Asian Stocks Rise, Led by Commodity Producers; BHP, Inpex Gain

By Kyung Bok Cho and Shani Raja

Nov. 14 (Bloomberg) -- Asian stocks rose, paring a weekly decline, as commodity producers climbed after oil and metal prices rallied and investors snapped up shares trading near the cheapest valuations on record.

BHP Billiton Ltd. jumped 5.6 percent in Sydney after oil prices rebounded and nickel and zinc prices advanced. Inpex Corp. climbed 9.2 percent in Tokyo after winning rights to explore an Indonesian oil field and as Asian energy shares traded at their cheapest relative to the region's equities in 17 months. United Microelectronics Corp., the world's second-largest maker of custom chips, surged by the 6.9 percent limit in Taipei on speculation it may buy Chartered Semiconductor Manufacturing Ltd.

The MSCI Asia Pacific Index added 0.8 percent to 82.93 at 4:56 p.m. in Tokyo, snapping a three-day, 8.8 percent slump. Nine of the 10 industry gauges advanced, with energy companies climbing 2.2 percent.

``Valuations for some of the energy stocks just seemed too compelling and some people jumped in,'' said Hans Kunnen, head of investment market research at Colonial First State Global Management, which manages $128 billion. ``The volatility still has me worried. Make sure you've got some good companies with good long-term futures and ride the storm out.''

The index is set to lose 4.9 percent this week on mounting evidence economies are slowing. China's industrial output missed estimates and Australian business confidence fell to a record low, while Fitch Ratings cut its outlook on South Korean banks. In the U.S., the Treasury scrapped plans to buy mortgage assets to focus on supporting consumer credit.

Valuations

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.

Shares on the MSCI 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 never dropped below 10, according to Bloomberg data dating back to 1995. The gauge has lost more than half its value since the peak in November 2007.

``I've been telling our clients that just looking at valuations you can see that the declines are excessive,'' said Seiji Iwama, a Tokyo-based fund manager at Daiwa SB Investments Ltd., which manages $53 billion. ``Even if we don't get profits returning to record levels, a normal recovery should bring a major recovery for the stock market.''

Japan's Nikkei 225 Stock Average gained 2.7 percent to 8,462.39. Nintendo Co. led the advance after sales of its Wii console jumped in the U.S.

China's CSI 300 Index rose 3.7 percent, led by China Vanke Co., on speculation banks relaxed mortgage lending approvals. The gauge jumped 16 percent this week, the most since April, after the government announced a 4 trillion yuan ($586 billion) plan to boost the slowing economy.

U.S. Futures

Futures on the Standard & Poor's 500 Index slid 0.6 percent. The S&P 500 advancing in the final hour of trading yesterday to close 6.9 percent higher as the rebound in oil prices boosted shares including Exxon Mobil Corp.

Crude oil added 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. A measure of six metals traded on the London Metal Exchange gained yesterday for the first time in three days as zinc rose 4.9 percent and nickel 9.1 percent.

BHP, the world's biggest mining company and Australia's largest oil producer, added 5.6 percent to A$26.40, snapping a three-day, 16 percent drop. Cnooc Ltd., China's biggest offshore oil producer, jumped 6.4 percent to HK$6.12 in Hong Kong.

Inpex climbed 9.2 percent to 498,000 yen. The Tokyo-based company and its partners won rights to explore the Semai II block off the coast of West Papua province, Inpex said yesterday.

Price Report

Takeover speculation drove United Microelectronics 6.9 percent higher to NT$8.35, after its U.S.-traded shares jumped 39 percent overnight. Chartered Semiconductor jumped 7.1 percent to 22.5 Singapore cents, paring its annual decline to 77 percent.

``There has been lots of speculation in the market'' about an acquisition, said Kenneth Lee, a technology analyst at Primasia Securities Ltd. in Taipei. ``It's quite possible that United Microelectronics will buy Charter, given its strong cash flow.''

``We don't comment on rumors,'' Alex Hinnawi, a spokesman at United Microelectronics said by phone. Chartered spokeswoman Celestine Lim couldn't immediately be reached for comment.

Nintendo, the world's largest maker of handheld video-game consoles, advanced 5.8 percent to 30,200 yen in Osaka, snapping a six-day, 21 percent slump. U.S. sales of the company's Wii console increased 55 percent in October, New York-based NPD Group Inc. said yesterday.

China Developers

China Vanke, the nation's biggest listed property developer, rose 2.6 percent to 6.82 yuan. Gemdale Corp., a builder allied with ING Groep NV, advanced 5.4 percent to 6.25 yuan. Chinese banks relaxed requirements for mortgage lending approvals as the government seeks to stabilize the country's property market, the Standard newspaper reported from Hong Kong.

In Seoul, Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest maker of ships, gained by the daily limit of 15 percent to 15,650 won, the biggest percentage advance on MSCI's Asian Index. Korea Development Bank and Hanwha Group signed a preliminary agreement on the sale of a 50.4 percent stake in the company.

The global slowdown led some companies to cut earnings forecasts, triggering declines in the shares. Yakult Honsha Co., the maker of Japan's best-selling fermented-milk drink, plunged 14 percent to 1,996 yen, the most since January 2000, after it cut its annual guidance by 26 percent.

Ulvac Inc., a Japanese solar-battery equipment maker, lost 11 percent to 1,343 yen, the lowest close since its listing in April 2004. The company slashed its full-year net income forecast to 100 million yen ($1 million), from 7.4 billion yen.

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