Asian Stocks Rebound From 3-Year Low; Macquarie, Nomura Surge

By Kyung Bok Cho and Shani Raja

Sept. 19 (Bloomberg) -- Asian stocks gained, led by banks, on speculation governments will take steps to shore up financial companies to prevent more failures.

Macquarie Group Ltd., Australia's largest investment bank, surged 29 percent, more than recovering yesterday's record loss after U.S. Senator Charles Schumer proposed a new agency to pump capital into financial companies. U.S. and U.K. regulators said they may regulate short selling. Nomura Holdings Inc., Japan's biggest brokerage, rose 6.4 percent.

``This would go a long way towards solving the problem if done in a timely fashion,'' said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. ``It would cut out the cancer of bad debt, and therefore has the potential to draw a line under the recent turmoil.''

The MSCI Asia Pacific Index added 1.1 percent to 109.34 as of 9:11 p.m. in Tokyo. The measure closed yesterday at the lowest since Oct. 28, 2005. Financial companies accounted for two-fifths of the index's gain.

Japan's Nikkei 225 Stock Average advanced 2.5 percent to 11,777.71. Benchmark indexes in South Korea and Australia rose more than 2 percent.

U.S. stocks rallied the most in six years yesterday, with the Standard & Poor's 500 Index climbing 4.3 percent and rebounding from its lowest level since May 2005. The agency that Schumer proposed will pump capital into financial companies in exchange for equity stakes and pledges to rewrite mortgages and make them more affordable.

Momentum Building

Schumer's remarks indicate momentum is building for some wider plan after the Fed and Treasury's takeovers of Fannie Mae, Freddie Mac and American International Group Inc. this month.

The U.S. Securities and Exchange Commission said it may require hedge funds to disclose short-sale positions, while the Financial Services Authority in the U.K. prohibited short selling financial shares for the rest of the year. The three biggest U.S. pension funds, including the California Public Employees' Retirement System, decided to stop lending shares for short sales.

National Australia Bank, the nation's biggest by assets, gained 9.2 percent, the most since May 1988.

To contact the reporters for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net