Asian Stocks Rise, Erasing Losses, on China Easing
(Corrects job title in third paragraph of story that originally ran Jan. 9.)
Asian stocks (MXAPJ) reversed losses as shares of Chinese lenders and developers rallied after China’s new lending and money supply increased. Exporters dropped after a Federal Reserve official said the central bank probably won’t begin a new round of bond purchases.
Samsung Electronics Co. (005930), the world’s second-biggest maker of mobile phones by sales, decreased 2.3 percent in Seoul. HTC Corp. (2498) sank 5.2 percent in Taipei as the maker of smartphones posted its first drop in quarterly profit in two years. Industrial & Commercial Bank of China Ltd. and China Overseas Land & Investment Ltd. led a rally among China’s lenders and developers as the new loans and money supply data stoked speculation the government is already taking steps to ease a cash crunch.
“It shows the government’s policy of fine-tuning monetary policies is taking effect,” Ha Jiming, vice chairman and chief investment strategist in Goldman Sachs Group Inc.’s investment management division for China, said in an interview with Bloomberg Television today. “The government is able to engineer a soft landing, maintaining economic growth at around 8 percent. The market this year will have some opportunities.”
The MSCI Asia Pacific excluding Japan Index (MXAPJ) gained 0.2 percent to 397.04 as of 6:44 p.m. in Hong Kong, erasing losses of as much as 1.3 percent earlier. The measure gained 0.9 percent last week as manufacturing growth from the U.S., Australia, China and India added to signs the global economy may withstand Europe’s debt crisis.
Australia’s S&P/ASX 200 Index (AS51) lost 0.1 percent after the country’s retail sales unexpectedly stalled. South Korea’s Kospi Index dropped 0.9 percent. The Philippine Stock Exchange Index jumped to a five-month high after central bank chief Amando Tetangco said he anticipates easing monetary policy this quarter.
Shanghai Share Rally
China’s Shanghai Composite Index climbed 2.9 percent on speculation the government is taking steps to improve liquidity as the economy slows. Hong Kong’s Hang Seng Index (HSI) gained 1.5 percent, reversing earlier losses of as much as 1.6 percent. Japanese markets were closed today for a holiday.
Futures on the Standard & Poor’s 500 Index (SPH2) climbed 0.1 percent, erasing losses of as much as 0.5 percent today. The gauge fell 0.3 percent in New York on Jan. 6 as a drop in the U.S. unemployment rate to 8.5 percent, the lowest since February 2009, failed to extend a weekly rally.
Exporters to the U.S. declined after Bullard said the Federal Reserve “probably could wait and see for now” before deciding whether there is a need for more accommodative policies.
Europe Risk Remains
Samsung Electronics dropped 2.3 percent to 1.016 million won in Seoul. James Hardie Industries SE (JHX), a building materials supplier that counts the U.S. as its biggest market, lost 0.7 percent to A$6.70 in Sydney.
“An improving U.S. economy doesn’t necessarily mean we’re firmly in a recovery,” said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversees about $326 billion of assets globally. “The question is how sustainable that will be. Europe remains a risk. We’ll probably see more pain before we see a resolution.”
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet today in Berlin for the first time in 2012 as they seek to craft a plan to rescue the euro over the next three months.
The MSCI Asia Pacific Index (MXAP) lost 17 percent in 2011 as China took steps to cool its property market and Europe struggled to resolve its debt crisis. The S&P 500 Index broke even for the year and the Stoxx Europe 600 Index dropped 11 percent. Stocks in the Asian gauge were valued at 12 times estimated earnings on average as of Jan. 6, compared with 12.1 times for the S&P 500 and 9.9 times for the Stoxx 600.
HTC, Asia’s second-largest smartphone maker, dropped 5.2 percent to NT$457 in Taipei. The company said fourth-quarter net income dropped 26 percent from a year earlier to NT$11 billion ($364 million) amid competition from Apple Inc. and Samsung Electronics.
E Ink Holdings Inc. (8069), a Taiwanese maker of liquid crystal displays, sank 6.9 percent to NT$35.75, the most on the MSCI Asia Pacific Excluding Japan Index. The company’s December sales slid 84 percent from a year earlier to NT$365.70 million.
Among stocks that advanced, ICBC, the world’s biggest lender by market value, climbed 2.8 percent to HK$4.84 in Hong Kong. China Construction Bank Corp., the nation’s No. 2 lender, gained 2 percent to HK$5.54. China Overseas Land (688), the largest Chinese developer listed in Hong Kong, rose 2.7 percent to HK$12.74. China Resources Land Ltd. (1109), a state-owned real estate company, increased 2 percent to HK$12.32.
Chinese new loans totaled 640.5 billion yuan ($101 billion) last month, the highest amount since April, the People’s Bank of China said in a statement yesterday. That exceeded the estimates of all 18 economists surveyed by Bloomberg. M2, a measure of money supply, rose 13.6 percent, the fastest pace since July, it said. That compared with the 12.9 percent median of 18 estimates.
“This is better-than-expected monetary data, suggesting monetary conditions have started to ease,” said Liu Li-Gang, a Hong Kong-based economist with Australia & New Zealand Banking Group Ltd., who previously worked at the World Bank. Liu said he expects that the central bank may cut the reserve requirement again before the Lunar New Year on Jan. 23. “Such easing will help ensure a soft landing for the Chinese economy,” he said.
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