Asian stocks advance on merger speculation, commodity prices
Tuesday, 30 December 2008
TOKYO, Dec 29 (Bloomberg): Asian stocks climbed as merger talks boosted insurers and commodity producers advanced amid rising raw materials prices, paring the worst annual losses on record for the region's benchmark index.
Mitsui Sumitomo Insurance Group Holdings Inc. jumped 8.30 per cent in Tokyo on speculation it will combine with two rivals. Elpida Memory Inc., Japan's No. 1 computer-memory chipmaker, climbed 13 per cent on merger discussions with Taiwanese competitors. Woodside Petroleum Ltd. rose 5.70 per cent in Sydney as oil rose for a second day. Tokyo Electric Power Corporation led utilities higher after figures showed their fuel costs fell.
"People are starting to look through the slowdown," said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion. "If you see mergers, it's a good sign. It shows that companies are starting to understand that there's value out there."
The MSCI Asia Pacific Index added 1.50 per cent to 88.71 as of 7:23pm in Tokyo. Five stocks rose for every three that fell. The global financial crisis has dragged the measure down by 44 per cent this year, putting it on course for the worst annual performance in its two-decade history.
Japan's Nikkei 225 Stock Average added 0.10 per cent, while India's Sensitive Index gained 2.20 per cent. Other markets advanced except China, Taiwan, South Korea, Thailand, Sri Lanka and Pakistan. Indonesia, Malaysia, and the Philippines were closed for holidays.
Hynix Semiconductor Inc. dropped 4.20 per cent after Standard & Poor's cut its credit rating and as an index of South Korean consumer confidence slumped. Macquarie Office Trust plunged 12 per cent in Sydney as it negotiated loan refinancing.
The MSCI Asia Pacific Index's slump in 2008 reduced the average value of companies on the gauge to 13 times estimated profit, more than a fifth below the level at the start of this year. Global equities have lost $30 trillion in value this year as the collapse of the American housing market pulled the US, Europe and Japan into their first simultaneous recessions since World War II.
A Bank of Korea index of consumer confidence released today showed that sentiment sank this month to the lowest level since the fourth quarter of 1998. Hong Kong's exports fell 5.30 per cent in November, the first drop in five months, a government report after markets closed showed.
"The concern now is how much things will slow, and for how long," said AMP's Naeimi. "You're seeing a synchronised global slowdown, and that means earnings are still at risk."
Mitsui Sumitomo Insurance surged 8.30 per cent to 2,885 yen. The company, Aioi Insurance Company and Nissay Dowa General Insurance Company are in talks to create Japan's largest non-life insurer, two people familiar with the negotiations said. Spokesmen from the three companies said they didn't have any announcement to make.
Aioi Insurance jumped 19 per cent to 484 yen, the biggest advance on the MSCI Asia Pacific Index today. Nissay Dowa rose 15 per cent to 578 yen.
Elpida soared 13 per cent to 585 yen. The company has begun merger talks with Taiwanese chipmakers including Powerchip Semiconductor Corporation, Yukio Sakamoto, chief executive officer of Tokyo-based Elpida, said in an interview on December 26, without elaborating.
Mitsui Sumitomo Insurance Group Holdings Inc. jumped 8.30 per cent in Tokyo on speculation it will combine with two rivals. Elpida Memory Inc., Japan's No. 1 computer-memory chipmaker, climbed 13 per cent on merger discussions with Taiwanese competitors. Woodside Petroleum Ltd. rose 5.70 per cent in Sydney as oil rose for a second day. Tokyo Electric Power Corporation led utilities higher after figures showed their fuel costs fell.
"People are starting to look through the slowdown," said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion. "If you see mergers, it's a good sign. It shows that companies are starting to understand that there's value out there."
The MSCI Asia Pacific Index added 1.50 per cent to 88.71 as of 7:23pm in Tokyo. Five stocks rose for every three that fell. The global financial crisis has dragged the measure down by 44 per cent this year, putting it on course for the worst annual performance in its two-decade history.
Japan's Nikkei 225 Stock Average added 0.10 per cent, while India's Sensitive Index gained 2.20 per cent. Other markets advanced except China, Taiwan, South Korea, Thailand, Sri Lanka and Pakistan. Indonesia, Malaysia, and the Philippines were closed for holidays.
Hynix Semiconductor Inc. dropped 4.20 per cent after Standard & Poor's cut its credit rating and as an index of South Korean consumer confidence slumped. Macquarie Office Trust plunged 12 per cent in Sydney as it negotiated loan refinancing.
The MSCI Asia Pacific Index's slump in 2008 reduced the average value of companies on the gauge to 13 times estimated profit, more than a fifth below the level at the start of this year. Global equities have lost $30 trillion in value this year as the collapse of the American housing market pulled the US, Europe and Japan into their first simultaneous recessions since World War II.
A Bank of Korea index of consumer confidence released today showed that sentiment sank this month to the lowest level since the fourth quarter of 1998. Hong Kong's exports fell 5.30 per cent in November, the first drop in five months, a government report after markets closed showed.
"The concern now is how much things will slow, and for how long," said AMP's Naeimi. "You're seeing a synchronised global slowdown, and that means earnings are still at risk."
Mitsui Sumitomo Insurance surged 8.30 per cent to 2,885 yen. The company, Aioi Insurance Company and Nissay Dowa General Insurance Company are in talks to create Japan's largest non-life insurer, two people familiar with the negotiations said. Spokesmen from the three companies said they didn't have any announcement to make.
Aioi Insurance jumped 19 per cent to 484 yen, the biggest advance on the MSCI Asia Pacific Index today. Nissay Dowa rose 15 per cent to 578 yen.
Elpida soared 13 per cent to 585 yen. The company has begun merger talks with Taiwanese chipmakers including Powerchip Semiconductor Corporation, Yukio Sakamoto, chief executive officer of Tokyo-based Elpida, said in an interview on December 26, without elaborating.