Asian Stocks Advance on U.S. Jobs, Japanese Machinery Orders

By Shani Raja

Aug. 10 (Bloomberg) -- Asian stocks rose, led by automakers and consumer companies, after the U.S. jobless rate dropped and Japanese machinery orders increased, boosting confidence the world’s two largest economies are emerging from recessions.

Toyota Motor Corp., which gets 31 percent of its revenue from North America, gained 2 percent in Tokyo. Bridgestone Corp., the world’s largest tiremaker, rose 5.6 percent in Tokyo after forecasting a profit. China Mobile Ltd. advanced 2.9 percent in Hong Kong after the country’s premier said it will maintain policies aimed at bolstering domestic spending.

The MSCI Asia Pacific Index climbed 0.9 percent to 111.74 as of 2:37 p.m. in Tokyo, following a 1 percent drop last week. The gauge has risen 59 percent from a more than five-year low on March 9 amid speculation government stimulus efforts around the world will help the global economy recover.

“The key message to investors is to buy the markets,” said Kerry Series, head of Asia-Pacific equities at Sydney-based AMP Capital Investors Ltd., which holds $95 billion. “The stimulus is starting to take effect and you can see the early stages of it. I think the stock market has reflected that.”

Japan’s Nikkei 225 Stock Average rose 1.3 percent to 10,545.90 as strategists at Nomura Holdings Inc. predicted the gauge may climb as high as 11,500 by the end of October. Mitsubishi Rayon Co., which makes fabrics and chemicals, surged 21 percent after the Nikkei newspaper reported the company may be bought by rival Mitsubishi Chemical Holdings Corp.

Beating Estimates

Hong Kong’s Hang Seng Index climbed 2.2 percent. Australia’s S&P/ASX 200 Index advanced 0.2 percent, led by real- estate trust Goodman Group, which surged 14 percent after a share sale eased concerns about the company’s debt levels. Pumpkin Patch Ltd., New Zealand’s second-biggest publicly traded retailer, rose 3.5 percent in Wellington after the country’s house prices rose.

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent.

Japanese machinery orders, an indicator of capital investment in the next three to six months, climbed 9.7 percent from May, the Cabinet Office said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for a 2.6 percent increase.

Toyota gained 2 percent to 4,170 yen. Sony Corp., which gets about a quarter of its sales from the U.S., climbed 3 percent to 2,775 yen. Komatsu Ltd., the world’s second-biggest maker of construction equipment, rose 3.2 percent to 1,637 yen.

Higher Forecast

Bridgestone jumped 5.6 percent to 1,785 yen after forecasting full-year net income of 6 billion yen ($62 million), compared with an earlier break-even prediction.

The yen weakened against the dollar after the U.S. jobs report, boosting the outlook for Japanese export earnings. The U.S. currency last week strengthened 3.1 percent against the yen, the steepest weekly advance in two months.

Companies’ efforts to cut costs boosted investor confidence in the outlook for earnings, Nomura strategists wrote in a report. The analysts said the Nikkei 225 may rise as high as 11,500 by the end of October, lifting a previous estimate that ranged between 10,500 and 11,000.

The stock rally since March has lifted the average price of companies in the MSCI Asia Pacific Index to 1.57 times book value, the highest level since Sept. 10, which was five days before Lehman Brothers Holdings Inc. filed for bankruptcy. That level is still lower than the five-year average of 1.83 times book value, data compiled by Bloomberg show.

Economic Improvement

“Valuations are not stretched, but the market’s moved a hell of a long way since the bottom,” said Mark Konyn, Hong Kong-based chief executive officer of RCM Asia Pacific Ltd., which holds $11 billion. “The question is whether or not we’ll see that follow through in economic improvement and I think you see it in the jobs numbers in the U.S.”

China will maintain its current macroeconomic policy stance aimed at bolstering domestic spending as the nation continues to experience fallout from the global recession, Premier Wen Jiabao said yesterday.

China Mobile, the world’s largest cell-phone operator by users, advanced 2.9 percent to HK$91.15. Aluminum Corp. of China Ltd., China’s largest maker of the light metal, climbed 4 percent to HK$9.84.

New Zealand Housing

Pumpkin Patch gained 3.5 percent to NZ$1.80. New Zealand house prices rose for the third month in July, advancing 0.7 percent from the previous month, according to Quotable Value New Zealand Ltd., the government valuation agency.

Mitsubishi Rayon surged 21 percent to 331 yen after the Nikkei reported Mitsubishi Chemical may pay as much as 200 billion yen to buy the company. Mitsubishi Rayon said it had no statement to make.

Mitsubishi Chemical wasn’t the source of the information, spokesman Yoshinori Nagayama said. The company’s shares added 5 percent to 444 yen.

In Sydney, coal producers rallied as Yanzhou Coal Mining Co. and Felix Resources Ltd. halted trading of their shares amid speculation China’s fourth-biggest coal producer plans a takeover bid for its Australian rival. Macarthur Coal Ltd., the world’s biggest exporter of pulverized coal, climbed 7.9 percent to A$8.38. Centennial Coal Co. rose 5.8 percent to A$3.12.

In Hong Kong, Hang Seng Bank Ltd. gained 2 percent to HK$118.10 after Chief Executive Officer Margaret Leung said the lender may raise its 12.8 percent stake in China’s Industrial Bank Co. Industrial Bank added 0.3 percent to 39.30 yuan.

Goodman surged 14 percent to 50.5 Australian cents. Institutional investors bought A$923 million ($773 million) shares for 40 cents each, the Sydney-based company said in a statement today, while retail investors are expected to buy A$355 million in shares.

“Some traders were wanting this capital raising to take place,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “It’s being taken positively because it will result in a stronger balance sheet, better liquidity and an impressive gearing.”

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