Asian stocks rose, led by financial companies and automakers, after G20 finance ministers vowed to combat the global recession and OPEC refrained from cutting output quotas to bolster economic growth.
Mitsubishi UFJ Financial Group Ltd, Japan’s biggest publicly traded bank, rose 6 percent as corporate bond risk fell following a pledge by G20 officials for coordinated action to clean up banks’ toxic assets. Mazda Motor Corp, Japan’s No. 4 carmaker, jumped 9.8 percent on optimism that production will rebound.
“People in the market have calmed down and started noticing authorities worldwide are doing what they can to revive the global economy and restore the financial system,” said Kiyoshi Ishigane, a strategist at Tokyo-based Mitsubishi UFJ Asset Management Co, which oversees about US$61 billion.
The MSCI Asia Pacific Index rose 1.4 percent to 75.77 as of 1:47pm in Tokyo, with about three stocks gaining for each one that declined. Japan’s Nikkei 225 Stock Average climbed 2 percent to 7,722.41, while Hong Kong’s Hang Seng Index gained 1 percent.
Markets in Asia rose except in South Korea, China, Singapore, Indonesia, Malaysia, Thailand and the Philippines.
Foxconn International Holdings Ltd (富士康), the world’s biggest contract maker of mobile phones, gained 7.7 percent in Hong Kong following a brokerage upgrade.
Futures on the Standard & Poor’s 500 Index fell 0.9 percent. The benchmark gauge rose 0.8 percent on Friday, capping an 11 percent rally for the week, as takeover speculation lifted health care companies.
The MSCI Asia Pacific Index rose 3.9 percent last week, its best performance this year. The gauge is down 16 percent this year, extending last year’s record 43 percent drop as the global recession decimated profits at companies from Mazda to Canon Inc, the world’s top maker of digital cameras.
Estimated earnings for companies included in the benchmark are down 66 percent from a year ago, data compiled by Bloomberg show. Companies on the index trade at an average of 1.1 times book value, near its October record low of 1 times book.
The Bank of Japan is considering buying subordinated debt from banks to shore up capital, the Nikkei Shimbun reported.
The cost of protecting investors in Asian bonds from default fell after the G20’s weekend pledges. The Markit iTraxx Japan index of credit-default swaps dropped 5 basis points, Barclays Capital prices showed. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan also lost 5 basis points, ICAP Plc said.
Mazda, partly owned by Ford Motor Co, climbed 9.1 percent to ¥156 (US$1.59). The company will resume full production at two domestic plans in July, the Nikkei Shimbun said on Saturday.
Foxconn gained 7.7 percent to HK$2.66 (US$0.34) in Hong Kong after Macquarie Group raised its rating for the stock to “outperform” from “neutral” because it expects the company to return to profit this year.
HSBC, which is raising US$17.7 billion from a rights offering, rose 1.2 percent to HK$38.70 in Hong Kong.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts