Asian equities climb on Japan, PRC stimulus bets

Bloomberg and staff writer, with CNA

Sun, Dec 30, 2012 - Page 15

Asian shares rose for a sixth week, the longest winning streak since March, as investors bet governments in Japan and China would do more to spur growth.

The MSCI Asia Pacific Index advanced 1.02 percent to 129.61 this week. Japanese shares surged after a report that consumer prices fell fanned speculation the central bank would respond to government calls for more asset purchases.

“Central banks are going to keep interest rates low and provide more stimulus that will keep equity markets propped up as it has done this year,” Kapstream Capital managing director and founder Kumar Palghat said.

Asia’s benchmark equities index rose about 19 percent from this year’s low on June 4, as central banks from the US, Europe, Japan and China took action to spur economic growth. The gauge traded at 14.9 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.7 times for the STOXX Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average advanced 4.6 percent this week, taking its advance for the year to 23 percent, the most since 2005. The gauge has risen 20 percent since Nov. 14, when the former government said it would hold a general election this month and as a more pro-stimulus Liberal Democratic Party, led by Shinzo Abe, took power. Japan’s markets are shut four days next week for the New Year holidays.

Taiwan’s TAIEX closed higher on Friday, the last trading session of the year, as the financial sector, led by heavyweight Fubon Financial Holding Co (富邦金控), attracted rotational buying, dealers said.

The market also got a boost from smartphone vendor HTC Corp (宏達電), which built on Thursday’s rally to breach the NT$300 mark amid optimism over sales of the company’s Butterfly model, they said.

The weighted index closed up 51.9 points, or 0.66 percent, on Friday at 7,699.50, after moving between 7,665.04 and 7,708.31. For the year, the TAIEX gained 627.42 points, or 8.87 percent, and will finish in the middle of the pack among markets in East Asia.

The Shanghai Composite Index, which tracks stocks on the larger Chinese exchanges, added 3.7 percent this week. Hong Kong’s Hang Seng Index increased 0.7 percent, headed for a 23 percent advance this year, the most since 2009.

Australia’s S&P/ASX 200 rose 1 percent. New Zealand’s NZX 50 Index gained 0.7 percent in Wellington. South Korea’s KOSPI added 0.8 percent.

Friday was also the final trading day of the year in South Korea, Indonesia, Thailand, Vietnam and the Philippines. Thailand’s SET Index surged 36 percent this year, the biggest advance by any Asian benchmark gauge after Pakistan’s Karachi 100 Index.

The KOSPI finished the year slightly ahead of the TAIEX, up 9.4 percent as of Friday, while the Hang Seng Index and the Nikkei 225 will finish well ahead, having gained nearly 23 percent as of Friday. The Shanghai index will be the weakest in the region, having risen only 1.5 percent so far this year.