Asian Stocks Gain as Bargains Emerge; BHP, Sumitomo Mitsui Rise

By Kyung Bok Cho and Patrick Rial

Nov. 14 (Bloomberg) -- Asian stocks rose as investors snapped up shares trading near the cheapest valuations on record and on optimism a financial summit this weekend will produce policies to stabilize markets.

BHP Billiton Ltd., which trades at less than 5 times estimated earnings, climbed 6.5 percent after oil prices rebounded from the lowest level since January 2007. Sumitomo Mitsui Financial Group Inc. and Woori Finance Holdings Co. gained more then 4 percent before an emergency meeting of world leaders to deal with the financial crisis.

``Expectations have been fairly low for the summit, but investors are looking at the possibility that some concrete policy will emerge,'' Soichiro Monji, chief strategist at Tokyo- based Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television.

The MSCI Asia Pacific Index added 2.5 percent to 84.32 at 9:25 a.m. in Tokyo, set for a 1.8 percent drop this week. Japan's Nikkei 225 Stock Average gained 4.1 percent to 8,578.52 and stocks also advanced in Australia and South Korea.

Futures on the Standard & Poor's 500 Index slid 0.2 percent. U.S. stocks rose yesterday, with the S&P 500 advancing in the final hour of trading to close 6.9 percent higher as the rebound in oil prices boosted shares including Exxon Mobil Corp.

Shares on the MSCI Asia Index are valued at 10 times trailing earnings, and fell to as low as 8.2 times last month. Prior to the current market turmoil, it had never dropped below 10, according to Bloomberg data back to 1995. The gauge has lost more than half its value since a peak in November 2007.

Emergency Meeting

The collapse of the U.S. mortgage market sparked $950 billion in losses and writedowns at financial companies and now threatens a global economic recession. The International Monetary Fund said on Nov. 7 the U.S., euro zone and Japan may contract simultaneously for the first time in the post-World War II era.

Leaders from the Group of 20 nations will begin a summit in Washington later today to coordinate government responses to the worst financial crisis in 80 years. European leaders including French President Nicolas Sarkozy and British Prime Minister Gordon Brown have called for restructuring the international regulatory system.

Crude oil climbed 3.7 percent to $58.24 a barrel yesterday in New York after a U.S. government report showed a smaller-than- expected supply increase and refiners cut operating rates.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.