BackAsian stocks at a six-week high as Japan climbs on yen
MSCI Asia Pacific Index rises 0.9% to 138.89, with almost three shares rising for each that fell
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Sydney/Singapore: Asian stocks advanced, with the regional benchmark gauge ending at a six-week high, as telecommunications companies led gains. Japanese shares rose after the yen weakened and an advisory committee said the world’s largest pension fund doesn’t need a domestic-bond focus.
SoftBank Corp. jumped 4.8% in Tokyo as the mobile carrier contributed the most to the regional benchmark’s advance. Myer Holdings Ltd, Australia’s largest department-store operator, added 1.5% in Sydney after the nation’s retail sales in January climbed the most in a year. Tencent Holdings Ltd, the world’s best-performing major technology stock in the past five years, increased 2% in Hong Kong to a record close.
The MSCI Asia Pacific Index rose 0.9% to 138.89 as of 8.28pm in Hong Kong, with almost three shares rising for each that fell. Japan’s 128.6 trillion yen ($1.26 trillion) Government Pension Investment Fund should seek yearly returns of 1.7% plus the rate of pay increases for workers, according to a draft report from the committee tasked with helping the health ministry decide on economic assumptions for investment targets.
“I think pension funds are moving in the right direction because they have been too risk averse," said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($107 billion) in assets. “It’s not a bad thing they are going to take risk, but we need to be ready for higher volatility in assets."
Yen weakens
Japan’s Topix index rose 1.3% as the yen slid a third day. SoftBank added 4.9% to 7,959 yen. Hong Kong’s Hang Seng Index added 0.5%, with Tencent climbing 2% to HK$635. South Korea’s Kospi Index gained 0.2%, and New Zealand’s NZX 50 Index advanced 0.8%, extending a record high.
Australia’s S&P/ASX 200 Index closed little changed, near a five-and-a-half-year high. The gauge pared losses of as much as 0.4% after retail sales in January rose three times faster than economist estimates and the trade surplus widened to the most in two-and-a-half years. Myer advanced 1.5% to A$2.66.
The Shanghai Composite Index added 0.3%, halting a two-day drop. Finance minister Lou Jiwei said economic growth below the government’s target is acceptable, with employment, not the exact level of expansion, being key.
Premier Li Keqiang on Wednesday kept the annual growth target unchanged at 7.5% for 2014, stoking speculation the government will allow the country’s $21 trillion debt mountain to swell. Investors are watching the National People’s Congress for clues to the next steps to fix local-government finances, rein in shadow banking and open state businesses to private investment.
Credit risks
The growing risk of default by Shanghai Chaori Solar Energy Science and Technology Co. may become China’s Bear Stearns moment, prompting investors to reassess credit risks as they did after the US securities firm was rescued in 2008, according to Bank of America Corp. The maker of solar cells said 4 March it may not be able to make an 89.8 million yuan ($14.7 million) interest payment in full by Friday’s deadline.
“There’s no need to panic about a default, which is normal volatility in the bond market," the China Securities Journal reported, citing Li Daokui, a former adviser to the People’s Bank of China. “Local government debt defaults are more of a concern because there would be a larger-scale impact," Li said, according to the newspaper.
The MSCI Asia Pacific Index climbed 6.7% from this year’s low on 4 February. The gauge traded at 13.1 times the estimated earnings of its constituent companies, compared with 15.9 for the Standard and Poor’s 500 Index and 14.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Ukraine crisis
European Union leaders will consider repercussions for Russia at an emergency meeting today on the Ukraine crisis, after Russia’s foreign minister fended off a U.S. effort to ease tensions in the Crimean peninsula. Western nations are threatening Russia with sanctions over its military intervention in Crimea while pursuing diplomacy in an effort to defuse the situation.
Futures on the S&P 500 gained 0.2% after the US equities benchmark fell less than one point to 1,873.81 in New York.
Among other stocks that moved on Thursday, Kumiai Chemical Industry Co. surged 8.4% to 594 yen after reporting that first-quarter net income doubled.
Renewable energy
China’s renewable energy producers advanced after Premier Li said the government will encourage the use of alternative energy sources to combat pollution. Xinjiang Goldwind Science and Technology Co., the nation’s largest maker of wind turbines, jumped 7.2% to HK$9.74. China High Speed Transmission Equipment Group Co. surged 10% to HK$6.50 even after saying it expects full-year profit to slide.
Standard Chartered Plc, a UK-based lender that relies on Asia for most of its revenue, slid 1.3% to HK$162.30 after posting its first annual profit decline in a more than a decade.
Prada SpA declined 1.8% to HK$56.05. Shares of the fashion house fell after Finance Minister Lou said China will impose higher taxes on luxury goods. Bloomberg
Yoshiaki Nohara in Tokyo contributed to this story.
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