Asian stocks rose, giving the MSCI Asia Pacific Index its biggest advance in two weeks, as the Group of 20 nations agreed on steps to shore up the financial system, while merger speculation boosted technology shares.
HSBC Holdings, Europe’s largest lender, gained 1.3 per cent in Hong Kong. Toshiba Corp climbed 3.4 per cent in Tokyo after saying it may contract out some production to cut costs and Chartered Semiconductor Manufacturing received a $1.8 billion takeover offer. China Unicom (Hong Kong) gained 3 per cent in Hong Kong after announcing a $1 billion share swap.
The MSCI Asia Pacific Index rose 1.1 per cent to 114.06 as of 5.35 pm in Tokyo, taking a three-day advance to 1.5 per cent. The gauge, which rose the most since August 24, climbed 62 per cent from a five-year low on March 9 amid speculation stimulus measures around the world will revive the global economy.
“It’s clear there’s an ongoing commitment by the authorities to make sure this recovery works,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $75 billion. “Together with the evidence of a recovery we’re already seeing, it points to a continuing improvement in the economic outlook.”
Japan’s Nikkei 225 Stock Average climbed 1.3 per cent. Canon Inc, which gets 28 per cent of its sales from the US, gained 2.3 per cent after the US government said companies cut fewer jobs than estimated in August. China’s Shanghai Composite Index gained 0.7 per cent after the government raised the amount foreign funds can invest in equities. Hong Kong’s Hang Seng Index advanced 1.5 per cent.
China speculation
Agile Property Holdings climbed 4.6 per cent in Hong Kong on speculation real-estate investment in China will increase. Shin Kong Financial Co, owner of Taiwan’s third- largest life insurance company, gained 6.5 per cent in Taipei on optimism restrictions on the island’s insurers in China will be eased. Suzuki Motor Corp rose 1.9 per cent after the Nikkei newspaper reported the company plans to build an Indian factory.
Futures on the S&P 500 added 0.4 per cent. The stock gauge, which is closed on Monday for a public holiday, climbed 1.3 per cent on September 4 after a Labour Department report showed US companies cut fewer jobs last month than economists had estimated. The jobless rate rose to 9.7 per cent, the highest level in 26 years.
HSBC, which is based in London, gained 1.3 per cent to HK$83.15. Bank of China added 3.8 per cent to HK$4.10. Commonwealth Bank of Australia rose 0.5 per cent to A$45.89.
Finance chiefs from the G-20 nations concluded weekend talks in London with an agreement on a regulatory blueprint aimed at avoiding a repeat of the global financial crisis that has caused at least $1.6 trillion of losses since 2007.
Global governance
The G-20 measures include forcing banks to curb leverage and raise the amount and quality of assets they keep in reserve once growth takes hold.
“The G-20 has shown once again that governments from around the world can come together to agree on the global governance the new global economy needs,” UK Prime Minister Gordon Brown said.
Stocks in the MSCI Asia Pacific Index are priced at an average 1.5 times book value, lower than 2.1 times for the Standard & Poor’s 500 Index in the US and 1.6 times for Europe’s Dow Jones Stoxx 600 Index.
“Investors are focusing on the relative cheapness of equities,” said Hiroichi Nishi, an equities manager at Tokyo- based Nikko Cordial Securities Inc.
Toshiba, Unicom
Toshiba, Japan’s largest chipmaker, climbed 3.4 per cent to ¥482. The company said it may contract out production of large-scale integrated circuits to cut manufacturing costs.
Technology companies accounted for 16 per cent of the MSCI Asia Pacific Index’s gain on Monday as Advanced Technology Investment Co, owned by the government of Abu Dhabi, said it plans to acquire Chartered Semiconductor for S$2.5 billion ($1.8 billion) in cash.
“Companies are starting to realise there are attractive valuations out there, and taking advantage of it,” AMP’s Naeimi said.
Chartered sank 1.9 per cent to S$2.61 in Singapore following a 5.1 per cent advance on September 4. The stock was halted from trading in the morning.
Unicom, China’s second-biggest wireless carrier, gained 3 per cent to HK$11.06. Telefonica SA, Europe’s second-biggest phone company, will pay $1 billion to boost its stake in Unicom to 8.1 per cent from 5.4 per cent, the two companies said in a joint statement on Sunday.
Telefonica also agreed to sell an equal value of shares to Unicom, which may gain a stake of as much as 0.89 per cent in the Spanish company, according to the statement.
BHP Billiton and Rio Tinto Group, the world’s biggest and third-biggest mining companies, are considering a A$1 billion ($853 million) merger of their Canadian diamond operations, the Australian reported, without saying where it got the information.
Rio Tinto gained 2.3 per cent to A$56.54 in Sydney, while BHP added 0.4 per cent to A$36.78.
