Asian Markets Climb Higher

123jump.com Staff
20 Aug, 2007
New York City

Asian markets rebounded sharply on the rate cut in the U.S. and strength in the European markets. Indonesia and Hong Kong led the regional indexes with a gain of more than 6%. Shanghai jumped 5% and India added 2%. Banks, metals and mining stocks, and shipping lines led the rally in the region. HSBC is in a deal to buy controlling stake in Korea Exchange Bank. Yanzhou and China Ship reported higher than expected earnings. The Reserve Bank of Australia adds liquidity in the market again.

[R]9:00AM New York, 10:00PM Tokyo - Asian stocks rallied on the rate cut in the U.S. Australia hits 10-year high. Shanghai and Hong Kong surge. HSBC eyes 51% stake in Korea Exchange Bank. QBE Insurance Group Ltd reported profit increase of 56%.[/R]

Asian stocks hit new 3-year highs tracking gains in US and Europe after Federal Reserve lowered rates. Indonesia led the region rising 6.6% followed by Singapore up 6.12%. Hong Kong surged 5.93%, South Korea up 5.7% while China added over 5%. Australia rose 4.6%. Australian shares lagged some of the other big moves in the region. Of the 201 stocks in the ASX 200 index, 189 rose and 9 fell. Of the index stocks 14 shares rose more than 10% while 149 stocks gained by between 1% and 9.9%.

In Sydney trading ASX 200 Index rose 4.6% to new decade highs at 5,932.60 helped by steep increases in metal and financial stocks. The Reserve Bank of Australia injected a further A$2.8 billion into the banking system to hold back rates growth. The Aussie dollar continued to firm against major currencies, closing at 80.01 cents against the dollar and 59 cents per euro. The Aussie had fallen as low as 76.7 cents in Friday trading.

Of the stocks in the ASX 200 index, metal and financial stocks soared and led the rally. Allco Finance GR led jumping a massive 23.72% followed by Murchsion Metals up 17.3% while Monadelphous Group gained 14.57%. Compass resource added 13.6% and Mount Gibson up 13.33%. Banks recovered sharply from last week’s losses. National Australia Bank Ltd closed up 4.8% and Australia and New Zealand Banking Group Ltd added 3.8%. Gud Holdings Ltd led down 4.40% followed by Crane Group Ltd that lost 1.55%. Telstra Corp fell 1.5% and Telecom New Zealand eased 0.88%. The other four declines lost less than 1%.

Macquarie Bank Ltd rose 9.3%, after the group announced plans to restructure. The bank's shareholders will meet in October to vote on plans by the bank to create a non-operating holding company structure. Shareholders will exchange their shares in Macquarie Bank for shares in Macquarie Group, which will listed on Sydney Exchange.

QBE Insurance Group first half net earnings jumped 56% to A$921 million. Net earned premium rose 19% to A$4.75 billion with an interim dividend of 57 cents declared, up from 40 cents last year. The company, aiming further acquisitions, said also it had enough funds to cover any insurance claims arising from damage caused by Hurricane Dean in North America. The stock closed up 11%.

BlueScope Steel gained 5.08% after full year to June 30 net profit doubled 102% to A$686 million. Earnings per share increased to 94.6 cents from 47.4 cents per share in 2006. A final dividend of 26 cents a share, up 2 cents from will be paid.

Industrial firm Brambles was up 28 cents at A$13.18 after informing the market that Asciano Group's stake in the company had increased to 2.84%.

Trading in Hong Kong and South Korea was dominated by news that HSBC was talking to U.S. private equity firm Lone Star about buying its controlling stake in Korea Stock Exchange.

Hang Seng index rose 6% to close at 21,602.34 while Kospi increased 5.7% to 1731.27. HSCB is negotiations with Lone Star Funds to acquire 51% of Korea Exchange Bank. Already, the banking group generates at least 47% of its profit in the region. Korea Exchange Bank closed higher 7.3%.


[R]7:00AM New York, 8:00PM Tokyo - Japanese stocks rebound, join world rally spurred by the rate cut in Washington. Yen retreats after record gains last week. Japan and Indonesia sign trade pact.[/R]

Japanese shares rebounded ending a week of losses from global markets volatility. Several Asian shares followed suit, buoyed by the Federal Reserve Bank rate cut by half a point to 5.75% in Washington. Tokyo jumped 3% after falling 5.4% on Friday. Of the stocks in the Nikkei 225 index, 199 stocks were up, 25 fell and 1 remained unchanged. In addition, 50 stocks gained by more than 5%.

In Tokyo trading Nikkei 225 surged 3% to 15,732.48, touching fresh 12-month highs. Exporters led the rebound on falling yen. The yen dropped to 115.3 against the dollar, from a high of 112 on Friday. The Bank of Japan intervened in the financial system again, pumping an additional 1 trillion yen to calm rates and keep the key bank rate at 0.5% amid rising cash demand.

Japan and Indonesia singed energy and trade pact meant to eliminate tariffs by over 90%. The multi-billion dollar deal allows Japan access to Indonesia’s energy in exchange for development aid. Japanese and Indonesia companies are expected to conclude deals worth $4.3 billion under the economic agreement. Prime Minister Shinzo Abe is leading a business delegation of over 200 business people visiting several Asian states including, India and Malaysia to strengthen economic ties and build new investments. Japan industrial production index for July will be released on August 31. The market expects the index to fall below the 1.3% growth in June.

Exporters rose steeply aided by a weakening yen. Of the index stocks in Nikkei 225, Sojitz Corp led up 10.3% followed by Meidensha Corp rising 10.03%. Mistumi Electric Co added 9.24%, Mitsui Engineering and Shipbuilding higher 9.11% while Daikin INDS lifted 8.90%. Financial stocks recovered from severe losses last week. At least 8 shares gained for every 1 on the decline. Bottom 13 shares fell by more than 1%. Tokyo losses were restricted to below margins of 4%. Mitsubishi Logistics led down 3.28%, Toppam Printing fell 2.6% while Meiji Dairies Co dropped 2.62%. KDDI Group lost 2.53% with EISAI Corp down 2.42% anchoring the top five losses.

Kubota Corp reported it will invest 5.9 billion yen in tractor manufacturing joint venture with Thailand firm, Siam Cement Public Co Group, the group announced Monday. Operations will begin in March 2009. The partnership will be capitalized to the tune of 3.7 billion yen. The stock closed up 2.30%.