Asian Stocks Climb as Dubai Concerns Ease; HSBC, Suning Rally

By Jonathan Burgos and Shani Raja

Nov. 30 (Bloomberg) -- Asian stocks rose, driving the MSCI Asia Pacific Index up the most in almost eight months, as the United Arab Emirates’ pledge of support for banks eased concerns that losses from Dubai World’s possible default will escalate.

National Australia Bank Ltd. and Commonwealth Bank of Australia climbed more than 4 percent, after saying they don’t expect “material” losses from Dubai. HSBC Holdings Plc, which said it had more deposits than loans in Dubai, gained 4.3 percent in Hong Kong. Suning Appliance Co., China’s biggest home appliance retailer, climbed 7 percent in Shenzhen after the government said it will maintain stimulus policies next year.

The MSCI Asia Pacific Index rose 3.4 percent to 117.76 as of 5:34 p.m. in Tokyo, the most since April 2. The gauge lost 2.6 percent last week, the largest weekly drop in eight, as Dubai World, the investment company burdened by $59 billion of liabilities, sought to delay repayment on much of its debt. The MSCI World Index rose 0.5 percent today from a three-week low.

“There is relief that things are not as serious as they might be,” said Matt Riordan, who helps manage about $5.1 billion at Paradice Investment Management in Sydney. “The risk of a serious contagion affecting the global financial system doesn’t now seem likely or probable.”

China’s Shanghai Composite Index added 3.2 percent, while Hong Kong’s Hang Seng Index rose 3.3 percent. China’s government will continue a proactive fiscal policy and a “moderately loose” monetary stance, the state-run Xinhua News Agency reported Nov. 27 after a Politburo meeting chaired by President Hu Jintao.

Japan’s Nikkei 225 Stock Average advanced 2.9 percent. Sony Corp. and Nissan Motor Co., which get at least a fifth of their sales from North America, gained more than 2 percent in Tokyo as the yen earlier fell from a 14-year high against the dollar.

Australian Banks

Australia’s S&P/ASX 200 Index climbed 2.8 percent, with Energy Developments Ltd. rising 12 percent on a takeover bid. Among stocks that fell today, Sands China Ltd. tumbled 10 percent in its first day of trading in Hong Kong.

Futures on the U.S. Standard & Poor’s 500 Index were little changed percent. The gauge slid 1.7 percent on Nov. 27 amid Dubai concerns. The United Arab Emirates’ central bank said banks will be able to borrow money for half a percentage point above the three-month local benchmark interest rate.

Finance companies were the biggest boost to the MSCI Asia Pacific Index after National Australia Bank, Commonwealth Bank, Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. denied any “material” losses from Dubai World.

National Australia, the country’s third-biggest lender by market value, jumped 6 percent to A$28.62, while Commonwealth Bank, the largest, rose 4.4 percent to A$52.80. ANZ Bank added 4.5 percent to A$22.15. Westpac climbed 4.4 percent to A$24.14.

HSBC, Bank of China

“It helps that the Australian banks have said they don’t have much of an exposure,” said Ben Potter, a research analyst at IG Markets in Melbourne. “I think global markets have already started looking past this whole thing.”

HSBC gained 4.3 percent to HK$90.70 following a 7.6 percent slump on Nov. 27. The bank said after Hong Kong markets closed that day it has $15.9 billion in loans and advances to customers in the U.A.E. as of the end of June, compared with $19.3 billion in deposits. Bank of China Ltd. jumped 5.8 percent to HK$4.37 after saying it does not have any securities linked to Dubai’s government and state-backed agencies.

Stocks of MSCI Asia Pacific Index are valued at 21 times estimated earnings following a rally since March, compared with 17 times for the S&P 500 and 15 times for Europe’s Dow Jones Stoxx 600 Index. MSCI’s Asia gauge has climbed 69 percent from a more than five-year low on March 9 amid signs government stimulus measures were reviving economies around the world.

Positive on Asia

“Our analysis makes us surprisingly positive on Asian markets for 2010,” Goldman Sachs Group Inc. analysts led by Timothy Moe wrote in a report. “The growth in emerging-market Asia should attract inflows from low-growth developed markets, providing an uplift to valuations.”

The MSCI Asia Pacific excluding Japan Index may gain to 540 by December 2010, the analysts wrote. The gauge gained 2.7 percent to 402.63 today.

Suning Appliance rallied 7 percent to 18.98 yuan following Xinhua’s report of the government’s stimulus pledge. Kweichow Moutai Co., the largest producer of spirits by market value, gained 5.3 percent to 173.91 yuan. Gree Electric Appliances Inc., which makes air-conditioners, climbed 6.3 percent to 27.33 yuan.

“Investors are relieved that the focus hasn’t changed and the emphasis is still on promoting growth and domestic consumption,” said Michelle Qi, Shanghai-based portfolio manager at Bank of Communications Schroders Fund Management Co., which oversees about $6.5 billion.

Weaker Yen

Sony, the maker of PlayStation gaming consoles, rose 2.7 percent to 2,325 yen as the yen halted gains that took it to a 14-year high against the dollar, boosting the outlook for Japan’s export revenues. Nissan added 3.5 percent to 626 yen.

The yen was 86.22 per dollar, compared with 86 at the close of stock trading in Tokyo on Nov. 27, when Japan’s currency reached the strongest level versus the greenback since July 1995. The yen depreciated to as low as 87.16 today against the dollar.

“Stocks that plunged last week due to a weaker dollar and the Dubai shock will rebound as the yen’s appreciation paused,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “Investors should be still nervous about the currency movement.”

In Sydney, Energy Developments, a renewable energy company, surged 12 percent to A$2.69 after saying it received a takeover offer from Greenspark Power Holdings Ltd. of A$2.75 a share.

Fortescue Metals Group Ltd. advanced 5 percent to A$4.21 after Australia’s third-biggest iron ore producer was raised to “hold” from “sell” at Deutsche Bank AG.

Sands China, the Macau casino operator that raised HK$19.4 billion ($2.5 billion) from its Hong Kong initial public offering, tumbled 10 percent to HK$9.32. The shares were sold at HK$10.38 each, at the bottom of a range offered to investors.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.