Asian Stocks Post Biggest Weekly Advance Since July

Asian stocks rose this week, with the regional benchmark index posting its biggest weekly advance since April, as data from China, Europe and the U.S. boosted optimism the global economy is recovering.

Honda Motor Co., which gets about 83 percent of sales outside Japan, jumped 6.8 percent in Tokyo. China Cosco Holdings Co. (1919) climbed 9.8 percent in Hong Kong, pacing gains among the region’s shipping companies after a gauge of cargo rates increased to a 21-month high. Billabong (BBG) International Ltd. rose 4.7 percent after the Australian surfwear company said Coastal Capital International Ltd. is seeking a board shakeup.

The MSCI Asia Pacific Index advanced 2.8 percent to 133.76 this week after declining in three of the past four. Shares in China and Hong Kong led the advance after reports showed a gauge of Chinese manufacturing increased to a 16-month high and the nation’s services industry expanded. U.S. service industries grew in August at the fastest pace in almost eight years.

“The market rebounded as we are getting improving economic data,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages more than $130 billion. “With that improvement in economic data, we’ve seen a surge in bond yields and that’s bad for emerging markets with high current account deficits. Given this, the volatility in the equity market is likely to remain high.”

Yields on 10-year U.S. treasuries rose to a two-year high of 3.005 percent before sliding to 2.93 percent in New York after a report of slower-than-forecast jobs growth eased concern the Federal Reserve will cut stimulus.

Fed Tapering

The Fed has said any reduction in stimulus will be tied to a sustained recovery in the U.S. economy. U.S. payrolls rose by 169,000 last month, less than the 180,000 estimate in a Bloomberg survey of economists and easing concern about the size of potential cuts to Fed bond purchases when policy makers meet Sept. 17-18.

Hong Kong’s Hang Seng Index climbed 4.1 percent, the most since September 2012. China’s Shanghai Composite Index rose 2 percent, extending gains for a second week. Taiwan’s Taiex index advanced 1.8 percent.

Japan’s Topix index jumped 3.8 percent this week as the Japanese yen weakened. South Korea’s Kospi index gained 1.5 percent. Singapore’s Straits Times Index added 0.6 percent. New Zealand’s NZX 50 Index rose 1.2 percent.

Australia’s S&P/ASX 200 Index climbed 0.2 percent ahead of this weekend’s election, which polls indicate will see Prime Minister Kevin Rudd’s minority Labor government lose to Tony Abbott’s Liberal-National coalition.

Exporters Rise

Exporters advanced after reports showed fewer Americans filed for unemployment benefits as U.S. companies boosted payrolls CHECK and euro-area services and factory output expanded for a second month in August. Japanese carmakers and electronics manufacturers also gained as the yen fell.

Honda climbed 6.8 percent to 3,785 yen in Tokyo. Toyota Motor Corp., Asia’s biggest carmaker, rose 4.6 percent to 6,210 yen. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, gained 5.8 percent to 2,087 yen.

Shipping companies rallied after the Baltic Dry Index (BDIY), which measures the cost of shipping commodities from iron ore to corn, jumped 19 percent this week in London, the biggest weekly advance since August 2010.

China Cosco rose 9.8 percent to HK$3.91 in Hong Kong. STX Pan Ocean Co. (028670), South Korea’s biggest bulk-shipping company, jumped 23 percent to 2,750 won in Seoul. Kawasaki Kisen Kaisha Ltd., which transports commodities from grains to iron ore, added 7.2 percent to 238 yen in Tokyo.

Billabong, Minzhong

Billabong rose 4.7 percent to 44.5 Australian cents. The surfwear maker, approached with five takeover or refinancing proposals since February 2012, said 5 percent stakeholder Coastal Capital is seeking a board shakeup.

China Minzhong Food Corp., the vegetable producer that had slumped after allegations by a short-seller, more than doubled to S$1.12 in Singapore after Indonesian billionaire Anthoni Salim’s PT Indofood Sukses Makmur, its largest shareholder, offered S$488 million ($381 million) cash for the rest of the company. Indofood tumbled 8.5 percent to 5,950 rupiah in Jakarta.

Everbright Securities Co., which was ordered by China’s securities regulator to pay a record 523 million yuan ($85 million) slumped 8.9 percent to 9.17 yuan in Shanghai after investors in Guangzhou and Shanghai sued the company.

Everbright roiled China’s markets on Aug. 16 with 23.4 billion yuan of erroneous stock purchase orders and later trades to offset the mistake, leading to it being barred from most proprietary trading, lifetime bans from the securities market for four executives and the resignation of the brokerage’s president.

HTC Corp. (2498), Taiwan’s biggest smartphone maker, tumbled 16 percent to NT$131 after reporting a 45 percent decline in sales for August.

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

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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