Sun, Jun 13, 2004 - Page 10 News List

Asian stocks climb; Fanuc leads

A NEED FOR MACHINERY Strong export figures from around the region, coupled with rosy economic data from the US, helped boost the fortunes of machinery makers

BLOOMBERG

Asian stocks gained for a third week in four, led by Fanuc Ltd and Johnson Electric Holdings Ltd, as economic reports around the region and in the US spurred optimism demand from machinery to motors for toys will rise.

Government reports on the economy and machinery orders pointed to growth in Japan, while better-than-expected Hong Kong retail sales and exports in Taiwan suggested a pick up in spending. Prospects of higher demand from the US, the biggest destination for Asian exports, also lifted stocks.

"Any kind of good news will be welcomed," said Takaaki Haruki, who helps manage the equivalent of US$1.8 billion at HSBC Asset Management (Japan) KK in Tokyo. "Looking at the current environment, there isn't much suggesting that there will be a slowdown" in the US.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, added 2.7 percent in the week just ended. Japan's Nikkei 225 Stock Average climbed 3.6 percent, while the Topix index advanced 3.1 percent. Both Japanese benchmarks had their biggest weekly rise since March.

The Hang Seng China Enterprises Index, which tracks 37 Chinese companies, was the best performer among 60 global benchmarks compiled by Bloomberg data. Shares such as China Telecom Corp led the index 7.2 percent higher, after reports on industrial production and money supply growth eased concerns that interest rates in China will rise anytime soon.

Benchmarks in Hong Kong and Taiwan advanced for a third week in four. Malaysia's Kuala Lumpur Composite Index had its biggest weekly jump in almost four months, lifted partly by a government report that said the country's industrial production in April increased at its fastest pace in three months.

China's stock indexes were worst performers in the week just ended among benchmarks worldwide. South Korea's Kospi Index slumped 3.7 percent and Thailand's SET Index slid 2.1 percent.

Both dropped for a second week.

China Telecom, the nation's largest fixed-line phone company, was the best-performer on the MSCI index. Yanzhou Coal Mining Co, China's only coal producer publicly traded overseas, added to the index's advance after the company won a 75 percent rise in coking coal prices from Japanese steelmakers this year.

Takashimaya Co, Japan's biggest department store operator, and Isetan Co, the fourth largest, rose after the government boosted its estimate for first-quarter economic growth to a 6.1 percent annual pace.

An earlier estimate by the Cabinet Office in Tokyo was for 5.6 percent growth and a median forecast in a Bloomberg survey was for a 5.8 percent gain.

Separately, machinery orders jumped 12 percent in April, the biggest gain in six months, suggesting companies plan to increase spending amid rising global demand for digital electronics goods.

"These are great numbers," said Yasumasa Nishimura, a senior fund manager at Dai-Ichi Kangyo Asset Management Co, who manages the equivalent of US$182 million in Japanese equities.

"Machinery companies are still being conservative in their investment plans and we still get these sort of results."

In Hong Kong, retail sales jumped 23 percent in April from the year before, higher than the median forecast in a Bloomberg News survey. Taiwan's exports climbed 40 percent last month from a year earlier, the Ministry of Finance said, also more than some analysts expected.

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