Asian Stocks Ex-Japan Advance, Led by Chinese Shares

Asian stocks outside Japan rose, with a regional gauge heading for an almost two-week high, as Chinese shares rallied after a regulator said China can boost by 10 times quotas for foreign investment in its financial markets.

Citic Securities Co., China’s biggest listed stock brokerage, jumped 6.2 percent in Hong Kong. China Railway Group (390) Ltd. added 1 percent after saying it won contracts worth 29.8 billion yuan ($4.8 billion). Li & Fung Ltd., the world’s top supplier of clothes and toys to retailers, slumped 15 percent after operating income dropped. Developer CapitaLand Ltd. (CAPL) sank 5.1 percent in Singapore after the city’s government announced extra property cooling measures.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) increased 0.5 percent to 478.40 as of 7:12 p.m. in Hong Kong, trading close to a 17-month high. The gauge has risen 2.7 percent this year, extending a 12 percent rally in the last four months of 2012, as data on manufacturing and exports showed China’s economy is recovering.

“I’d stay positive on equities as the environment remains conducive,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “Global leading indicators are turning up and interest rates remain quite low. In the short-term, there’s scope for investors to take some profit off the table,”

Reports on gross domestic product, retail sales and industrial output due on Jan. 18 may show growth in the world’s second-largest economy is accelerating.

China’s Shanghai Composite Index (SHCOMP) climbed 3.1 percent, the most since Dec. 14. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong rose 1.4 percent, while the city’s benchmark Hang Seng Index gained 0.6 percent to the highest since June 2011.

China Rally

The “uptrend” for Chinese equities remains unchanged, David Li, UBS AG chairman and country head for China, said in an interview in Bloomberg’s Shanghai office. China’s stocks are poised to rise 20 percent this year, bolstered by the government’s efforts to boost domestic spending and accelerate urban development, he said.

Brokerages and insurers rallied. China can increase by 10 times the size of two investment programs that allow investors to buy securities on domestic markets, Guo Shuqing, chairman of the China Securities Regulatory Commission, said at a conference in Hong Kong today.

Citic Securities jumped 6.2 percent to HK$20.15. Haitong Securities Co., China’s second-largest brokerage, climbed 5.5 percent to HK$13.34. China Life Insurance Co., the nation’s biggest insurer, advanced 2.9 percent to HK$26.75.

Citic Telecom

China Railway Group gained 1 percent to HK$4.88. The company won 11 contracts to build railways, bridges and other rail infrastructure.

Citic Telecom International Holdings Ltd. surged 13 percent to HK$2.53. The company, a unit of China’s largest state-owned investment firm, agreed to buy 79 percent of Macau’s monopoly fixed-line phone operator for $1.16 billion.

SK Telecom Co., South Korea’s largest mobile-phone operator, climbed 4.2 percent to 160,500 won on speculation four-quarter profit rise. Operating profit may gain 50 percent to 488.9 billion won ($463 million) in the fourth quarter as the company lures more subscribers, topping the average analyst estimate of 418.7 billion won, Eugene Investment & Securities Co. said in a report today.

Australia’s S&P/ASX 200 Index added 0.2 percent, paring earlier gains as home-loan approvals unexpectedly dropped in November. South Korea’s Kospi Index rose 0.5 percent. Taiwan’s Taiex Index rose 0.1 percent. The Japanese equity market is shut for a holiday.

Singapore’s Straits Times Index slid 0.3 percent as new curbs on the property market dragged developers lower.

U.S. Futures

The MSCI Asia Pacific Index, which includes Japan, fell for the first time in eight weeks last week as China’s inflation accelerated. The gauge traded at 14.2 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.

Futures on the S&P 500 Index gained 0.1 percent today. The benchmark index for U.S. equities, which climbed to a five-year high last week, closed almost unchanged on Jan. 11 as banks slumped.

Li & Fung (494), which counts Wal-Mart Stores Inc. among its customers, tumbled 15 percent to HK$11.74. Operating income dropped 40 percent last year because of weaker orders at its U.S. business, the company said it a preliminary earnings estimate on Jan. 11.

Property Curbs

Developers in Singapore slumped as the city-state stepped up measures to cool housing and industrial property prices. Homebuyers must pay between 5 percentage points and 7 percentage points more in stamp duties starting Jan. 12, the government said in a statement on Jan. 11. It also added a levy for sellers of industrial buildings and imposed a tax of as much as 15 percent if the properties are sold within a year.

CapitaLand, Southeast Asia’s biggest developer, decreased 4.1 percent to S$3.73. City Developments Ltd. (CIT), Singapore’s second-largest homebuilder, sank 7.5 percent to S$11.65. Keppel Land Ltd. slid 7.2 percent to S$3.97.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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