Asia Stocks Rise to 4-Month High on China Property Shares

Asian stocks rose, sending the regional benchmark index to the highest level in four months, as equities in Hong Kong jumped amid speculation China will do more to support the property market.

China Overseas Land & Investment Ltd., the largest mainland developer listed in Hong Kong, surged 4.1 percent after the People’s Bank of China told lenders to expedite home loans. Nexon Co., a developer of online games listed in Tokyo, jumped 12 percent after announcing a plan to buy back shares. Kadokawa Corp. and Dwango Co. soared in Tokyo on a report they would merge, which was confirmed after the close.

The MSCI Asia Pacific Index rose 0.8 percent to 140.5 as of 6:58 p.m. in Hong Kong for the highest level since Jan. 13, as all of its 10 industry groups climbed. The measure jumped 1.1 percent yesterday, the biggest gain since March 24.

“There are expectations that some of the softer macroeconomic data out of China will prompt some stimulus,” said Daphne Roth, the Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $207 billion. “We still believe global economic growth will trend higher. Macro data out of the developed countries continue to confirm that.”

China’s central bank told 15 lenders including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. at a meeting on May 12 to “improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers,” according to a statement posted on its website yesterday.

ICBC added 2.1 percent to HK$4.79. China Construction Bank gained 2 percent to HK$5.50. China Overseas Land rose 4.1 percent to HK$19.84.

Regional Gauges

Besides pushing for easier access to housing loans, “China’s central government is trying to let local governments make minor adjustments to policies, and that’s helping developers rebound,” said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong. “But the lack of liquidity in the market won’t be so easy to resolve.”

Japan’s Topix (TPX) index added 0.4 percent to close at a five-week high. South Korea’s Kospi index jumped 1.4 percent, the most since Feb. 21. Taiwan’s Taiex index rose 0.6 percent. Singapore’s Straits Times Index increased 1.1 percent as the market reopened following a holiday.

Australia’s S&P/ASX 200 Index ended the day little changed after the government released a budget in which it raised taxes on high-income earners, cut spending on welfare and health, and outlined public service job losses. New Zealand’s NZX 50 Index added 0.3 percent.

China Shares

Hong Kong’s Hang Seng Index advanced 1 percent. The Hang Seng China Enterprises Index of mainland companies traded in the city soared 1.4 percent. As of yesterday, the so-called H-share index had slumped 13 percent since Nov. 18, when it surged the most in two years after the Communist Party outlined economic reforms. The Shanghai Composite Index lost 0.1 percent today.

While the China’s November policy package led Goldman Sachs Group Inc. to raise its recommendation on Chinese shares to overweight and spurred Citigroup Inc. to predict returns of at least 20 percent in 2014, investors have shifted their focus to the depth of the economic slowdown in the world’s second-biggest economy.

Instead of boosting stocks, the government’s emphasis on reform may impede gains as policy makers downplay the importance of short-term growth, according to CLSA Asia-Pacific Markets.

The Standard & Poor’s 500 Index added less than 0.1 percent and the Dow Jones Industrial Average rose 0.1 percent yesterday, both extending all-time highs. Futures on the S&P 500 were little changed today.

U.S. Economy

U.S. retail sales increased 0.1 percent in April following a revised 1.5 percent jump in March that marked the biggest gain in four years, Commerce Department figures showed yesterday in Washington. The median forecast of economists surveyed by Bloomberg projected a larger advance last month.

Among companies on the Asian gauge that reported quarterly results since April 1 and for which Bloomberg had estimates, 52 percent beat profit expectations, according to data compiled by Bloomberg.

Nexon soared 12 percent to 921 yen in Tokyo, the biggest jump since it listed in 2011. It plans to spend as much as 10 billion yen ($98 million) to buy back as many as 12.5 million shares, it said yesterday. Net income for the quarter ended March rose 6.6 percent to 16.1 billion yen.

Dwango Merger

Dwango, which provides content through mobile phones and operates the Niconico video-delivery website, jumped 9 percent to 2,798 yen. Kadokawa, which publishes books and produces movies, videos and game software, surged 10 percent to 3,465 yen. The two will merge under a holding company in October, according to a statement to the Tokyo Stock Exchange after the market close today. The Nikkei newspaper had earlier reported the plan, without citing anyone.

Bank of China Ltd., the nation’s fourth-largest lender by market value, added 1.7 percent to HK$3.49 in Hong Kong after announcing it will seek 100 billion yuan ($16 billion) from selling preferred stock.

Among shares that fell, JGC Corp. plunged 13 percent to 2,910 yen. The operator of industrial plants said it was targeting full-year net income of 42 billion yen for the current fiscal year, compared with the 52.6 billion yen analysts estimated.

The Asia-Pacific gauge traded at 12.8 times estimated earnings, compared with 16.1 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net John McCluskey, Tom Redmond

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