Asian Shares Outside Japan Gain This Week on U.S. Economic Data

Asian shares outside Japan rebounded this week as U.S. economic reports showed signs of recovery in the world’s biggest economy, even as concern mounted that Europe’s sovereign debt crisis is worsening.

James Hardie Industries SE (JHX), a supplier of building materials that counts the U.S. as its biggest market, advanced 2.8 percent in Sydney. Wharf Holdings Ltd., the developer controlled by the family of billionaire Peter Woo, surged 9.8 percent in Hong Kong after underlying profit beat estimates. Toyota Motor Corp., the world’s biggest carmaker, slid 0.4 percent in Tokyo as the yen gained against the dollar and euro. GS Yuasa Corp. tumbled 9.2 percent after its batteries caught fire in a Mitsubishi Motors Corp. factory and another melted in an electric car.

The MSCI Asia Pacific Index gained 0.9 percent to 135.56 this week, capping a 4.8 percent gain for the quarter. The measure’s third consecutive quarterly advance is its longest such winning streak since March 2010. The gauge rallied this year as improving economic data from the U.S. and speculation that Japan will deploy more stimulus countered concern China will move to cool its property market.

“Average U.S. investors feel more secure about their jobs, seeing their house prices go up, and think the crisis is well behind them,” said Andrew Pease, Sydney-based chief strategist at Russell Investment Group, which oversees about $160 billion. “We like emerging markets and Asia simply because, even though there’s concern about Chinese policy tightening, earnings numbers still look good.”

Relative Value

The MSCI Asia Pacific Index trades at 15 times average estimated earnings, compared with 14.2 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600 Index (SXXP), according to data compiled by Bloomberg.

The Topix Index, Japan’s broadest share gauge, slid 0.4 percent this week. The Nikkei 225 Stock Average gained 0.5 percent to cap its best back-to-back quarterly performance since 1972. China’s Shanghai Composite Index slumped 3.9 percent. Australia’s S&P/ASX 200 was little changed. South Korea’s Kospi Index advanced 2.9 percent, while Taiwan’s Taiex Index gained 1.6 percent.

Hong Kong’s Hang Seng Index (HSI) climbed 0.8 percent, paring its first quarterly loss since June. The gauge dropped 1.6 percent this year.

Markets in Hong Kong, Australia, New Zealand, Singapore and India were closed yesterday for a holiday. Hong Kong, New Zealand and Australia will reopen on April 2.

Property Values

Stocks rose after residential real estate prices increased in January by the most since June 2006, according to the S&P/Case-Shiller index on March 26. Orders for durable goods climbed more than forecast in February, propelled by automobiles and a rebound in commercial aircraft, a Commerce Department report showed. The S&P 500 rose to a record, wiping out losses from the financial crisis.

James Hardie, which gets almost 70 percent of its sales in the U.S., advanced 2.8 percent to A$10.01. Samsung Electronics Co., a South Korean consumer-electronics exporter that counts the Americas as its biggest market, gained 5 percent to 1.527 million won in Seoul. Techtronic Industries Co. (669), a maker of power tools that relies on North America for 72 percent of revenue, increased 2.6 percent to HK$18.90 in Hong Kong.

Shares in Hong Kong gained this week during the busiest week for earnings, with about 240 companies reporting. About half of the firms on the Hang Seng Composite Index that reported earnings since Jan. 1, and for which Bloomberg has estimates, exceeded analysts’ forecasts, according to data compiled by Bloomberg.

Wharf, Shimao

Wharf Holdings (4), Hong Kong’s third-biggest developer, surged 9.8 percent to HK$69.20. The company reversed losses, reporting underlying profits for the fiscal year of HK$11 billion, beating the HK$10.7 billion estimated by 17 analysts surveyed by Bloomberg.

Shimao Property Holdings Ltd., controlled by billionaire Hui Wing Mao, jumped 8.8 percent to HK$14.90, after boosting its sales target 19 percent to 55 billion yuan.

China Petroleum & Chemical Corp. (386), Asia’s biggest refiner, gained 4.5 percent to HK$9.14 in Hong Kong. The energy company reported net income of 63.9 billion yuan ($10.3 billion), more than the 61.8 billion yuan mean of 26 analysts’ estimates compiled by Bloomberg.

“The U.S. is experiencing the best scenario in that its economy is going strong while risk remains for the rest of the world, namely Europe,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($158 billion).

Europe Concern

Concern Europe’s debt crisis is deepening grew even after European finance officials agreed on a bailout for Cyprus as Italy fails to end a political deadlock.

HSBC Holdings Plc (5), Europe’s biggest lender, sank 1.3 percent to HK$82. Esprit Holdings Ltd., a clothier that gets about 80 percent of sales from Europe, dropped 1.4 percent to HK$9.34. Nippon Sheet Glass Co., a Japanese glassmaker that counts Europe as its biggest market, slid 2.8 percent to 106 yen.

European governments and the International Monetary Fund agreed Monday to lend Cyprus 10 billion euros ($13 billion) as long as the country liquidated its second-largest bank and forced losses on bank bondholders and deposits of more than 100,000 euros. Concern spread that the agreement lowers the barrier for deposits being used to fund bailouts elsewhere.

Italian 10-year government bond yields jumped 21 basis points on March 27 as Italy’s Democratic Party leader Pier Luigi Bersani said there was no chance of a broad coalition.

Japan Exporters

Japanese exporters declined after the yen strengthened 0.3 percent this week against the dollar. A stronger yen trims the overseas earnings of Japanese exporters when repatriated.

Toyota fell 0.4 percent to 4,860 yen. Honda Motor Co., an automaker that gets about 80 percent of its sales outside of Japan, fell 2.6 percent to 3,555 yen. Canon Inc., the world’s biggest camera maker, lost 2.9 percent to 3,400 yen.

Among other stocks that fell, GS Yuasa dropped 9.2 percent to 381 yen. One of the company’s lithium-ion batteries caught fire while being tested at a Mitsubishi Motors factory in Japan last week and another melted in an electric car. The incidents are the latest involving the Kyoto-based maker as U.S. and Japanese authorities probe the cause of overheated batteries that grounded Boeing Co.’s 787 Dreamliners in January.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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