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Asian stocks rise on U.S. inflation, earnings

Asian stocks rise on U.S. inflation, earnings
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First Published: Mon, May 14 2007. 08 40 AM IST
Updated: Mon, May 14 2007. 08 40 AM IST
Singapore: Asian stocks rose for the first time in three days after a report showed easing U.S. inflation and on speculation companies will continue to increase dividends as profit grows.
Toyota Motor Corp. climbed by the most in two months, leading gains among exporters. Sumitomo Mitsui Financial Group Inc., Japan’s No. 3 lender by assets, gained to a four-week high after the Nikkei newspaper said the company may raise its dividend. Singapore Airlines Ltd jumped to the highest in seven years after saying it planned to cancel some shares.
“Inflation is pretty much contained and we’re not looking for an excessive gain in prices,” said Leslie Phang, who manages about $1 billion (Rs4,072 crore) at Commonwealth Private Bank in Singapore. “There’s an almost insatiable demand for growth and investors have been shifting towards those stocks.’’
The Morgan Stanley Capital International Asia-Pacific Index, which advanced to a record on 9 May, added 0.9% to 149.75 at 10:52 am in Tokyo, ending a two-day, 1.1% slide. Benchmarks gained in all markets open for trading, with Japan’s Nikkei 225 Stock Average surging 1.1% to 17,740.77.
BHP Billiton Ltd led Australia’s S&P/ASX 200 Index to a record after prices of metals including copper and zinc climbed. South Korea’s Kospi index climbed to its fourth consecutive high, after Woori Investment & Securities Co. raised its recommendation on shares of Kookmin Bank.
U.S. stocks rose on 11 May, enabling the Dow Jones Industrial Average and Standard & Poor’s 500 Index to climb the most this month.
Producer Prices
Toyota, the world’s largest automaker by market value, added 2.2% to 7,310 yen. Hon Hai Precision Industry Co., the world’s largest contract-electronics manufacturer, gained 1.5% to NT$242.
U.S. producer prices excluding food and fuel costs were unchanged for a second month in April, government reports showed on 11 May. Federal Reserve policy makers on 9 May left their benchmark lending rate at 5.25% and said rising prices remain the main risk.
Nissan Motor Corp., Japan’s third-largest automaker by sales, surged 4.1% to 1,276 yen. Nissan also advanced after Nomura Securities Co. raised its rating to “buy’’ from “neutral.’’
Sumitomo Mitsui, Japan’s third-largest bank by assets, added 0.9% to 1.11 million yen. Mitsubishi UFJ Financial Group Inc., the nation’s biggest, advanced 1.5% to 1.36 million yen. Mizuho Financial Group Inc., the No. 2, rose 1.6% to 783,000 yen.
Sumitomo Mitsui may raise its annual dividend by 3,000 yen a share to 10,000 yen, the Nikkei reported. The newspaper said other banks including Mitsubishi UFJ and Mizuho may also increase their payouts. All three are scheduled to report earnings next week.
Singapore Airlines Ltd, the world’s largest carrier by market-value, jumped 4.3% to S$19.30. Fourth-quarter profit more than doubled from a year earlier to S$671.3 million ($443 million) as fleet expansion and Asia’s economic growth boosted passenger numbers. Earnings topped the S$549 million median estimate in a Bloomberg News survey of six analysts.
The airline said it plans to pay a dividend of 85 cents a share and cancel one stock for every 15 held.
BHP, the world’s largest mining company, climbed 1.4% to A$31.44. Rio Tinto Group, the third biggest, rose 1.6% to A$93.51. Sumitomo Metal Mining Co., Japan’s biggest nickel producer, jumped 3.9% to 3,050 yen.
A measure of six metals traded on the London Metal Exchange, including copper and zinc, rose 0.7% on 11 May.
“The resources shares are always among the favorites, and those companies that can justify their share prices because of earnings,’’ said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd in Sydney.
Kookmin, South Korea’s biggest bank, gained 1% to 83,000 won. Woori Investment lifted its recommendation on Kookmin to “buy’’ from “hold,’’ in a report today, citing cheap valuations.
Woori’s 12-month share-price estimate was raised by 7.8% to 95,500 won. The price is low enough for investors to try a “buy and hold’’ approach, wrote Daniel Baek, an analyst.
Shinhan Financial Group Ltd, South Korea’s second-largest lender, advanced 1.5% to 54,200 won.
Eisai Co., Japan’s fourth-largest drugmaker, jumped 10% to 6,100 yen, set for its biggest gain in six years. A U.S. court said 11 May after markets closed in Japan that the patent on stomach ulcer drug Aciphex, Eisai’s second-best selling product, was enforceable and infringed by Dr. Reddy’s Laboratories Ltd and Teva Pharmaceutical Industries Ltd.
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First Published: Mon, May 14 2007. 08 40 AM IST
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