By Masaki Kondo
Nov. 4 (Bloomberg) -- Asian stocks rose for the first time in three days, led by banks and mining companies, as Korea Exchange Bank and Westpac Banking Corp. posted better-than- estimated earnings and gold prices climbed to a record.
Korea Exchange Bank jumped 7.8 percent after saying third- quarter profit almost tripled. Westpac, Australia’s No. 2 bank, added 1.4 percent in Sydney. Zijin Mining Group Co., China’s largest gold company, and Sumitomo Metal Mining Co., Japan’s top producer, gained at least 2.6 percent. Toyota Motor Corp. added 1.1 percent in Tokyo after the Yomiuri newspaper said the carmaker raised production.
“Company earnings are improving faster than the global economy,” said Junichi Misawa, head of the equity investment division at Tokyo-based STB Asset Management Co., which manages the equivalent of $14 billion. “This scenario still remains intact, though valuations aren’t enticing.”
The MSCI Asia Pacific Index rose 0.8 percent to 115.22 as of 4:14 p.m. in Tokyo, with five stocks advancing for every two that declined. The gauge has surged 63 percent from a more than five-year low on March 9 on signs government stimulus measures are reviving the global economy.
The World Bank said today that East Asian economies will grow faster than initially estimated this year, adding pressure on central banks to tighten policy. The bank urged China’s policymakers to avoid stock and property-market bubbles.
Nikkei, Hang Seng
Hong Kong’s Hang Seng Index climbed 1.5 percent. South Korea’s Kospi Index gained 1.9 percent. The Nikkei 225 Stock Average added 0.4 percent in Tokyo. Japan Steel Works Ltd. climbed 10 percent after raising its earnings forecast.
Casino operator Galaxy Entertainment Group Ltd. jumped 4.8 percent in Hong Kong after the Macao Daily News said gaming revenue swelled in the city. Seoul Semiconductor Co. rose 5.4 percent after saying Temasek Holdings Pte will invest in the manufacturer. Tokyo Electron Ltd. slumped 5.1 percent as Morgan Stanley downgraded U.S. semiconductor companies.
Futures on the U.S. Standard & Poor’s 500 Index added 0.4 percent, while Treasuries were little changed before U.S. reports that economists expect will show service industries expanded and companies cut fewer jobs. The S&P 500 rose 0.2 percent yesterday amid takeover announcements.
Korea Exchange Bank jumped 7.8 percent to 13,800 won after its third-quarter net income of 422.1 billion won ($357 million) beat the 223.7 billion won expected by analysts.
Stimulus Withdrawal
In Sydney, Westpac added 1.4 percent to A$25.79 as its second-half profit fell 10 percent, less than analysts expected. The lender joined Australia & New Zealand Banking Group Ltd. in saying bad debts have peaked as the economy recovers.
Australia raised its benchmark interest rate yesterday, the second increase in four weeks, amid signs of strength in the country’s economy. The MSCI Asia Pacific Index has fallen 4.9 percent from this year’s high on Oct. 20 as investor concern grew that governments will withdraw their stimulus policies.
Stock declines dragged the average price of companies in the MSCI gauge to 22 times estimated earnings yesterday, a level not seen since May 1, according to data compiled by Bloomberg. Bank of Japan Governor Masaaki Shirakawa was cited by the Yomiuri newspaper yesterday as saying problems would occur “if we take inflation measures to reduce the value of government bonds.”
“Governments can’t continue to give these shots in the arm in the face of budget deficits, and investors aren’t confident in a sustained recovery after the shots run out,” STB Asset’s Misawa said.
Gold Producers
Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea, Singapore and the Indian subcontinent, will expand 6.7 percent this year, more than an April estimate of 5.3 percent, the World Bank said in its semi-annual report.
In Hong Kong, Zijin Mining climbed 5 percent to HK$8.16, while in Tokyo, Sumitomo Metal Mining added 2.6 percent to 1,476 yen. Gold jumped to a record $1,088.50 an ounce in New York yesterday after India’s central bank purchased the metal from the International Monetary Fund.
Newcrest Mining Ltd., Australia’s largest gold producer, gained 3.2 percent to A$34.45, while Lihir Gold Ltd. added 4.4 percent to A$3.31. Material producers accounted for 15 percent of the MSCI Asia Pacific Index’s advance.
Japan Steel Works, the MSCI gauge’s second-best performer today, surged 10 percent to 1,096 yen. The company, which makes nuclear-reactor parts for Toshiba Corp. and Paris-based Areva SA, lifted its net income target by 6.4 percent for the year to March 2010, citing cost cuts.
Toyota’s Production
Toyota, the world’s largest carmaker, added 1.1 percent to 3,610 yen. The company lifted its global production plan for fiscal 2009 to 7 million vehicles from the previous target of 6.67 million units, the Yomiuri newspaper reported.
In Hong Kong, Galaxy Entertainment rose 4.8 percent to HK$3.49 in Hong Kong. SJM Holdings Ltd., billionaire Stanley Ho’s casino holding company, climbed 4.7 percent to HK$4.02. Macau’s casino revenue rose 42 percent in October from a year earlier, Macao Daily News reported, citing Portuguese news agency Lusa.
Seoul Semiconductor, which produces light-emitting diodes, climbed 5.4 percent to 42,300 won. The company said yesterday it will issue new shares to Temasek, which will own about 12 percent of Seoul Semiconductor after the investment.
Tokyo Electron, the world’s second-largest maker of semiconductor equipment, sank 5.1 percent to 4,850 yen, while Sumco Corp., which makes silicon wafers, retreated 3.7 percent to 1,648 yen. Morgan Stanley reduced its rating on U.S. semiconductor shares to “cautious” and downgraded Intel Corp. to “equal-weight.”
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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