Asian stocks rise to 4-month high on China property shares4 min read . Updated: 15 May 2014, 01:08 AM IST
Equities in Hong Kong jumped amid speculation China will do more to support the property market
Tokyo: Asian stocks rose, with the regional benchmark index heading for the highest close 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% 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% 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% to 140.46 as of 4:33 pm in Hong Kong, heading for the highest close since 13 Januaary, as all of its 10 industry groups climbed. The measure jumped 1.1% on Tuesday, the biggest gain since 24 March.
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 12c May to improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers, according to a statement posted on its website on Tuesday.
ICBC added 2.1% to HK$4.79. China Construction Bank gained 2% to HK$5.50. China Overseas Land rose 4.1% to HK$19.84.
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 index added 0.4% to close at a five- week high. South Korea’s Kospi index jumped 1.4%, the most since 21 February. Taiwan’s Taiex index rose 0.6%. Singapore’s Straits Times Index increased 1.1% 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%.
Hong Kong’s Hang Seng Index advanced 1%. The Hang Seng China Enterprises Index of mainland companies traded in the city soared 1.4%. As of Tuesday, the so-called H-share index had slumped 13% since 18 November, when it surged the most in two years after the Communist Party outlined economic reforms. The Shanghai Composite Index lost 0.1% on Wednesday.
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% 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% and the Dow Jones Industrial Average rose 0.1% on Tuesday, both extending all-time highs. Futures on the S&P 500 were little changed on Wednesday.
US retail sales increased 0.1% in April following a revised 1.5% jump in March that marked the biggest gain in four years, Commerce Department figures showed on Tuesday 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 from 1 April through yesterday and for which Bloomberg had estimates, 52% beat profit expectations, according to data compiled by Bloomberg.
Nexon soared 12% to ¥921 in Tokyo, the biggest jump since it listed in 2011. It plans to spend as much as ¥10 billion ($98 million) to buy back as many as 12.5 million shares, it said on Tuesday. Net income for the quarter ended March rose 6.6% to ¥16.1 billion.
Dwango, which provides content through mobile phones and operates the Niconico video-delivery website, jumped 9% to ¥2,798. Kadokawa, which publishes books and produces movies, videos and game software, surged 10% to 3,465. The two will merge under a holding company in October, according to a statement to the Tokyo Stock Exchange after the market close on Wednesday. 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% to HK$3.49 in Hong Kong after announcing it will seek ¥100 billion ($16 billion) from selling preferred stock.
Among shares that fell, JGC Corp. plunged 13% to ¥2,910. The operator of industrial plants said it was targeting full-year net income of ¥42 billion for the current fiscal year, compared with the ¥52.6 billion analysts estimated.
The Asia-Pacific gauge traded at 12.7 times estimated earnings as of Tuesday compared with 16.1 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. BLOOMBERG