Asian Stocks Rise to Five-Month High on U.S. Capital Goods; Canon Advances

By Shani Raja and Jonathan Burgos - Bloomberg

Asian stocks gained, driving the MSCI Asia Pacific Index to a five-month high, as a bigger-than- estimated increase in U.S. capital-goods orders bolstered optimism exports to the world’s largest economy will rise.

Komatsu Ltd., the world’s No. 2 maker of construction equipment, jumped 3 percent in Tokyo, while Canon Inc., which gets 28 percent of its sales in the Americas, advanced 2.5 percent. Korea Zinc Co. surged 4.9 percent in Seoul, on higher metal prices. Television Broadcasts Ltd., Hong Kong’s biggest broadcaster, soared 17 percent on speculation billionaire Lee Shau-kee is seeking to buy control of the company.

The MSCI Asia Pacific Index climbed 1.2 percent to 126.91 as of 1:29 p.m. in Tokyo, set to close at the highest level since April 27, as the U.S. report fueled expectations a global economic recovery will strengthen. The gauge has climbed 8.8 percent this month, putting it on course for its biggest monthly advance since May 2009 and the steepest quarterly gain in a year. U.S. stock futures rose today.

“Rising capital investments in the U.S. is a positive sign that shows companies expect demand to increase in the next few months,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Co., which has $123 billion in assets globally. “The stock rally may continue given that valuations are fair, but we have to watch whether the improvements in economic data are sustainable.”

Japan’s Nikkei 225 Stock Average rose 1 percent. The government is considering devising an economic-stimulus package worth as much as 4.6 trillion yen ($54.6 billion), a government official said.

Capital Goods

Hong Kong’s Hang Seng Index, China’s Shanghai Composite Index and Australia’s S&P/ASX 200 Index all rose at least 1 percent today. South Korea’s Kospi index gained 0.5 percent.

Futures on the Standard & Poor’s 500 Index increased 0.3 percent. The index surged 2.1 percent on Sept. 24 to the highest level since May 13 following the capital-goods report and better-than-estimated earnings at Nike Inc.

Orders for U.S. capital equipment rebounded 4.1 percent in August from a 5.3 percent decline in July, figures from the Commerce Department showed on Sept. 24 in Washington. The median forecasts of 11 economists surveyed by Bloomberg was for an increase of 3 percent.

“It’s positive for the whole global economy that demand for capital investment in the private sector is strong,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “Demand should rise further. Capital investment is still at 80 percent of the peak.”

Metals Prices

Komatsu rose 3 percent to 1,932 yen in Tokyo and Canon advanced 2.5 percent to 3,890 yen. Honda Motor Co., which generates about 46 percent of its sales in North America, climbed 2.4 percent to 3,000 yen.

Material producers accounted for 19 percent of the MSCI Asia Pacific Index’s advance. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum climbed 0.7 percent on Sept. 24 to its highest level since April.

Korea Zinc, which also produces precious metals, climbed 4.9 percent to 298,500 won in Seoul, as silver reached a 30-year high and gold traded close to a record.

BHP Billiton Ltd., the world’s largest mining company, rose 1.6 percent to A$39.68 and Equinox Minerals Ltd., which owns Africa’s biggest copper mine, jumped 5.6 percent to A$5.70 in Sydney.

Cnooc Ltd., China’s largest offshore oil producer, advanced 1.4 percent to HK$14.76 as crude-oil futures rose 1.7 percent to $76.49 a barrel in New York on Sept. 24, the biggest increase in two weeks. Mitsubishi Corp., Japan’s largest commodities trader, gained 3.1 percent to 1,975 yen in Tokyo.

Global Growth

The MSCI Asia Pacific Index tumbled as much as 16 percent from this year’s high on April 15 to its 2010 low on May 25 amid concern Europe’s debt crisis and Chinese steps to curb property- price inflation will derail global growth.

The gauge has since climbed 17 percent, including a 12 percent rally since June 30 that has put the index on course for its biggest quarterly advance in a year. Stocks gained as U.S. and Chinese economic reports buoyed confidence in the global economy, while Japanese intervention to weaken the yen boosted the outlook for companies reliant on overseas revenue.

The Asian benchmark increased 4.2 percent in 2010 through last week, compared with gains of 3 percent by the S&P 500 and 4 percent by the Stoxx Europe 600 Index. Stocks in the MSCI Asia pacific Index are valued at 14.2 times estimated earnings on average, compared with 13.8 times for the S&P and 12 times for the Stoxx.

Majority Stake

Television Broadcasts soared 17 percent to HK$46.50 in Hong Kong before trading in its shares was halted. The Apple Daily reported on Sept. 25 that Lee may pay about HK$9 billion ($1.16 billion) for a majority stake in the broadcaster. Lee will acquire the stakes held by TVB Chairman Sir Run Run Shaw and Shaw Brothers (Hong Kong) Ltd., the newspaper said.

Henderson Investment Ltd., of which Lee is chairman, climbed 21 percent to 87 Hong Kong cents. Spokeswoman Bonnie Ngan said the company doesn’t comment on rumors.

In Wellington, Hallenstein Glasson Holdings Ltd. rose 2.9 percent to NZ$4.24 after the New Zealand-based clothing retailer said full-year profit surged 53 percent on improving margins.

Japanese consumer lenders slumped today after the Nikkei newspaper reported that Takefuji Corp., Japan’s third-biggest consumer lender, is preparing to file for bankruptcy protection.

Takefuji shares are suspended until the company makes a statement on the report. Calls to the company’s Tokyo headquarters weren’t answered. The stock was last bid at 121 yen, compared with the close at the end of last week of 171 yen.

Acom Co., which also lends to consumers, plunged 9.7 percent to 1,349 yen and Credit Saison Co. slumped 1.9 percent to 1,194 yen. Promise Co. tumbled 11 percent to 691 yen.

In Sydney, Murchison Metals Ltd. slumped 7.2 percent to A$1.68 after the Australian newspaper reported that Mitsubishi Corp. may pull out of a A$4 billion iron-ore venture.