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The MSCI Asia Pacific Index added 0.1% to 138.22. The measure rose less than 0.1% this week. Photo: AFP
The MSCI Asia Pacific Index added 0.1% to 138.22. The measure rose less than 0.1% this week. Photo: AFP

Asian stocks rise before US payrolls data; casino shares rally

The regional benchmark index ends at a one-week high, as investors weigh corporate earnings before payroll data

Singapore: Asian stocks rose, with the regional benchmark index ending at a one-week high, as investors weighed corporate earnings before the release of US non-farm payrolls.

Wynn Macau Ltd jumped 4.1% in Hong Kong after the gaming company beat analyst profit estimates and a report showed casino revenue from Macau exceeded expectations. China Railway Group Ltd jumped 9.3% after HSBC Holdings Plc said in a report the Chinese government will raise investment in rail infrastructure. Hyundai Department Store Co. fell 2.3% in Seoul after posting earnings that fell short of analyst forecasts.

The MSCI Asia Pacific Index added 0.1% to 138.22 as of 6.17pm in Hong Kong. The measure rose less than 0.1% this week. While a report on Thursday showed jobless claims in the US jumped to a nine-week high, employment data due Friday is expected to show an improving labour market.

“The US economy is somewhere in between good and bad but probably more on the good side," Mark Matthews, head of Asia research for Julius Baer, which oversees about $377 billion, said on Bloomberg TV from Hong Kong. “The data won’t be as robust as people think. Generally, the world economy looks fine."

Hong Kong’s Hang Seng Index gained 0.6%, while the Hang Seng China Enterprises Index of mainland shares traded in the city climbed 0.2% as trading resumed following the May Day holiday. Markets in mainland China are closed again Friday for a holiday.

China concern

Taiwan’s Taiex index advanced 0.9%. New Zealand’s NZX 50 Index added 0.5%, while Australia’s S&P/ASX 200 Index gained 0.2. Japan’s Topix index closed little changed, reversing earlier losses of as much as 0.4%. South Korea’s Kospi index slid 0.1%. Singapore’s Straits Times Index dropped 0.4%.

Companies from Mitsubishi Corp. to Westpac Banking Corp. will release results next week. Of the 275 firms on the MSCI Asia Pacific Index that posted results since the beginning of April and for which estimates were available, 53% beat estimates for profit, according to data compiled by Bloomberg.

“While earnings have been relatively good, concerns remain over slowing economic growth in China," Tim Radford, a strategist at Rivkin Securities in Sydney, said by phone.

China’s official manufacturing Purchasing Managers’ Index (PMI) rose to 50.4 in April, data showed Thursday, missing the 50.5 median estimate of economists polled by Bloomberg.

Relative value

The MSCI Asia Pacific Index traded at 12.6 times estimated earnings Thursday, compared with 16 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 added 0.1% Friday. The gauge closed little changed yesterday, while the Dow Jones Industrial Average retreated from a record, ahead of today’s payrolls report.

US employers probably added 218,000 workers in April, up from an increase of 192,000 in March, according to the median estimate in a Bloomberg survey of 94 economists. The Fed, which announced its fourth straight $10 billion cut to stimulatory bond buying 30 April, says the job market in the world’s largest economy is improving.

Data Thursday showed claims for US unemployment benefits rose to 344,000, the most since 22 February, beating economists’ estimates for a tally of 320,000. Separate reports showed the Institute for Supply Management’s gauge of US manufacturing increased in April, while household purchases, which account for about 70% of the world’s largest economy, jumped by the most since August 2009.

Casinos rally

Wynn Macau climbed 4.1% to HK$31.80 in Hong Kong. Adjusted property earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 16% from a year earlier to $384.3 million, according to a statement by parent company Wynn Resorts Ltd. That surpassed the $367 million median estimate of five analysts surveyed by Bloomberg.

Gaming companies also rallied after government data showed Macau casino revenue increased 10.6% from a year earlier to 31.3 billion patacas ($3.9 billion) in April. That exceeded the 7% median growth forecast by five analysts in a Bloomberg survey. Galaxy Entertainment Group Ltd, controlled by billionaire Lui Che-woo, rose 3% to HK$62.70. Sands China Ltd added 2.1% to HK$57.80.

MediaTek Inc. jumped 7% to NT$505 in Taipei after the maker of chips used in wireless devices posted operating profit that beat analyst estimates.

Treasury wine

China’s two biggest railway builders rallied in Hong Kong after HSBC reported that the Chinese government will increase railway investment by at least 23% to support economic growth. China Railway Group gained 9.3% to HK$3.77. China Railway Construction Corp. advanced 7.3% to HK$6.88.

Treasury Wine Estates Ltd increased 6.5% to A$4.09 in Sydney after the Australian newspaper said Pernod Ricard SA is interested in buying its US assets. Treasury has not been approached by, and is not in discussions with, Pernod Ricard, the Melbourne-based company said in a statement.

Among shares that fell, Hyundai Department Store slipped 2.3% to 130,000 won in Seoul, the lowest close since October 2012. The company reported first-quarter profit dropped 14% to of 77.5 billion won ($75.2 million) from a year earlier. That compares with the average estimate of 87.3 billion won by 12 analysts tracked by Bloomberg. Bloomberg

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