Most Asian Stocks Rise; Shin-Etsu Chemical Gains, Banks Retreat

By Masaki Kondo and Shani Raja

July 22 (Bloomberg) -- Most Asian stocks rose, led by material producers after Shin-Etsu Chemical Co. said it will seek a price increase. Banks fell as National Australia Bank Ltd. said it will sell stock.

Shin-Etsu Chemical, the world’s largest maker of silicon wafers, climbed 5.1 percent in Tokyo after saying its unit will start talks with chipmakers for a price increase. Hon Hai Precision Industry Co., which makes Apple Inc.’s iPhone, gained 1.4 percent in Taipei after Apple’s earnings beat analyst estimates. Sydney-based Westpac Banking Corp. sank 1.5 percent, while National Australia Bank, the nation’s largest lender by assets, was suspended from trading.

Five stocks rose for every three that fell on the MSCI Asia Pacific Index, which added 0.3 percent to 106.96 as of 11:27 a.m. in Tokyo. An 8.7 percent increase in the past six days lifted the measure yesterday to its highest close since Oct. 2. The gauge has gained 52 percent from a five-year low on March 9.

“The underlying economy is better than people anticipated and the market is pricing for a recovery,” said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney.

Japan’s Nikkei 225 Stock Average advanced 0.2 percent. Australia’s S&P/ASX 200 Index added 0.5 percent, while South Korea’s Kospi Index lost 0.1 percent.

Futures on the U.S. Standard & Poor’s 500 Index fell 0.3 percent. The gauge gained 0.4 percent yesterday as Federal Reserve Chairman Ben S. Bernanke said the country’s economy is showing “tentative signs of stabilization.”

Silicon Wafers

Shin-Etsu Chemical climbed 5.1 percent to 4,750 yen, while closest rival Sumco Corp. rose 4.5 percent to 1,577 yen in Tokyo.

Shin-Etsu Chemical said today Shin-Etsu Handotai Co., its wholly owned subsidiary, will start negotiations with chipmakers to raise prices for silicon wafers. The Nikkei newspaper earlier said the company will seek a price increase of as much as 40 percent.

Hon Hai gained 1.4 percent to NT$112.5 as Apple became the latest U.S. company to report better-than-expected earnings. Apple’s third-quarter sales and profit beat analysts’ estimates, as the iPhone and cheaper computers lured customers.

Optimism of a rebound in corporate profits has helped fuel a global stock rally in the past week. The average valuation of companies in the MSCI Asia Pacific Index has risen to 24 times estimated net income, higher than the S&P 500’s 15 times and 13.7 times for Europe’s Dow Jones Stoxx 600 Index.

The first Quarterly Bloomberg Global Poll of financial investors and analysts showed more than a third of investors see greater opportunity and are taking more risk. Seventy percent of participants in the survey are optimistic about China’s prospects.

Westpac fell 1.5 percent to A$20.01. National Australia Bank said it will raise A$2.75 billion ($1.63 billion) from selling equity to help it weather rising bad loans and finance potential acquisitions.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.