no decision has been made.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net.