Asian Stocks Rise From Two-Week Low; Taiwan Semiconductor Gains

By Jonathan Burgos

Sept. 29 (Bloomberg) -- Asian stocks rose, lifting the MSCI Asia Pacific Index from a two-week low, as the dollar advanced against the yen and Taiwan said it may allow Chinese investors to buy stakes in its flat-panel and computer-chip industries.

Nissan Motor Co., which gets 36 percent of its sales from North America, gained 3.3 percent as a stronger dollar bolstered the outlook for U.S. profit. Taiwan Semiconductor Manufacturing Co. jumped 4.9 percent in Taipei on speculation Chinese investors will purchase shares in the company. Commonwealth Bank of Australia added 2.1 percent after the government reported lower- than-forecast budget deficit figures.

The MSCI Asia Pacific Index rose 1.1 percent to 117.20 as of 6 p.m. in Tokyo after closing yesterday at its lowest since Sept. 15. The measure had fallen 2.4 percent in the past three days, the longest series of declines since the six days ended July 8. The gauge has risen 66 percent from a five-year low on March 9.

“There hasn’t been much pullback in the market as investors are probably expecting third-quarter earnings to be better than estimated,” said Pearlyn Wong, Singapore-based investment analyst at Bank Julius Baer Co., which manages about $350 billion. “We still prefer Asian equities. The U.S. has a long way to go before the economy normalizes.”

Japan’s Nikkei 225 Stock Average climbed 0.9 percent to 10,100.20 even as the statistics bureau reported that the country’s consumer prices fell at a record pace in August. Nomura Holdings Inc., which announced a record share sale last week, climbed 4.4 percent for its first gain in 10 trading days.

Hang Seng, Kospi

Hong Kong’s Hang Seng Index added 2.1 percent. Bank of Communications Ltd. gained 2 percent on speculation new loans climbed in China this month. Australia’s S&P/ASX 200 Index advanced 1.6 percent after the government reported a smaller- than-forecast budget deficit. BHP Billiton Ltd., the country’s biggest oil producer, rose 2.4 percent after crude-oil increased.

Futures on the U.S. Standard & Poor’s 500 Index lost 0.1 percent. The gauge climbed 1.8 percent yesterday, on takeovers in the drug and technology industries. Treasuries fell, ending a five-day advance, with the yield on the 10-year note rising two basis points, according to BGCantor Market Data.

The yen today declined to 90.23 per dollar from 89.63 yesterday, when it touched 88.24, the strongest level since Jan. 23. Japan’s currency dropped to 131.45 per euro from 131.06 in New York yesterday.

Nissan climbed 3.3 percent to 599 yen, while Honda Motor Co., which gets 45 percent of its revenue from North America, gained 1.1 percent to 2,705 yen. Both stocks lost at least 5 percent yesterday on concern the yen’s strength will hurt profit.

Irregular Movements

The government may act to stabilize the foreign-exchange market should currency movements become irregular, Japanese Finance Minister Hirohisa Fujii said at a news conference in Tokyo today. He denied saying he tolerates a stronger yen.

In Taipei, Taiwan Semiconductor, the world’s largest custom-chip maker, climbed 4.9 percent to NT$63.70. AU Optronics Corp., the world’s third-largest liquid-crystal-display maker, added 2.8 percent to NT$31.70.

Taiwan is considering allowing Chinese investors to buy stakes in its flat-panel and computer-chip industries, Hsien-lin Huang, an official at the Ministry of Economic Affairs, said.

The island may also allow flat-panel and semiconductor companies to set up plants in China and buy stakes in Chinese companies, Huang said in a phone interview, confirming a Commercial Times report.

High Cash Levels

Australian stocks rose following what the country’s Treasurer Wayne Swan termed as “stronger-than-expected” budget deficit figures. The deficit for the year ended June 30 was A$27.1 billion ($23.7 billion), Swan said, lower than the A$32.1 billion he forecast in May.

Commonwealth Bank, Australia’s largest by value, rose 2.1 percent to A$52.10. Westpac Banking Corp., the country’s No. 2 bank, added 1.3 percent to A$26.43.

“Australia’s less-than-expected budget deficit certainly is giving the market a positive impact,” said Ben Potter, an analyst at IG Markets Ltd. in Melbourne. “Levels of cash within the economy are high.”

Better-than-estimated economic and earnings figures have driven the stock rally since March, lifting the average price of the MSCI Asia Pacific Index’s companies to 1.6 times book value. That’s up from 1 at the gauge’s March low.

“For the long term we are still pretty optimistic on Asia from a five- or 10-year view,” said Nicholas Yeo, head of China and Hong Kong equities at Aberdeen Asset Management Group. “However, there could be some detachment between the real economy and the market at the moment.”

Japan Consumer Prices

Signs of a recovery have been mixed even as economies from France and Germany to Japan emerged from recession. Japan’s statistics bureau reported today that consumer prices slid 2.4 percent from a year earlier, the sharpest decline since the survey began in 1971. The drop matched economist estimates.

In Hong Kong, Bank of Communications, China’s fourth- largest lender by market value, rose 2 percent to HK$9.57, while Industrial & Commercial Bank of China Ltd., the world’s largest by market value, climbed 3.3 percent to HK$5.94.

China’s National Business Daily reported new loans in September may exceed 600 billion yuan ($88 billion). That’s higher than August’s 410 billion yuan and July’s 356 billion, and compares with an average of 1.23 trillion in the first six months of the year.

Concerns slower credit growth could derail a rally in China’s equity markets contributed to the Hang Seng Index’s 2.8 percent drop last week.

Nomura, Filinvest Rally

Nomura climbed 4.4 percent to 564 yen. The stock fell 21 percent in the previous two days after the company said on Sept. 25 that it is selling 800 million shares, equivalent to almost 30 percent of the stock outstanding, raising 511.3 billion yen ($5.7 billion) in its largest offering on record.

Filinvest Land Inc., the fourth-largest Philippine builder, climbed 3.3 percent to 94 centavos, rallying from its lowest close since Aug. 20 on speculation declines in the past week were excessive.

In Sydney, BHP gained 2.4 percent to A$37.99 after crude oil futures rose 0.3 percent in after-hours trading, adding to yesterday’s 1.2 percent advance in New York.

PetroChina Co., China’s largest oil producer, climbed 1.6 percent to HK$8.90 in Hong Kong. Cnooc Ltd., China’s largest offshore oil producer, gained 2.7 percent to HK$10.58.

To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.