FXI: Asian Stocks Rise on China Policy Speculation; ICBC, BHP Climb
By Masaki Kondo
May 24 (Bloomberg) -- Asian stocks rose, led by the biggest gain in Chinese equities since October, on speculation China’s government will delay further measures to cool the country’s property market because of the European debt crisis.
Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, rose 1.7 percent in Hong Kong. Beiqi Foton Motor Co. jumped 8.6 percent after the Shanghai Securities News reported the government will extend subsidies for trade-in vehicles to the end of this year. BHP Billiton Ltd., which got 20 percent of its fiscal 2009 revenue from China, climbed 2 percent in Sydney.
“The market is expecting a softening in the government’s stance on tightening given the uncertain outlook on global growth,” said Larry Wan, Shanghai-based deputy chief investment officer at KBC-Goldstate Fund Management Co., which holds about $583 million.
The MSCI Asia Pacific Index increased 0.2 percent to 112.21 as of 12:23 p.m. Tokyo time, with 10 stocks rising for every seven that dropped. The gauge had fallen 7.5 percent in the past six days on concern Europe will fail to stop its debt crisis from spreading. German lawmakers approved their country’s share of a $1 trillion euro-region bailout in a May 21 vote.
China’s Shanghai Composite Index climbed 3.2 percent, the biggest gain since Oct. 9. Hong Kong’s Hang Seng Index rose 0.5 percent. Australia’s S&P/ASX 200 Index gained 1.2 percent.
Japan, South Korea
The Nikkei 225 Stock Average dropped 0.3 percent in Tokyo, led by insurers on concern recent declines in share prices will devalued their assets. South Korea’s Kospi was little changed, having earlier dropped 0.9 percent after President Lee Myung Bak said he will take North Korea to the United Nations Security Council over the torpedoing of one of the South’s warships.
Futures on the Standard & Poor’s 500 Index lost 0.3 percent. The gauge rose 1.5 percent in New York on May 21, rebounding from the biggest drop this a year, as investors speculated equities may have fallen too much.
Industrial & Commercial Bank gained 1.7 percent to HK$5.56 in Hong Kong. China Vanke Co., the nation’s largest developer by market value, climbed 4.6 percent to 7.73 yuan. Smaller rival Poly Real Estate Group Co. soared 7.5 percent to 12 yuan.
China should be cautious in introducing new tightening measures as the global economic environment is complex, Xu Lianzhong, an official with the National Development and Reform Commission’s price monitoring center, wrote in a commentary published today in the China Securities Journal. The European debt problem is one of many global economic uncertainties that China faces, Xu wrote.
Subsidy Extension?
Chinese automakers rose after the Shanghai Securities News reported the government will extend subsidies for trade-in vehicles to the end of this year. The subsidies were was due to expire on May 31 after its introduction on June 1, 2009. Beiqi Foton advanced 8.6 percent to 19.12 yuan. FAW Car Co. gained 4.3 percent to 17.91 yuan.
BHP, the world’s biggest mining company, rose 2 percent to A$37.50 in Sydney amid speculation demand for metals in China can be sustained. Smaller competitor Rio Tinto Group climbed 2.6 percent to A$63.40.
Mining and finance companies contributed the most to the MSCI Asia Pacific Index’s advance today. Companies in the gauge are priced at an average 14.2 times estimated profit, near the lowest level since January 2009.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
Last Updated: May 23, 2010 23:25 EDT
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