BLBG: Asian Stocks Advance for Sixth Week in Seven as Corporate Earnings Climb
Asian stocks rose for the sixth time since mid-December as higher corporate earnings countered Standard & Poor’s cut of Japan’s credit rating and concern that Chinese policy makers will tighten monetary policy.
Samsung Electronics Co., the world’s second-biggest maker of mobile phones, advanced to a record high in Seoul and Keppel Corp., an oil-rig builder, gained 5.8 percent in Singapore after they reported earnings that exceeded analyst estimates. Honda Motor Co., Japan’s No. 3 carmaker by sales, climbed 7.6 percent after Nomura Holdings Inc. boosted its investment rating. Mitsubishi UFJ Financial Group Inc., the nation’s largest publicly traded bank, dropped 2 percent in Tokyo.
The MSCI Asia Pacific Index rose 0.86 percent to 137.65 this week. Of the 131 companies in the gauge that reported earnings for the latest quarter as of yesterday, 61 exceeded analysts’ estimates, while 52 missed them, according to data compiled by Bloomberg. On Jan. 31, 85 of the 1,019 companies in the index are scheduled to release results.
“There are strong expectations that earnings will improve,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., which manages about $57 billion in assets.
The MSCI gauge had its first weekly drop in 1 1/2 months last week amid concern faster-than-expected economic growth in China will add pressure on policy makers to accelerate efforts to tame inflation.
Equity Indexes
Japan’s Nikkei 225 Stock Average increased 0.8 percent this week, and Australia’s S&P/ASX 200 Index gained 0.4 percent. Taiwan’s Taiex Index jumped 2.1 percent, the most among benchmark indexes in the Asia Pacific. China’s Shanghai Composite Index advanced 1.4 percent, while Hong Kong’s Hang Seng Index lost 1.1 percent.
India’s Sensitive Index dropped 3.2 percent, the most among benchmark indexes in the Asia Pacific, after the nation’s central bank on Jan. 25 raised the benchmark interest rate to a two-year high and signaled further increases in borrowing costs as it battles surging inflation.
Asian exporters advanced after Federal Reserve policy makers maintained plans to buy $600 billion of Treasuries through June to stimulate growth in the world’s biggest economy.
Sony Corp., the maker or Bravia televisions and PlayStation game consoles, gained 2.9 percent to 2,908 yen. HTC Corp., a Taiwanese maker of mobile phones that counts the U.S. as its biggest market, surged 10 percent to NT$979 in Taipei.
“The introduction of further stimulus measures in the U.S. should help support jobs and the housing sector,” said Yoji Takeda, who helps manage $1.1 billion in Hong Kong at RBC Investment Management (Asia) Ltd. “The economic environment is improving and corporate earnings are growing. That’s good for equities.”
Samsung, S-Oil, Keppel
Samsung Electronics gained 4 percent to 1.01 million won in Seoul, its highest close on record, after the company reported yesterday that fourth-quarter profit increased 13 percent to 3.42 trillion won ($3.1 billion). That surpassed the 3.1 trillion-won average estimate by six analyst estimates compiled by Bloomberg.
S-Oil Corp., South Korea’s third-biggest oil refiner, surged 20 percent to 112,000 won, the most on the MSCI Asia Pacific Index. The company said on Jan. 27 fourth-quarter profit was 322.7 billion won, exceeding the 276.8 billion-won median profit estimate of 11 analysts surveyed by Bloomberg News.
In Singapore, Keppel, the world’s No. 1 builder of oil rigs, jumped 5.8 percent to S$12.02 after saying fourth-quarter profit increased 17 percent to S$403 million ($314 million). That surpassed the S$371.3 million average estimate of four analysts compiled by Bloomberg.
Honda Motor increased 7.6 percent to 3,525 yen in Tokyo after Nomura raised its rating to “buy” from “neutral.”
Japanese Banks Drop
Japanese banks declined after Standard & Poor’s cut the nation’s credit rating on Jan. 27 for the first time in nine years as persistent deflation and political gridlock undermine efforts to reduce a 943 trillion yen ($11 trillion) debt burden, the world’s biggest.
Mitsubishi UFJ sank 2 percent to 434 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender, lost 1.9 percent to 2,870 yen.
The rating cut “is negative for banks that hold government bonds,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Nicolas Johnson at nicojohnson@bloomberg.net.
