Asian Stocks Advance, Paring Worst Start to Year Since 1990

By Shani Raja

Feb. 27 (Bloomberg) -- Asian stocks rose, helping the regional benchmark index pare its worst start to a year since 1990, as brokerages upgraded technology companies and a weaker yen boosted Japanese exporters’ earnings prospects.

LG Display Co., the world’s second-largest maker of liquid crystal displays, jumped 5.3 percent after Goldman, Sachs & Co. raised its share-price target. Game maker Nintendo Co. added 3.1 percent in Osaka as the yen traded at the weakest in more than three months against the dollar. Woolworths Ltd., Australia’s biggest retailer, lost 4.4 percent on lower-than-expected profit. The MSCI Asia Pacific Index’s 50 percent drop in the past year has cut price-to-equity ratios by 13 percent.

“There are bright spots and some valuations are tempting,” said Tim Schroeder, who helps manage about $2.6 billion at Pengana Capital Ltd. in Melbourne. “But the outlook is not rosy. There’s a great degree of uncertainty about the future.”

MSCI’s Asia Pacific measure rose 1.2 percent to 75.45 as of 1:28 p.m. in Tokyo, narrowing its February drop to 7.1 percent and its 2009 decline to 16 percent. Stocks have fallen as the global recession battered earnings at companies from Toyota Motor Corp. to BHP Billiton.

The Nikkei 225 Stock Average climbed 1.3 percent to 7,555.95, paring its drop this month to 3.8 percent. South Korea’s Kospi Index rose 1.9 percent.

Telstra Corp., Australia’s biggest phone company, lost 3.3 percent as Citigroup Inc. recommended investors sell the stock. QBE Insurance Group Ltd., the country’s No. 1 property and casualty insurer, slumped 4.2 percent after posting second- half earnings that were unchanged from a year earlier. Kubota Corp., Asia’s largest tractor maker, slumped 2.7 percent in Tokyo after saying it may cut its dividend payment.

Obama Budget

Futures on the U.S. Standard & Poor’s 500 Index added 0.3 percent, following the gauge’s 1.6 percent decline yesterday. President Barack Obama delivered his first budget to Congress yesterday, which seeks standby authority for as much as $750 billion in new aid to the financial industry while laying plans for a health-care system overhaul.

Governments worldwide including the U.S., China and Australia have this year sought to introduce measures to ease the financial crisis. The Obama administration may require Citigroup Inc. to raise private capital and make changes to its board of directors as part of an effort to strengthen the bank, according to people familiar with the matter.

LG Display climbed 5.3 percent to 25,850 won. Goldman, Sachs & Co. raised its share-price target by 15 percent to 29,500 won, saying panel prices are continuing their rebound in February.

Weaker Yen

Panasonic Corp., the world’s largest consumer-electronics maker, rose 2.5 percent to 1,166 yen. The stock was upgraded to ‘outperform’ from ‘neutral’ at Credit Suisse Group AG, which cited the company’s efforts to cut costs and develop environment-friendly technologies.

Nintendo, which sells four times more of its Wii game machines in the Americas than in Japan, climbed 3.1 percent to 28,410 yen as the weaker yen boosted the value of repatriated overseas sales. Canon Inc., the world’s No. 1 digital-camera maker, jumped 3.5 percent to 2,535 yen.

The yen depreciated to as much as 98.71 yesterday, the weakest level since Nov. 10, from 97.80 at the close of stock trading in Tokyo yesterday.

In latest signs the global recession is worsening, Japan’s Trade Ministry said the country’s manufacturers slashed production by an unprecedented 10 percent last month. U.S. government reports showed yesterday that new home sales tumbled 10 percent last month, while first-time claims for jobless benefits jumped to the highest level since 1982.

‘Astonishingly Bad’

Woolworths declined 4.4 percent to A$26.77. First-half net income of A$983.3 million ($634 million) was lower than the A$1.001 billion median estimate of six analysts Bloomberg News surveyed by telephone and e-mail.

Telstra lost 3.3 percent to A$3.56 after Citigroup cut its recommendation on the stock to “sell” from “hold” on concern the carrier may be excluded “permanently” from building a nationwide high-speed Internet network.

QBE dropped 4.2 percent to A$19.17 after it said second- half profit was unchanged as foreign-exchange gains and underwriting profits cushioned losses on equity investments.

Kubota lost 2.7 percent to 475 yen. The company is considering reducing its dividend payment next business year by as much as 30 percent because of “astonishingly bad” profit numbers, President Yasuo Masumoto said.

To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.