Asian benchmarks start to roll

EXPORT-LED RECOVERY: Major indexes throughout the region rose this week, as Taiwan saw its thirteenth weekly gain in 16 weeks, led by Chunghwa Telecom and TSMC

BLOOMBERG

Sun, Aug 24, 2003 - Page 10

Asian stocks rose for the week, sending benchmarks in South Korea and Hong Kong to 13-month highs.

Exporters such as Samsung Electronics Co and Li & Fung Ltd gained after US reports added to evidence that growth is picking up in the world's largest economy.

"As long as the US economy shows signs of improvement, exporters will keep benefiting," said Hideyuki Itoh, who helps manage the equivalent of US$67 billion at Daiwa Asset Management Co in Tokyo. He declined to say what he's investing in.

South Korea's Kospi index climbed 3.8 percent to 754.72, advancing for the fourth week in five. Hong Kong's Hang Seng Index rallied 3.2 percent to 10,760.73, a 13-month high. Taiwan's TWSE Index reached a 15-month high.

Japan's Nikkei 225 Stock Average and the Topix index also rallied to 13-month highs during the week. Steelmakers such as JFE Holdings Inc advanced on signs they will report higher earnings from improving metal prices and a global economy.

Samsung Electronics, which gets 20 percent of its sales in the US, rose to a record and was the biggest contributor to the Kospi's advance. The stock gained 4.9 percent to 446,000 won this week. Hyundai Motor Co, which gets more than half its sales from exports, rallied 11 percent to 39,000 won. It was the stock's biggest weekly jump since the five days to May 2.

"Economic improvement in the US and exporters, which benefit from it, are key points in the market," said Goo Sung Min, who manages the equivalent of US$254 million in index-tracking funds at Woori Investment Trust Management Co in Seoul.

In Hong Kong, Li & Fung, was the third-biggest weekly gainer on the Hang Seng, surging 13 percent to HK$13.50 this week. The company buys clothing and toys for American Eagle Outfitters Inc, Walt Disney Co and other US retailers.

Taiwan Semiconductor Manu-facturing Co (台積電), which exports about three-quarters of its products to the US, advanced 4.9 percent to NT$64 this week. The stock rose for the sixth week in eight.

The Nikkei advanced 4.2 percent to 10,281.17 and the Topix index climbed 4.1 percent to 1004.20 this week. The Topix rose above 1000 for the first time since July of last year. The Nikkei closed above 10,000 for the first time in a year.

JFE Holdings, Japan's second-largest steelmaker, surged 17 percent to ?2,565. It was its biggest weekly rally since the stock began trading as the holding company of a merger between NKK Corp and Kawasaki Steel Corp in September. Nippon Steel Corp, Japan's largest steelmaker, surged 11 percent to 222 yen, its biggest weekly rally since November 2000.

The subindex that tracks the performance of steelmakers is the best performer in the Topix this year, rallying 76 percent.

"Growing evidence of a recovery in the global economy has prompted investors to seek shares of steel, chemical and machinery makers," said Kikuo Osone, who helps manage the equivalent of US$5.1 billion of assets at Fukoku Capital Management Inc in Tokyo.

Stocks also rose after a government report showed overseas investors are buying more Japanese equities. Investors outside Japan bought ?450 billion (US$3.8 billion) in equities in the week ended Aug. 15, a Ministry of Finance report showed this week.

They bought ?91.1 billion worth of shares in the week earlier.

Strong corporate earnings from companies such as Chunghwa Telecom Co (中華電信) in Taiwan and Cheung Kong (Holdings) Ltd in Hong Kong added to investors' optimism about an economic recovery.

The TWSE jumped 2.9 percent to 5646.62 this week. The index has had only three weekly declines in the last 16 weeks.

Chunghwa Telecom, the nation's dominant phone company, added 0.8 percent to NT$48.10. It posted a 4.8 percent gain in second-quarter profit after use of its mobile-phone and data services increased.

Cheung Kong, Hong Kong's biggest property company by market value, surged 12 percent to HK$58.75, its biggest weekly gain since October. The company reported its first half-year profit increase in three years as income from property climbed.

China Unicom Ltd, the nation's second-largest mobile-phone service provider was the biggest weekly gainer on the Hang Seng, adding 14 percent to HK$6.05. Unicom said this week it added 1.74 million new subscribers in July, the highest since April, as demand rebounded following the end of the SARS outbreak.

In India, the benchmark Sensitive Index climbed above 4000 for first time in two-and-a-half years, gaining 5.2 percent for the week, its 12th weekly advance in 13.

Hindustan Lever Ltd, the nation's largest maker of consumer goods, led the gains on the Sensex, on optimism monsoon rains will help lift farm income, boosting economic growth and corporate profit. Hindustan Lever added 4.9 percent for the week.