Tuesday, 13 August 2013

Asia Stocks Rise for Fourth Day as Japan’s Topix Advances

By Jonathan Burgos & Toshiro Hasegawa - Aug 13, 2013 2:17 AM PT
Asian stocks rose for a fourth day, with Japanese shares gaining as the yen weakened after a report Prime Minister Shinzo Abe is considering a corporate-tax cut and data showed machinery orders beat estimates.
Honda Motor Co. (7267), which gets 83 percent of sales from overseas, increased 1.9 percent, pacing gains among Japanese exporters. Sony Financial Holdings Inc., the financial services unit of electronics maker Sony Corp., jumped 2.8 percent in Tokyo after proposing a higher dividend. Newcrest (NCM) Mining Ltd. slipped 2.3 percent as brokers cut ratings on shares ofAustralia’s biggest gold producer.
Asia Stocks Rise for Fourth Day as Japan’s Topix Advances on Yen A pedestrian looks at an electronic stock board outside a securities firm in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg
Aug. 13 (Bloomberg) -- Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., talks about China's economy and stock market. He also discusses central bank monetary policies of the U.S. and Japan with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
The MSCI Asia Pacific Index added 0.9 percent to 135.33 as of 5:15 p.m. in Hong Kong, with about six shares rising for each that fell. Nine of 10 industry groups gained on the gauge, which is headed for its longest winning streak in six weeks.
“The yen returning to the 97 level is positive and a corporate tax cut would be reflected on company earnings directly, so its impact on the market would be huge,” Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit ofJapan’s second-biggest lender by market value, said by telephone. “The U.S. economy isn’t doing too badly and the dollar was sold off too much.”
Abe called for a study of lower rates on businesses as a counterweight to a sales-levy increase, the Nikkei newspaper reported, citing unidentified people in the government. Japan may raise the consumption tax three percentage points next year to rein in a national debt of more than twice gross domestic product.

Machinery Orders

Japan’s Topix index climbed 2 percent, with trading volume 30 percent below the 30-day average. The Nikkei 225 Stock Average increased 2.6 percent. The nation’s core machinery orders increased 4.9 percent in June from a year earlier, exceeding estimates for a 2.6 percent gain, data today from the Cabinet Office showed.
Hong Kong’s Hang Seng Index rose 1.1 percent, while the Hang Seng China Enterprises Index advanced 2.6 percent to cap its biggest four-day advance since December 2011. China’s Shanghai Composite Index added 0.2 percent. South Korea’s Kospi index (KOSPI) jumped 1.5 percent, Taiwan’s Taiex index increased 1.1 percent. Singapore’s Straits Times Index gained 0.4 percent. Australia’s S&P/ASX 200 Index added 1 percent, closing at the highest level in almost three months. New Zealand’s NZX 50 Index advanced 0.1 percent.
Data this week may bolster the global economic outlook. U.S. retail sales probably climbed a fourth month in July, while industrial output in the euro region rose the most in June since 2011, according to surveys of economists by Bloomberg before data due today. A report tomorrow will probably show the euro-zone economy grew the first time in seven quarters in the second quarter, a separate poll showed.

BOJ Minutes

The Bank of Japan released minutes of its July meeting today indicating it expects moderate growth in the economy.
“Market participants are hyper-sensitive to data right now,” Ravi Bharadwaj, a senior market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said by telephone. “Forward expectations are certainly helping the dollar to push sharp gains.”
Japanese exporters advanced as the yen fell 0.5 percent to 97.35 per dollar. Honda gained 1.9 percent to 3,795 yen. Toyota Motor Corp. (7203), Asia’s largest carmaker, added 2.3 percent to 6,330 yen. Canon Inc., a camera maker that gets 80 percent of sales outside Japan, rose 1.9 percent to 3,190 yen.

Earnings Season

The MSCI Asia Pacific last week declined 1.3 percent, snapping the longest weekly winning streak since January. The benchmark regional equities gauge traded at 13 times estimated earnings yesterday, compared with 15.3 for the Standard & Poor’s 500 Index and 13.9 times for the Stoxx Europe 600 Index.
About 51 percent of the companies on the Asia-Pacific gauge that have posted profits this earnings season beat analysts’ estimates, data compiled by Bloomberg show.
Japan’s top-listed companies doubled earnings last quarter from a year earlier, with profit rising 103 percent and beating analysts’ estimates by 16 percent, the most in two years, data compiled by Bloomberg show. Companies topping estimates include Toyota, Sony Corp., Shiseido Co. and Kobe Steel Ltd.
Even after falling for the past three months, the Topix index is still up 35 percent this year, retaining Japan’s position as the world’s best-performing developed equity market. The measure has risen amid optimism Abe will push through reforms while the Bank of Japan provides record stimulus to spur a recovery in Asia’s second-largest economy.
Sony Financial gained 2.8 percent to 1,703 yen in Tokyo after saying it will increase its full-year dividend to 30 yen, up from a previous plan for a 25 yen payout.

China Resources

China Resources Land Ltd., the second-largest mainland developer traded in Hong Kong, jumped 6 percent to HK$23.95 as property shares extended yesterday’s gains.
Stockland sank 2.9 percent to A$3.70. Australia’s biggest diversified property trust said full-year profit fell 79 percent amid challenging conditions in its residential business.
Newcrest declined 2.3 percent to A$12.10. Deutsche Bank AG and Macquarie Group Ltd. analysts lowered their recommendations on the shares after the miner yesterday said it will cut costs further if prices keep declining. The gold producer booked a record full-year loss on a A$6.2 billion ($5.7 billion) writedown.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The U.S. benchmark slid 0.3 percent in New York yesterday after Japan’s economic expansion missed estimates and investors awaited today’s U.S. retail data for hints on when the Fed will curtail bond buying. Sales probably rose 0.3 percent after a 0.4 percent advance in June, according to a Bloomberg survey.
To contact the reporters on this story: Jonathan Burgos in Singapore atjburgos4@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net
To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net