Asian stocks rose yesterday after China cut interest rates for the third time in six months.
China Overseas Land and Investment Ltd climbed by 4.1 percent in Hong Kong as Chinese developers rallied on lower borrowing costs. Woodside Petroleum Ltd climbed by 2.1 percent in Sydney as energy shares rose most among the MSCI Asia Pacific Index’s industry groups.
Toshiba Corp sank the most in four years in Tokyo after the electronics manufacturer withdrew its earnings forecast pending an internal probe into its accounting. Sharp Corp plunged 26 percent after the display manufacturer said it was considering reducing capital and selling shares.
MSCI, SHANGHAI
The MSCI Asia-Pacific Index added 0.3 percent to 151.63 as of 4:03pm in Hong Kong. The Shanghai Composite Index surged by 3 percent after the People’s Bank of China eased policy as weak data added to signs that Asia’s largest economy might struggle to reach its economic growth goal.
“Given that China’s growth and inflation are below targets, additional stimulus seems to be the right response,” Steven Milch, chief economist at Suncorp Wealth Management in Sydney, said by telephone. “Versus bonds, equities do not look stretched, but if you look at PE [price-earnings] ratios on some markets, whether it is the US or Australia, you could conclude that markets are above fair value. Some of that has been corrected in the last couple of weeks.”
BENCHMARK
Shares on the Asian benchmark index traded at 14.4 times estimated earnings as of Friday, compared with 17.9 for the Standard & Poor’s 500 Index and 17.7 for the Shanghai Composite Index, according to data compiled by Bloomberg.
The Shanghai Composite Index rallied by 111 percent over the past year amid speculation that the government would do more to boost growth. The five-day volatility on the index climbed to the highest in more than three months as the nation’s longest bull market continued.
Shanghai’s equity benchmark plunged by 5.3 percent last week amid concerns about new share sales, margin-trading growth and trade.
MISSED ESTIMATE
Friday’s data showed overseas shipments unexpectedly fell by 6.2 percent last month, while a Saturday report showed consumer price gains missed estimates.
The People’s Bank of China reduced its one-year lending and deposit rates by a quarter-point each. In another step to free up interest rates, the monetary authority also is to raise the limit on what banks can pay savers.
Taiwan’s TAIEX lost 0.29 percent. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong increased by 1 percent, while the city’s benchmark Hang Seng Index rose by 0.5 percent.
Japan’s TOPIX and South Korea’s KOSPI each added 0.6 percent. Singapore’s Straits Times Index advanced by 0.5 percent. New Zealand’s NZX 50 Index gained 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.2 percent, erasing gains of as much as 1.1 percent.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
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