By Jonathan Burgos and Yoshiaki Nohara - Nov 11, 2011 10:23 AM GMT+0700
Nov. 11 (Bloomberg) -- Jenny Tian, managing director at Springs Capital Ltd., talks about the potential for intervention by the Chinese government in the European sovereign-debt crisis, and investment strategy. Tian speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Nov. 11 (Bloomberg) -- Simon Flood, chief investment officer at Lion Global Investors Ltd., talks about the impact of Europe's debt crisis on Asian stocks, the outlook for the U.S. economy, and investment strategy. Flood speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Asian stocks rose, rebounding from the biggest decline in seven weeks, as U.S. jobless claims fell and the selection of a new Greek premier tempered concern Europe’s debt crisis won’t be contained.
Sony Corp., Japan’s biggest exporter of consumer electronics, rose 2.3 percent. Hynix Semiconductor Inc. (000660) advanced 1.9 percent in Seoul after SK Telecom Co., South Korea’s No. 1 mobile-phone company, offered to buy 20 percent of the world’s second-largest memory-chip maker. Genting Singapore Plc (GENS) slumped 4.2 percent after Citigroup Inc. lowered its rating to “sell” as the casino-resort operator posted earnings that missed analysts’ estimates.
“The news headlines have been all about Europe, and behind the scenes, the U.S. economy has significantly improved with increasing positive economic data,” said Stan Shamu, a strategist at IG Markets in Melbourne. “Some companies with established earnings will get a bit of traction from investors who are looking into gaining a bit of value, but at the same time, the headline risk is still very high.”
The MSCI Asia Pacific Index gained 0.5 percent to 116.62, as of 12:11 p.m. in Tokyo, with about five shares rising for every three that fell. The measure fell 3.3 percent yesterday after reports showed Japan’s machinery orders dropped and China’s export growth slowed, and signs emerged that Europe’s debt crisis has infected Italy.
Financial and information technology companies were the biggest contributors to the regional benchmark gauge’s advance today after Greece named Lucas Papademos, the former vice president of the European Central Bank, to lead a unity government.
Nikkei, Kospi
Australia’s S&P/ASX 200 rose 0.7 percent and South Korea’s Kospi Index increased 1.9 percent. Hong Kong’s Hang Seng Index advanced 0.9 percent, while China’s Shanghai Composite Index added 0.2 percent. Japan’s Nikkei 225 (NKY) Stock Average fell 0.2 percent, erasing gains of as much as 0.8 percent.
Futures on the Standard & Poor’s 500 Index gained 0.5 percent today, erasing losses of as much as 0.3 percent. In New York, the index rose 0.9 percent yesterday after a report showed that the number of Americans filing applications for unemployment benefits fell by 10,000 to 390,000 last week, a sign an economic recovery may be encouraging companies to limit cuts in headcount.
Exporters advanced. Sony, the maker of PlayStation game consoles and Bravia televisions, climbed 2.3 percent to 1,352 yen in Tokyo. Canon Inc., the world’s biggest camera maker, gained 1.3 percent to 3,410 yen. LG Electronics Inc. (066570), Asia’s second-largest maker of mobile phones by sales, jumped 3.6 percent to 62,900 won in Seoul.
‘On a Knife Edge’
The MSCI Asia Pacific Index is poised for a second straight week of decline as Europe’s sovereign-debt crisis stirred political turmoil across the region, with Italian Prime Minister Silvio Berlusconi and Greek Prime Minister George Papandreou both offering to step down.
“These markets are balanced on a knife edge,” Simon Flood, chief investment officer at Lion Global Investors Ltd., told Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” The firm oversees about $22 billion. “Until we get some clarity and some political leadership both in Europe and the U.S., the markets are going to continue to be volatile.”
Hynix rose 1.9 percent to 21,900 won in Seoul. The chip maker will name SK Telecom as the preferred bidder for a stake in the company, said Lee Sun Hwan, a spokesman at Korea Exchange Bank, which is leading the sale. The carrier offered to buy 20 percent of Hynix even as prosecutors investigate whether the chairman of SK Telecom’s controlling group misused funds.
Biggest Decline
The MSCI Asia Pacific Index declined 16 percent this year through yesterday, compared with a 1.4 percent drop by the S&P 500 and a 15 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.6 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.2 times for the Stoxx 600.
Of the 518 companies on the Asian gauge that reported earnings since Oct. 11, 241 missed analysts’ estimates, while 177 exceeded expectations, according to data compiled by Bloomberg News.
Genting Singapore sank 4.2 percent to S$1.615, poised for its biggest decline since Aug. 19, after Citigroup lowered its rating on the stock to “sell” from “buy,” citing rising provisions for bad debts.
The company yesterday reported third-quarter net income rose 12 percent to S$209.7 million ($163 million), missing the average estimate of S$274 million from two analysts surveyed by Bloomberg.
“Genting recorded S$57 million of bad debt provisions in the third quarter, equating to 8.5 percent of gaming revenue, an increase from an average of 3 percent over the past six quarters,” analyst George Choi wrote in a note to clients dated yesterday. “Increases in both receivable balance and bad debt provision are worrying signs.”
-- Editor: John McCluskey
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net； Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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