Asian Stock Gauge Little Changed This Week on Valuations

Asia’s benchmark stock index was little changed this week as investors weighed signs of a stronger global economy against concern about equity valuations.

Li & Fung Ltd. (494), a supplier of toys and clothes to shops including Wal-Mart Stores Inc., jumped 3.8 percent as data on U.S. retail sales beat estimates. BHP Billiton Ltd., added 4 percent in Sydney as Citigroup Inc. said the world’s biggest mining company needs less capital to fund growth than two years ago. GungHo Online Entertainment Inc., a Japanese producer of online games that posted the biggest advance on the MSCI Asia Pacific Index last year, sank 4.3 percent.

The MSCI Asia Pacific Index was little changed at 139.56 on the week and has dropped 1.3 percent since Dec. 31, after rising 9.3 percent in 2013. The benchmark measure ended last year trading at 14.1 times estimated earnings, compared with a three-year average of 13 times, data compiled by Bloomberg show. Exporters advanced this week after the World Bank raised its forecast for global economic growth this year.

“A synchronized global recovery will benefit Asian exporters and raw material producers, Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees $131 billion, said by phone. ‘‘We’ve had pretty good run at the end of last year and we’re seeing a bit of profit taking.”

Japan’s Topix index slipped 0.1 percent this week after climbing 51 percent in 2013. Australia’s S&P/ASX 200 Index fell 0.1 percent, while New Zealand’s NZX 50 Index gained 0.6 percent. South Korea’s Kospi added 0.3 percent. Singapore’s Straits Times Index rose 0.1 percent. Taiwan’s Taiex index advanced 0.8 percent. Hong Kong’s Hang Seng Index (HSI) climbed 1.3 percent.

Thai Turmoil

Thailand’s SET Index jumped 3.2 percent, rising for a second week. The nation’s central bank will probably will cut its benchmark interest rate for a second straight time next week as protests to oust Prime Minister Yingluck Shinawatra’s government crimp economic growth. Yingluck dissolved parliament in December and has spent weeks resisting anti-government protesters who want to remove her and the influence of her brother, Thaksin.

Exporters advanced. Li & Fung rose 3.8 percent to HK$11.04 in Hong Kong. Lenovo Group Ltd., the world’s largest maker of personal computers, jumped 9.3 percent to HK$10.04. Samsung Electronics Co., Asia’s biggest technology company, gained 1.6 percent to 1.3 million won in Seoul.

Global Economy

The Washington-based World Bank sees the global economy expanding 3.2 percent this year, compared with a June projection of 3 percent and up from 2.4 percent in 2013. The forecast for the richest nations was raised to 2.2 percent from 2 percent. Part of the increase reflects improvement in the 18-country euro area, with the U.S. ahead of developed peers, growing twice as fast as Japan.

U.S. retail sales rose in December, climbing 0.2 percent compared with the 0.1 percent gain forecast by economists surveyed by Bloomberg. A measure of purchases excluding vehicles jumped by the most in almost a year. An improvement in the world’s largest economy is underpinning inflation, limiting firings and lifting consumers’ moods, brightening the outlook for growth at the start of 2014.

Taiwan Semiconductor Manufacturing Co., the world’s largest contract manufacturer of chips, surged 5.4 percent to NT$107.50. The company said it expects full-year sales and profit to climb at least 10 percent this year as demand for mobile devices offsets higher depreciation costs.

BHP Upgrade

BHP gained 4 percent to A$37.89 this week. Citigroup raised its rating on the company to buy from neutral as the brokerage turned bullish on the mining sector for the first time in three years.

“Improvements in European and US growth are supportive for commodities and weakening commodity currencies are providing a fillip for the miners,” analysts led by Heath R. Jansen wrote in a note dated Jan. 16.

Among stocks that declined, GungHo Online sank 4.3 percent to 694 yen in Tokyo. The online game producer that’s partly owned by SoftBank Corp. surged 775 percent last year, making it the best performer on the MSCI Asia Pacific Index.

Great Wall Motor Co., China’s No. 1 maker of sport-utility vehicles, plunged 9.9 percent to HK$35.05 in Hong Kong after delaying the introduction of its Haval H8 model for three months to address technical deficiencies.

Super Retail Group Ltd. (SUL) tumbled 17 percent to A$10.79, the biggest weekly decline since February 2008, after the Australian store operator forecast first-half profit that missed analyst estimates.

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

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.