By Chua Kong Ho and Ian C. Sayson
Dec. 8 (Bloomberg) -- Asian stocks and U.S. futures rose as U.S. President-elect Barack Obama pledged the biggest public works program in about 50 years and India cut interest rates.
Komatsu Ltd., the world’s No. 2 maker of construction machinery, rose 11 percent after Obama planned the largest spending package since President Dwight D. Eisenhower created the interstate highway system. India’s Housing Development Finance Corp. added 7.1 percent on a $4 billion government stimulus plan. Hong Kong Exchanges & Clearing Ltd. surged 16 percent after a government official said a plan that permits Chinese nationals to buy the city’s shares is still on track.
“Governments, not only the U.S., must spend to replace the growth that will be lost from weak consumer spending,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila, which has more than $6 billion in trust assets under management. “Investors have been waiting for this kind of stimulus to cushion the effects of a global slowdown.”
The MSCI Asia Pacific Index gained 4.6 percent to 83.18 as of 5:21 p.m. in Tokyo, the most since Oct. 30. About 13 stocks rose for each that fell. The gauge lost 3.8 percent last week as commodity prices slumped amid signs the global recession is deepening. The index is valued at 12 times estimated profit, almost a third below its level at the start of 2008.
Japan’s Nikkei 225 Stock Average advanced 5.2 percent to 8,329.05. China’s CSI 300 Index advanced 4.1 percent, a sixth- straight gain and its longest winning streak this year, amid optimism an annual government economic conference that starts today will spur measures to stimulate growth.
Government Support Measures
Hong Kong’s Hang Seng Index surged 8.7 percent, while South Korea’s Kospi Index climbed 7.5 percent. Australia’s S&P/ASX 200 Index jumped 4.1 percent, led by Santos Ltd., the country’s third-biggest oil and gas producer, on takeover speculation. Most markets in the region advanced, with Singapore, Indonesia and Malaysia closed for public holidays.
Governments worldwide have introduced measures this year to buttress their economies from the worst financial crisis since the Great Depression. The MSCI World Index has lost 45 percent in 2008, wiping out more than $30 trillion in value as the U.S., Japan and Europe entered recession. The MSCI Asia Pacific Index slumped 47 percent in that time.
Australia will start making one-time payments to families and pensioners as part of its $6.8 billion stimulus package from today, ministers said. In Beijing, Chinese leaders may decide to cut personal income taxes at this week’s economic conference, Daiwa Institute of Research’s Kevin Lai said.
Futures on the Standard & Poor’s 500 Index climbed 2.6 percent. The stock gauge rose 3.7 percent on Dec. 5 as insurer Hartford Financial Services Group Inc. increased its profit forecast and said it’s weathering the credit turmoil.
U.S. Stimulus
Komatsu, which counts the Americas as its biggest overseas market, jumped by its daily limit of 100 yen to 1,007, snapping a five-day, 21 percent decline. Westfield Group, the shopping center owner that derived 39 percent of its 2007 sales from the U.S., climbed 4 percent to A$13.75.
Obama said on Dec. 6 he will boost investment in roads, bridges and public buildings to create and preserve 2.5 million jobs. Reports last week showed U.S. companies cut payrolls at the fastest pace in 34 years, with the unemployment rate rising to the highest level since 1993.
“At the moment governments are the only ones feeding cash into the system,” said Masaru Hamasaki, who helps oversee about $3.3 billion at Toyota Asset Management Co. in Tokyo. “It’s a fair bet to say the policies of the U.S. will support demand.”
‘Through Train’
Housing Development, India’s biggest mortgage lender, rose 7.1 percent to 1,532 rupees. Reliance Industries Ltd., the country’s largest non-state company, gained 2 percent to 1,144.5 rupees. The Reserve Bank of India cut its repurchase rate to 6.5 percent from 7.5 percent on Dec. 6. The government said yesterday it will spend an extra 200 billion rupees ($4 billion) in the year ending March 31.
Hong Kong Exchanges, which manages Asia’s third-largest bourse, surged 16 percent to HK$71.50. China Overseas Land & Investment Ltd., the Hong Kong-listed developer controlled by China’s construction ministry, jumped 15 percent to HK$12.42.
China’s so-called “through train” plan that allows the country’s citizens to buy Hong Kong stocks is “something that will come,” Hong Kong Financial Secretary John Tsang said at a forum in the city.
Chinese banks advanced after the China Securities Journal reported on Dec. 5 that the government is considering cutting the business tax imposed on banks’ revenue to 3 percent from the current 5 percent.
Industrial & Commercial Bank of China Ltd., the nation’s largest bank, climbed 7.4 percent to HK$4.37 in Hong Kong. China Construction Bank Corp., the No. 2 lender, added 10 percent to HK$4.85, while Bank of China Ltd. rose 9.8 percent to HK$2.58.
Bond Risk
In Japan, Mizuho Financial Group Inc. added 3.6 percent to 218,300 yen. Sumitomo Mitsui Financial Group Inc. gained 2.4 percent to 303,000 yen. Loans, excluding those by credit associations, rose 3.6 percent in November from a year earlier after growing 2.3 percent in October, the Bank of Japan said today.
Lenders also advanced as the cost to protect Australian and Japanese bonds against default declined. Commonwealth Bank of Australia climbed 6.2 percent to A$32.80. National Australia Bank Ltd. added 5.8 percent to A$20.96.
The Markit iTraxx Japan index fell 3 basis points to 370 in Tokyo, according to prices from Credit Suisse Group. The Markit iTraxx Australia index was quoted 10 basis points lower at 390 basis points, Citigroup Inc. data show. A hundred basis points make up one percentage point.
Takeover Speculation
Santos gained 9.1 percent to A$13.25, snapping a five-day losing streak. China National Petroleum Corp., the parent of Hong Kong-listed PetroChina Co., is considering linking with a partner to bid for Santos, the South China Morning Post said.
The report was “pure speculation,” Santos said in a statement. Liu Weijiang, a spokesman for China National Petroleum, didn’t immediately answer calls seeking comment.
Aeon Co., Japan’s largest supermarket operator, jumped 6.2 percent to 879 yen, the most since Nov. 10. Mitsubishi Corp., Japan’s biggest trading house, will purchase a stake of about 5 percent in Aeon and form an alliance to buy and distribute goods and open stores, two people familiar with the matter said Dec. 6.
To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net.
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