Asian Stocks Gain for First Time in Five Days; Fujitsu Climbs

By Patrick Rial and Masaki Kondo

Jan. 14 (Bloomberg) -- Asian stocks gained for the first time in five days, as a rebound in oil boosted energy producers and technology companies rose on expectations mergers and cost- cutting measures will bolster profits.

Cnooc Ltd. rose 4.1 percent in Hong Kong as crude oil climbed for the first time in six days. Toshiba Corp. and Fujitsu Ltd., Japan’s No. 2 personal computer maker, gained more than 5 percent in Tokyo as the companies neared an agreement to combine their hard-disk drive businesses. Sony Corp. added 4.5 percent after Merrill Lynch & Co. raised its target price, saying the company’s planned job cuts may boost profitability. China’s CSI 300 Index jumped 4.2 percent on interest-rate cut speculation.

“Whether companies can turn around later this year depends largely on restructuring and cost cutting moves when the weather is stormy,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.1 billion.

The MSCI Asia Pacific Index advanced 1 percent to 86.71 as of 4:27 p.m. in Tokyo. About two stocks rose for each that dropped and all but one of the 10 industry groups increased.

The gauge slumped 7 percent during the previous four sessions amid growing concern the global recession will fuel losses for the region’s manufacturers. Analysts have slashed their earnings estimates for companies in MSCI’s Asian index by 40 percent from a peak in April, according to data compiled by Bloomberg.

Growth in the global economy will slow to 2.2 percent this year, a rate “equivalent to a global recession,” the International Monetary Fund said in November.

China Climbs

Japan’s Nikkei 225 Stock Average added 0.3 percent to 8,438.45, led by Sony. Shanghai Pudong Development Bank Co. paced gains in China, where the CSI 300 surged the most in six weeks. All other benchmark indexes rose apart from Malaysia, Taiwan and the Philippines.

The Standard & Poor’s 500 Index added 0.2 percent in the U.S. yesterday as investors bought up shares trading at low valuations and avoided industrial companies. Futures on the S&P rose 0.3 percent in trading today.

Crude oil for February delivery broke a five-day losing streak yesterday with a 0.5 percent gain in New York as Saudi Arabia Oil Minister Ali al-Naimi said his country will make deeper production cuts than previously announced. A measure of six metals traded in London climbed 2.6 percent, partially offsetting a 4.9 percent decline the previous day.

Cnooc advanced 4.1 percent to HK$7.17. Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 2.5 percent to A$35.65, snapping a four-day, 10 percent slump. Inpex Corp., Japan’s biggest oil explorer, added 5.3 percent to 678,000 yen. Jiangxi Copper Co., China’s second-biggest smelter, gained 5.7 percent to 12.51 yuan in Shanghai.

Technology Companies

Toshiba, Japan’s biggest chipmaker, rose 6 percent to 408 yen and Fujitsu added 5.3 percent to 415 yen. The two companies are in final talks about a hard-disk drive joint venture in which Toshiba would have a majority stake, according to four people familiar with the discussions. Fujitsu also plans to lower its earnings forecast, those people said.

Sony jumped 4.5 percent to 2,090 yen. Hitoshi Kuriyama, an analyst at Merrill in Tokyo, boosted his price estimate on the shares by 9.7 percent to 2,267 yen, citing the potential for job cuts to boost profitability. The stronger yen and weak demand will cause Sony to report its first operating loss in 14 years, the Nikkei newspaper said yesterday.

Other technology stocks gained. Hitachi Ltd., the world’s biggest maker of hard-disk drives used in notebook computers, rose 2.6 percent to 354 yen. Hitachi made buyout offers for two subsidiaries after the close of trading. Casio Computer Co., Japan’s largest maker of electronic dictionaries, soared 8.2 percent to 697 yen.

Rate Cuts Expected

In China, Pudong Bank gained 8.1 percent to 15.12 yuan on speculation the central bank will lower borrowing costs for a sixth time since September. China Vanke Co., the country’s largest publicly traded real-estate developer, advanced 4.9 percent to 6.89 yuan.

“The market is expecting a further easing of monetary policies from the government,” said Wu Kan, a fund manager in Shanghai at Dazhong Insurance Co., which oversees the equivalent of $285 million. The nation’s exports dropped the most in almost a decade in December as the global recession cut demand for Chinese goods.

Bank of China Ltd., the country’s third largest, rose 5.4 percent to HK$1.95 after Royal Bank of Scotland Plc sold 10.8 billion shares, according to people familiar with the situation, removing selling pressure on the stock.

HSBC Holdings Plc, Europe’s largest bank by market value, fell 4.3 percent to HK$69.90 in Hong Kong after Morgan Stanley analysts predicted it may have to raise as much as $30 billion and halve its dividend as earnings drop.

Bumiputra-Commerce

The collapse of the U.S. mortgage market helped trigger losses and writedowns of almost $1 trillion at global financial institutions.

Bumiputra-Commerce Holdings Bhd., Malaysia’s second-biggest bank by assets, plunged 5 percent to 6.65 ringgit after UBS AG downgraded the stock to “neutral,” saying the lender will likely have no loan growth due to the weak economy.

Wesfarmers Ltd., Australia’s No. 2 retailer, dropped 2.9 percent to A$16.99. The company said today it may cut its dividend this year after writing off about A$150 million ($100 million) in the first half as the value of investments and property declined.

In Japan, Sapporo Holdings Ltd. slumped 4.7 percent to 464 yen. Credit Suisse Group said Japan’s beer market will likely contract this year as the economy weakens and restaurant sales drop. Yoshiyasu Okihira, a Tokyo-based analyst at Credit Suisse, cut his recommendations on Asahi Breweries Ltd., Kirin Holdings Co., and Sapporo, Japan’s top three listed brewers.

Baltic Dry

Shipping companies climbed after the Baltic Dry Index, a measure of freight costs, rose 2.5 percent, a sixth consecutive gain. Cosco Corp Singapore Ltd., the shipbuilding and repair unit of China’s biggest shipping company, added 5.6 percent to 85 Singapore cents. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest bulk shipper, jumped 3.6 percent to 604 yen.

Lenovo Group Ltd., China’s biggest maker of personal computers, fell 9.5 percent to HK$1.52, the lowest since Sept. 1999, after Capital Research and Management Co. reduced its stake.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.