Asian Stocks Rise on Yen, Outlook for Chip Demand; HSBC Climbs

By Masaki Kondo

Dec. 22 (Bloomberg) -- Asian stocks rose, pushing the MSCI Asia Pacific Index to its biggest gain in almost three weeks, as the weaker yen boosted the earnings outlook for Japanese makers of electronics and cars and as Hong Kong-listed banks advanced.

Sony Corp., which gets 23 percent of its sales from the U.S., added 2.7 percent in Tokyo after the yen sank to its lowest level against the dollar since October. Toshiba Corp. and Elpida Memory Inc. climbed after the Nikkei newspaper said demand for chips is recovering. HSBC Holdings Plc advanced for the first time in six days in Hong Kong after the city’s central bank said some lenders may have “pretty good” profit growth.

“The global economy is steadily improving,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $94 billion. “Some people are fearful of a double-dip recession. I’d like to know how they’ve reached that conclusion, though I sympathize with their concerns.”

The MSCI Asia Pacific Index rose 1.1 percent to 118.10 as of 5:35 p.m. in Tokyo, headed for its steepest increase since Dec. 3. All 10 industry groups gained. The gauge has climbed 32 percent this year, en route to its steepest annual increase since 2003, as central banks worldwide reduced borrowing costs and governments boosted spending to shore up their economies.

Japan’s Nikkei 225 Stock Average increased 1.9 percent, the steepest advance among benchmark indexes in the Asia-Pacific region. Hong Kong’s Hang Seng Index added 0.7 percent and Australia’s S&P/ASX 200 Index climbed 1.5 percent.

Weakening Yen

The Shanghai Composite Index slipped 2.3 percent, extending this month’s drop to 4.5 percent amid concern government measures to curb property speculation may damp economic growth.

The yen depreciated to as low as 91.48 today, a level not seen since Oct. 30, from 90.29 at yesterday’s close of stock trading in Tokyo, after Bank of Japan Governor Masaaki Shirakawa told TV Tokyo last night that he will “persistently” keep interest rates at close to zero. A weaker yen boosts the value of Japanese companies’ overseas sales when converted into their home currency.

“Shirakawa sent a clear message the BOJ will fight deflation and keep interest rates low,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “It is a message to bring down the yen.”

Sony, the maker of the PlayStation 3 game machine, rose 2.7 percent to 2,650 yen. Nissan Motor Co., which gets 36 percent of its sales in North America, climbed 6.1 percent to 769 yen, while bigger rival Toyota Motor Corp. jumped 2.2 percent to 3,800 yen and was the biggest positive contributor to the MSCI Asia Pacific Index.

Semiconductor Stocks

Shares in the MSCI Asia Pacific Index trade at 3 times estimated cash flow for this year, compared with 9 times for the Standard & Poor’s 500 Index in the U.S. and 8 times for Europe’s Dow Jones Stoxx 600 Index.

Toshiba advanced 4.7 percent to 518 yen, and Elpida jumped 4.6 percent to 1,387 yen after the Nikkei newspaper said they will restart capital investment to increase output as demand recovers. Samsung Electronics Co., Asia’s biggest chipmaker, added 1.3 percent to 781,000 won in Seoul. Taiwan Semiconductor Manufacturing Co., the world’s largest maker of custom chips, rose 1.1 percent to NT$62.90 in Taipei.

“The report on Toshiba and Elpida shows one of the phenomena that occur when the world economy recovers,” said Daiwa Asset’s Nagano.

Hong Kong Banks

The Philadelphia Semiconductor Index jumped 2.3 percent yesterday to the highest close since August 2008. Intel Corp., the world’s biggest chipmaker, climbed 2.3 percent yesterday in New York after Barclays Plc raised its investment rating on the stock, citing “seemingly solid end market conditions.”

HSBC, Europe’s largest bank, gained 0.8 percent to HK$87.15 in Hong Kong. Industrial & Commercial Bank of China Ltd., the world’s most profitable bank, jumped 2.6 percent to HK$6.27, while China Construction Bank Corp. added 2.1 percent to HK$6.41.

Y.K. Choi, Deputy Chief Executive of the Hong Kong Monetary Authority, told reporters yesterday that some banks in the territory may report “pretty good” profit growth for this year.

Financial companies collectively contributed the most to today’s gain in the MSCI Asia Pacific Index.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.