Japanese stocks rose, led by lenders, after UFJ Holdings Inc said it may accelerate the sale of its trust bank to Sumitomo Trust & Banking Co, which would raise at least US$2.8 billion.
The Topix index climbed 1.1 percent to 1146.92 at the 3pm close in Tokyo on Friday, with a measure tracking the performance of lenders rising for the first day in seven. The Topix ended a six-day decline, its longest losing streak in 16 months. The Nikkei 225 Stock Average added 0.9 percent to 11,423.53 on Friday.
"The merger is good for UFJ Holdings in that it will profit from the sale of its unit," said Hideaki Kurimoto, who helps manage US$2.8 billion, including shares of Sumitomo Trust, at Meiji Dresdner Asset Management Co in Tokyo. That "prompted some short-term investors to scoop up recently battered bank stocks." The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, added 0.9 percent to 90.26.
The index posted its second weekly decline. South Korea's Kospi index also dropped for a second week.
South Korea's LG Electronics Inc gained after its LG Philips LCD Co venture had an almost fourfold jump in quarterly profit, lifted by demand for its liquid-crystal displays. Taiwan Semiconductor Manufacturing Co (TSMC,
Benchmarks in Hong Kong, South Korea, Taiwan, Singapore, Thailand, India and Sri Lanka gained.
UFJ Holdings, Japan's fourth-largest bank, climbed 7.2 percent to ¥462,000, its biggest jump since May 19. Sumitomo Trust, the country's sixth-largest lender by assets, advanced 4.7 percent to ¥752.
In May, Sumitomo Trust said it will buy UFJ Trust for at least ¥300 billion (US$2.7 billion), making it Japan's biggest provider of custodial and corporate-pension services.
"We are working towards deciding on the details and the timing of the merger by the end of this month," the two banks said in a statement. "Nothing has been decided at this point."
The Nihon Keizai Shimbun said that the two banks may complete the transaction this year, earlier than they planned.
Accelerating the trust bank takeover will provide UFJ Holdings with funds it needs to meet a government target of disposing of ¥2.35 trillion of bad loans by March 31, Jason Rogers, a credit analyst at Barclays Capital, said in a report.
The Topix Bank index rose 3.3 percent, ending a six-day, 9.3 percent decline. The losses had been fueled by speculation Japan's ruling Liberal Democratic Party (LDP) will lose seats in an election this weekend.
Voters are almost evenly divided in their preference for Prime Minister Junichiro Koizumi's LDP and the opposition Democratic Party of Japan in advance of today's upper-house election, the Asahi Shimbun said, citing a poll taken on Tuesday and Wednesday.
LG Electronics, South Korea's No. 2 electronics maker, advanced 3.6 percent to 52,400 won. LG.Philips, a venture between LG Electronics and Royal Philips Electronics NV of the Netherlands, said net income rose to 701 billion won (US$609 million) from a year earlier.
LG Philips, the world's second-largest maker of liquid crystal displays, plans to sell shares to the public in Seoul and New York next week.
LG Electronics and other television-set makers also advanced on optimism sales will rise as South Korea picked a standard for digital television broadcasts after a four-year debate.
"Good earnings results from LG Philips will be reflected in LG Electronics' earnings," said Yoo Ji Yeong, who helps manage the equivalent of US$868 million at CJ Investment Trust Management Co in Seoul. "Digital TV will also boost the shares as people expect demand for new TVs will rise."
The Kospi gained 0.5 percent, narrowing its loss this week to 1.1 percent.
The TAIEX index rose 1.1 percent, completing a 0.5 percent gain for the week.
TSMC added 2.2 percent to NT$46. The world's largest supplier of made-to-order computer chips said last month's sales increased 26 percent to a record NT$22.5 billion (US$667 million) from NT$17.8 billion a year earlier.
Chi Mei Optoelectronics surged by its daily 7 percent limit to NT$53. Sales at Taiwan's second-largest maker of flat-panel displays more than doubled last month from a year ago to NT$9.88 billion.
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