Strong Finish in Asia; Honda, Esprit Rise

123jump.com Staff
03 Feb, 2010
New York City

Asian markets rebounded at close. Earnings at Honda, Mitsubishi UFJ and Esprit Holdings drove stocks in Tokyo and Hong Kong higher. The Sensex index in India surged as foreign investors pour money in listed companies.

[R]7:00 PM Tokyo – Asian markets rebounded at close. Earnings at Honda, Mitsubishi UFJ and Esprit Holdings drove stocks in Tokyo and Hong Kong higher. The Sensex index in India surged as foreign investors pour money in listed companies.[/R]

Asian markets edged higher after home sales contracts in the U.S. increase.

Investors in Japan focused on earnings from Honda, Toyota, Mitsubishi Motors and Mitsubishi UFJ. Hong Kong stocks gained following an increase in U.S. home sales contracts. Indexes in India surged after foreign investors continue to pour money and stake sale in NTPC drew a strong response in the first day of offering.

Hong Kong stocks increased after Esprit Holdings Ltd said first half sales increased 9.5% and net income fell 5.2% to HK$2.7 billion. Esprit surged 8%.

Cnooc Ltd surged 9.4% to HK$12.32 after it indicated current year energy production increase of 28% to between 275 million barrels and 290 million barrels equivalent of oil.

Tencent Holdings Ltd increased 6% after 21st Century Business Herald in Hong Kong quoted China Mobile Ltd chairman saying that the telecom operator is open to taking a stake in the company.

Honda revised its full year earnings outlook and benefited from the fallout of model recalls and halting of sales in the U.S. and Canada.

For the year Honda estimated earnings of 265 yen or $2.9 billion compared to its earlier forecast of 155 billion yen. Net income in the third quarter ending in December increased to 135 billion yen and average exchange rate to a dollar was 92 yen compared to its estimate of 90 yen.

Honda is struggling with its own recall to fix power switches for model City, Fit and Jazz. In its largest recall the second largest Japanese automaker will replace to switch to prevent short-circuit at 646,000 cars.

Mitsubishi Motors swung to a quarterly profit to 10.7 billion yen from a loss of 17.5 billion yen in the quarter a year ago.

Mitsubishi UFJ Financial Group, the largest Japanese financial services company reported third quarter profit of 76.1 billion yen or $842 million compared to a loss of 134.1 billion yen.

The bank benefited from the recovering securities markets and losses in its equities portfolio declined to 33.4 billion yen from 251 billion yen. However, loan losses for bad loans increased 86% in the quarter from a year ago. Outstanding loans declined to 85.5 trillion yen from 93.3 trillion yen.

Foreign investors in India invested 834.2 billion rupees or $18.5 billion surpassing the previous high of 750 billion rupees in 2007. Markets in India fell sharply in 2008 after foreign investors sold nearly $12 billion of stocks.

International investors have bough equities of more than 3.1 trillion rupees since 1993 or $70 billion at the current exchange rate.

Asia Earnings Review

Honda Motor Co., Ltd, the manufacturer of motorcycles, automobiles and power products reported third quarter sales fell 11.5% to ¥2.24 trillion from ¥2.53 trillion a year ago. Net profit in the quarter rose 566% to ¥134.6 billion or ¥74.19 per diluted share compared to net profit of ¥20.2 billion or ¥11.16 per share a year ago.

Kobe Steel, Ltd, the steel manufacturer reported nine months sales fell 30% to ¥1.21 trillion from ¥1.72 trillion a year ago. Net loss in the nine months was ¥37.9 billion or ¥12.62 per diluted share compared to net profit of ¥42.0 billion or ¥14.00 per share a year ago.

Mitsubishi UFJ Financial Group, Inc, the bank reported nine months net interest income rose 17% to ¥1.65 trillion from ¥1.41 trillion a year ago. Net profit in the nine months was ¥217 billion or ¥17.46 per diluted share compared to net loss of ¥42.0 billion or ¥4.36 per share a year ago.

Esprit Holdings Limited, the fashion retailer reported first-half revenues fell 7% to HK$32.5 billion from HK$34.9 billion a year ago. Net profit in the quarter fell 5.2% to HK$2.71 billion or HK$2.11 per diluted share compared to net profit of HK$2.85 billion or HK$2.23 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 33.24 or 0.32% to 10,404.33, and Hang Seng index in Hong Kong increased 449.90 or 2.22% to 20,722.08, and CSI 300 index in China higher 84.53 or 2.69% to 3,230.72. ASX 200 index in Australia increased 42.60 or 0.93% to 4,647.90. The FTSE Bursa KL Composite index in Malaysia was higher 3.39 or 0.27% to 1,267.15.

The Kospi Index in South Korea increased 19.21 or 1.20% to close at 1,615.02. SET index in Thailand closed higher 13.58 or 1.96% to 707.65. JSE Index in Indonesia increased 24.30 or 0.94% to 2,604.55. The Sensex index in India increased 332.61 or 2.06% to 16,496.05.