By Shani Raja
June 22 (Bloomberg) -- Asian stocks rose, led by automakers and financial companies, as a government report showed confidence among Japanese manufacturers improved this quarter and on speculation Chinese banks will boost lending.
Nissan Motor Co. climbed 5.8 percent in Tokyo after Nikkei English News reported the company will invest in a U.S. electric car plant. Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, gained 3.9 percent in Hong Kong as the Shanghai Securities News reported new loans in June will exceed lending in May. Kansai Electric Power Co. gained 3.9 percent in Tokyo on optimism fuel expenses will decline after oil prices fell the most in more than two weeks.
The MSCI Asia Pacific Index gained 1.3 percent to 102.77 as of 2:22 p.m. in Tokyo, with seven stocks advancing for every two that declined. The gauge has rallied 46 percent from a more than five-year low on March 9 on optimism the global economy is recovering.
“Judging by the quality of this rally so far, and how broad-based it’s been, I don’t see this as a bear-market rally. It’s a cyclical bull market,” said Nader Naeimi, a strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “Obviously, it won’t be a straight line and you’ll get corrections along the way. You’ve had a lot of false dawns over the past 18 months.”
Japan’s Nikkei 225 Stock Average added 1 percent, led by Sapporo Holdings Ltd., the country’s fourth-largest beermaker, which rallied 18 percent after Credit Suisse Group AG raised its recommendation. Australia’s S&P/ASX 200 Index gained 0.3 percent as National Australia Bank Ltd. rose to a two-week high after agreeing to buy Aviva Plc’s Australian wealth management and life insurance business.
Higher Forecasts
Hong Kong’s Hang Seng Index climbed 2.5 percent. The Shanghai Composite Index added 1.1 percent as Chinese Premier Wen Jiabao called for “proactive financial policies.” HTC Corp. helped boost Taiwan’s stock market after the China Times said the company expects handset shipments to climb. Malaysia’s Kuala Lumpur Composite Index fell 0.7 percent after Maybank Investment Bank Bhd. said valuations had risen “too far, too fast.”
Futures on the U.S. Standard & Poor’s 500 Index rose 0.3 percent. The gauge added 0.3 percent on June 19. JPMorgan Chase & Co. led banks higher after saying it will cost less to repay government rescue funds than some analysts estimated.
The MSCI Asia Pacific Index has gained 15 percent this year through June 19 on optimism government stimulus measures and looser monetary policies will lift the global economy from recession. The World Bank in a report today predicted global growth to resume in the second half of 2009, even as it forecast a wider contraction for the world economy this year.
Electric Cars
Sentiment among large Japanese manufacturers increased to minus 13.2 points compared with a record low of minus 66 three months ago, a government survey showed today. The tertiary index of money spent on services from phone calls to dining out climbed 2.2 percent in April from March, the Trade Ministry said.
Nissan climbed 5.8 percent to 600 yen. The company and electronics maker NEC Corp. plan to invest as much as $1 billion in a U.S. electric car plant, Nikkei English News reported over the weekend. Fred Standish, a U.S.-based spokesman for Nissan, said the automaker has applied for a loan under the U.S. government program to support fuel-efficient cars, declining to comment further on the Nikkei report.
NEC added 1.1 percent to 383 yen. Taiwan’s HTC gained 3.4 percent to NT$442 after saying handset shipments will climb as awareness of its brand picks up in Europe and the U.S. HTC is the world’s largest maker of handsets that use Microsoft Corp.’s Windows and Google Inc.’s Android operating systems.
Rising Valuations
The stock rally since March has driven the average valuation of companies in the MSCI Asia Pacific Index to 1.5 times the net value of assets, the highest level since September, according to Bloomberg data.
“We are now in a liquidity-driven market where investors are no longer risk averse, so they will continue to push stocks higher and higher,” said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. “There has been quite a dramatic change in attitudes as investors have become more greedy and look for higher returns.”
Industrial & Commercial Bank gained 3.9 percent to HK$5.39 as Premier Wen called for a “moderately loose” monetary policy. Bank of China Ltd., the country’s third-biggest lender, climbed 3.7 percent to HK$3.62.
“We need to fully realize the stimulus measures,” Wen said during a June 19-20 trip to the northern province of Hebei. “We should focus on structural adjustment while maintaining economic stability and relatively fast growth.”
Oil Prices Fall
Bank stocks also rallied as the Shanghai Securities News reported new loans in June will exceed lending in May. The nation had 5.83 trillion yuan of new loans in the first five months of this year, the Shanghai-based newspaper reported.
Utilities were the second-best performers of the MSCI Asia Pacific Index’s 10 industries today on expectations their fuel expenses will decline. Crude oil futures lost 2.6 percent on June 19, the most since June 3. Oil fell 0.1 percent today.
Kansai Electric climbed 3.9 percent to 2,160 yen. Tokyo Electric Power Co. advanced 1.6 percent to 2,525 yen.
Speculation lower crude prices will hurt oil producers’ earnings dragged Japan Petroleum Exploration Co. down by 2.7 percent to 5,140 yen. Bigger rival Inpex Corp. sank 2.4 percent to 749,000 yen.
Beer Demand
Sapporo surged 18 percent to 514 yen. Credit Suisse raised its rating to “outperform” from “underperform” because of stronger-than-expected beer demand.
National Australia Bank gained 1.2 percent to A$22.35, set to close at the highest since June 3. The company agreed to pay A$825 million ($662 million) for the Australian wealth management business of Aviva, the U.K.’s biggest insurer.
The acquisition is expected to add to earnings per share and return on equity in the first full year following the purchase, the Melbourne-based bank said in a statement to the stock exchange today.
Macquarie Group Ltd., Australia’s largest investment bank, erased losses to gain 0.7 percent to A$37.50. Brian Johnson, a CLSA Asia-Pacific Markets analyst, said the company’s prospects were better than those of the nation’s four commercial banks.
To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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