Asian Stocks Gain for Third Day, Led by Commodities, Cosco

By Patrick Rial and Chua Kong Ho

Dec. 9 (Bloomberg) -- Asian stocks rose for a third day, led by commodity producers and shipping lines, on expectations stimulus plans from the U.S. to India will buoy the global economy and prevent earnings from tumbling.

BHP Billiton Ltd. rose 4.5 percent in Sydney, while China Cosco Holdings Co., the largest operator of iron-ore and coal ships, surged 12 percent in Hong Kong. Singapore and Indonesian stock markets jumped more than 4 percent after being shut yesterday, when plans by U.S. President-elect Barack Obama to boost growth led the MSCI World Index to a 5.5 percent advance. Gains were limited as Japan’s economy contracted more than estimated predicted and China’s exports shrank.

“Investors are anticipating the positive impact of the various stimulus plans,” said Mark Tan, who helps oversee $3 billion in Asian equities at UOB Asset Management in Singapore. “This remains a bear market rally. Once poor economic data comes out and companies cut earnings, we could see markets falling.”

The MSCI Asia Pacific Index added 0.8 percent to 83.78 as of 3:54 p.m. in Tokyo. About 10 stocks gained for every seven that fell. The gauge, up 11 percent from its Nov. 20 low, retreated 47 percent this year and is set for the worst annual performance in its 20-year history. Companies in the index are valued at an average 12 times estimated profit, about a quarter below the level at the start of 2008.

Japan’s Nikkei 225 Stock Average rose 0.8 percent to 8,395.87. Nomura Holdings Inc. led gains after people familiar with the situation said it will cut jobs in Asia. Sony Corp. climbed 3.9 percent before saying after the close it will reduce headcount by 8,000 and lower investment in electronics.

Avert Collapse

Decreased spending by businesses led Japan to revise its estimate of third-quarter growth to a 1.8 percent contraction, more than the 0.4 percent reported last month.

“We need to implement policies to prevent the economy from falling apart,” Economic and Fiscal Policy Minister Kaoru Yosano told reporters in Tokyo today. Prime Minister Taro Aso instructed his Cabinet to find ways to support workers who are losing their jobs.

Governments are stepping up measures to ward off the worst financial crisis since the Great Depression. Obama pledged to enact the biggest government spending program since the 1950s, while India cut interest rates and announced a $4 billion stimulus package. Hong Kong will provide $12.9 billion of loan guarantees to help businesses, Donald Tsang, the city’s chief executive, said late yesterday.

China’s CSI 300 Index fell 2.6 percent, led by Shanghai Mechanical & Electrical Industry Co., after an adviser to the country’s central bank said exports dropped last month and industrial-production growth cooled. India is closed for a holiday today.

U.S. Futures

Futures on the Standard & Poor’s 500 Index lost 0.6 percent. The gauge climbed 3.8 percent yesterday, extending its advance from an 11-year low last month to 21 percent.

Copper futures in New York added 9.1 percent, the most since Oct. 29, while crude oil surged 7.1 percent to $43.71 a barrel, breaking a six-day losing streak. Oil has dropped 70 percent from a record $147.27 on July 11.

BHP rose 4.5 percent to A$28.45. Mitsubishi Corp., Japan’s biggest trading house, gained 2.6 percent to 1,121 yen. Mitsui & Co., the second biggest, added 2.7 percent to 758 yen.

Mining and material companies are the worst performers this year among 10 industry groups on the MSCI Asia Pacific Index as the deepening global recession diminished demand for commodities.

China Cosco surged 12 percent to HK$6.01. MISC Bhd., owner of the world’s biggest fleet of liquefied natural gas vessels, rose 2.4 percent to 8.55 ringgit. Nippon Yusen K.K. jumped 6 percent to 496 yen after saying it will reduce its fleet expansion plan as slowing growth decreases shipping demand.

Rates Gain

The Baltic Dry Index, a measure of shipping costs for commodities, climbed 1.2 percent yesterday from a 22-year low, the gauge’s first advance in 14 days.

Nomura gained 13 percent to 715 yen. Japan’s biggest brokerage plans to eliminate more than 100 positions in Asia and is stepping up job cuts in Japan, two people familiar with the situation told Bloomberg News.

Commonwealth Bank of Australia fell 8.5 percent to A$30, leading declines among the nation’s lenders, after Westpac Banking Corp. said it may raise A$2.5 billion ($1.7 billion) through a share sale. Shares of Westpac, the country’s second- largest bank, are suspended from trading today.

Commonwealth Bank has the lowest Tier 1 capital among Australia’s biggest banks, raising speculation it may need to sell more shares, according to Angus Gluskie, who oversees $265 million at White Funds Management Pty in Sydney.

Fund Raising

The world’s biggest financial companies have raised almost $890 billion since the global credit crisis began last year, squeezing debt markets and slowing economies. That’s forcing lenders to bolster capital on expectations that bad loans and investment losses will rise further.

“There is a problem in rolling over financing so banks and companies have no recourse but to raise money through a more expensive form of capital,” said Prasad Patkar, who helps manage $800 million at Platypus Asset Management in Sydney.

T&D Holdings Inc. slumped 5.5 percent to 3,280 yen after the president of Japan’s biggest publicly traded life insurer said it may raise capital at its units in the fiscal second half as falling markets erode the value of stockholdings.

Sompo Japan Insurance Inc., the second-biggest listed property insurer by revenue, fell 5.7 percent to 510 yen after Macquarie Group Ltd. slashed its rating on the stock to “underperform,” citing potential for a writedown of credit instruments.

Shanghai Mechanical, the listed unit of China’s biggest manufacturer of power equipment, dropped 6.9 percent to 8.51 yuan.

“Things are not so good,” Fan Gang, the central bank adviser, said at a forum in Beijing. “November figures will come out soon, industrial growth will be something around 5 percent and export growth will be negative.”

Industrial-output growth of 5 percent would be the weakest since Bloomberg data began in 1999.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Chua Kong Ho in Shanghai at kchua6@bloomberg.net