South Korean Current Account Rises, N.Z. Exports Gain

By Tracy Withers and Seonjin Cha

April 29 (Bloomberg) -- South Korea’s current-account surplus widened to a record and New Zealand overseas shipments rose for a second month in March, indicating the Asia-Pacific region’s export slump may be abating.

The current-account surplus, South Korea’s broadest measure of trade, swelled to $6.65 billion last month, almost doubling from February, the central bank said. New Zealand’s exports surged 17 percent from the previous month, the first back-to- back increase since December 2007, the statistics bureau said.

Korean stocks headed for their first gain in four days and the New Zealand dollar strengthened. Reports yesterday showed U.S. consumer confidence jumped by the most since 2005, an index of U.K. retail sales rose to the highest in more than a year and Italian businesses grew more optimistic in April, igniting speculation the worst may be over for the global recession.

“There are signs of positive momentum in the region’s exports,” said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney. “here’s some evidence the global manufacturing cycle has improved a little.”

There is growing evidence stronger demand from China is helping exports recover. New Zealand’s exports to China climbed 39 percent in March from February, according to today’s data.

Earlier reports show Singapore’s shipments to China surged 29 percent last month from February, while those from Japan, South Korea and Taiwan to China also rose.

Korean Shares

South Korea’s Kospi stock index gained 1.7 percent to 1,322.74 at 11:45 a.m. in Seoul. Shares in exporter Samsung Electronics Co. rose 0.7 percent, those in LG Electronics Co. climbed 6 percent and Posco shares advanced 0.5 percent. The won increased 0.7 percent to 1,346.9 against the U.S. currency.

New Zealand’s dollar strengthened to 56.27 U.S. cents at 2:46 p.m. in Wellington from 55.82 cents just before the trade report was released.

The MSCI Asia Pacific index of shares edged up 0.4 percent to 87.36 as of 9:45 a.m. in Hong Kong. The index has risen almost 8 percent in April amid optimism governments worldwide will succeed in easing the global recession.

China’s $585 billion stimulus package should contribute “strongly” to expansion in Asia, the World Bank said this month. Goldman Sachs Group Inc. last week raised its 2009 growth forecast for China’s economy to 8 percent from 6 percent previously, citing the stimulus.

China’s Role

“The apparent recovery is China’s growth is playing a big role,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “The authorities there have been the most determined to turn their economy around.”

Taiwan’s AU Optronics Corp. said April 23 that liquid- crystal-display sales will rise 50 percent this quarter from the previous three months, helped by orders from China.

Nissan Motor Co., Japan’s third-largest carmaker, said this month its sales in China climbed 13.7 percent in March.

Hyundai Motor Co., South Korea’s largest automaker, expects sales to China to increase by more than 11 percent this year.

The current-account report showed South Korea’s exports, on a free-on-board basis which excludes freight and insurance costs, rose to a five-month high of $30.4 billion in March, up 20 percent from February.

Still, Finance Minister Yoon Jeung Hyun cautioned against being too optimistic on the outlook for an economic recovery.

‘Negative Signs’

“We have positive signs and negative signs,” Yoon said today at the government’s weekly so-called emergency economic meeting. “Korea’s economy is in a down cycle, but the speed of the contraction is slowing.”

The International Monetary Fund last week predicted a global economic contraction of 1.3 percent this year, compared with its January projection of 0.5 percent growth.

From a year earlier, most Asia-Pacific nations are still reporting plunges in exports: In March, Japan’s shipments sank 46.4 percent; Taiwan’s sank 35.7 percent from a year earlier and South Korea’s declined 22 percent.

To contact the reporters on this story: Tracy Withers in Wellington at twithers@bloomberg.net; Seonjin Cha in Seoul at scha2@bloomberg.net.