Asian Stocks Advance on Stimulus Bets After BOJ Decision

Asian stocks rose after the Bank of Japan maintained its asset-purchasing program before its governor steps down next month. An unexpected contraction in Japan’s economy fueled speculation policy makers will boost efforts to end deflation.

Asahi Group Holdings Ltd. advanced 5.8 percent as the biggest beer maker in Japan by market share said it will buy back as much as 4.3 percent of its stock and forecast profit will rise 15 percent. Alumina Ltd. soared 7.5 percent in Sydney after Citic Resources Holdings Ltd. agreed to buy a stake in the company for A$452 million ($468 million). Singapore Telecommunications Ltd. lost 2.2 percent as earnings declined on charges at its Australian and Philippine businesses.

The MSCI Asia Pacific Index climbed 0.3 percent to 133.64 as of 6:24 p.m. in Tokyo. About four shares advanced for each three that fell. Hong Kong’s market reopened today while China, Taiwan and Vietnam remain shut for the Lunar New Year.

“Once the new governor takes over, we’ll see an acceleration of the pace of monetary easing,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has about $126 billion under management. “Valuations remain reasonable and monetary policy will remain accommodative. We’re starting to transition into a phase where global growth picks up and that transfers through to earnings.”

Bank of Japan Governor Masaaki Shirakawa and his colleagues left monetary policy unchanged, as forecast by all 20 economists surveyed by Bloomberg News, while raising their assessment for the economy. Shirakawa and his two deputies step down on March 19.

Inflation Target

The central bank last month set a 2 percent inflation target urged by Prime Minister Shinzo Abe, while stopping short of immediate action to achieve it. The BOJ pledged to begin open-ended asset purchases next year to stimulate the economy.

Japanese gross domestic product contracted an annualized 0.4 percent in the three months through December, following a revised 3.8 percent contraction in the previous quarter, the Cabinet Office said in Tokyo today. The median forecast of 32 economists surveyed by Bloomberg News was for 0.4 percent growth.

Japan’s Nikkei 225 Stock Average rose 0.5 percent and Hong Kong’s Hang Seng Index climbed 0.9 percent. Australia’s S&P/ASX 200 Index advanced 0.7 percent, to the highest level since September 2008. South Korea’s Kospi Index added 0.2 percent and Singapore’s Straits Times Index lost 0.1 percent.

Relative Value

The Nikkei climbed 8.2 percent in 2013 through yesterday, compared with a 6.6 percent gain on the Standard & Poor’s 500 Index. This year’s 3.1 percent advance through yesterday on the MSCI Asia Pacific Index, the benchmark regional equities gauge, left the measure trading at 14.8 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

“The continued high level of optimism is a concern and markets may be vulnerable to bad news, but valuation support suggests any correction should be short and shallow,” Michael Hartnett, New York-based chief global equity strategist at Bank of America Corp., wrote in e-mailed comments.

Of the 308 companies on the MSCI Asia Pacific index that have reported earnings this quarter and for which Bloomberg has estimates, 53 percent exceeded profit expectations. Some 52 percent missed sales projections. That compares with 74 percent of S&P 500 companies that topped profit forecasts during the period, while 34 percent fell short of sales estimates, data compiled by Bloomberg show.

U.S. Futures

Futures on the S&P 500 dropped 0.1 percent. The gauge gained 0.1 percent yesterday to the highest level since October 2007 as investors weighed economic reports and President Barack Obama’s State of the Union address.

Asahi gained 5.8 percent to 2,125 yen. The Japanese brewer of Super Dry increased it full-year net-income forecast 15 percent to 65.5 billion yen ($703 million).

Alumina soared 7.5 percent to A$1.29. The purchase by Citic Resources, a Chinese oil and coal producer, of a A$452 million stake in Alumina makes it the Australian company’s biggest shareholder.

Nippon Prologis REIT Inc., a real estate investment trust set up by the world’s largest owner of industrial buildings, surged 24 percent to 682,000 yen on its Tokyo trading debut amid expectations for growing demand for warehouses.

SingTel slid 2.2 percent to S$3.52 as net income dropped to S$827 million ($669 million) in the three months ended December, missing the S$907 million average of four analyst estimates compiled by Bloomberg.

Alacer Gold Corp. slid 4.2 percent in Sydney to A$3.84 as gold fell 0.2 percent to $1,642.10 per ounce, weakening the company’s earnings outlook.

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