Sun, May 29, 2016 page15

• Japanese shares lead rally in Asian stock market

  • Bloomberg and staff writer, with CNA
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  Asian stocks rose on Friday, with the benchmark equities index posting its first weekly advance in five weeks, as investors awaited comments from the head of the US Federal Reserve. Japanese shares climbed amid speculation the nation would delay a sales tax increase.

  The MSCI Asia Pacific Index gained 0.6 percent to 128.21, as all 10 industry groups advanced. However, the gauge is down 2.3 percent this month as investors’ anxiety over the US central bank’s plan to raise interest rates as early as next month offset increasing signs of strength in the world’s biggest economy. Fed Chair Janet Yellen was due to speak after Asian markets close on Friday at Harvard University.

  “We are still a little cautious,” said Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about US$7.2 billion. “Yellen is likely to continue with the rhetoric of wanting to hike and that’s their plan. Equity markets still offer value on a medium-term basis and it’s certainly the only place where you’re getting any sort of yield. We’d welcome a pullback because that would give us a chance to do some buying at more reasonable prices.”

  Asian equities rose 2.1 percent this week after dropping 6.4 percent from an April high through Friday last week. Investors have been whipsawed this year, with the regional gauge slumping 14 percent through a February low on concern a devaluation of the Chinese yuan would curb global growth and amid prospects for higher US. borrowing costs. It then rallied almost 20 percent through this year’s peak in April before retreating again.

  Japan’s TOPIX advanced 0.5 percent following media reports Japanese Prime Minister Shinzo Abe has decided to delay an increase in the sales tax. The Nikkei 225 Stock Average climbed 0.4 percent. Trading volume continued to remain low, at 81 percent of the 30-day average, after it hit the lowest this year on Tuesday.

  Abe made the decision based on the global economic slowdown and the impact of last month’s Kumamoto earthquake, the Asahi Shimbun said.

  Data on Friday showed Japan’s consumer prices last month dropped for a second month as Bank of Japan Governor Haruhiko Kuroda struggles to spur inflation with record asset purchases and negative interest rates. The figures are the final set of inflation indicators to be released before the bank’s board meets on June 15 and 16.

  In Taipei, shares moved higher on Friday, as investors were encouraged by Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) and Siliconware Precision Industries Co’s (SPIL, 矽品精密) plans to set up a joint holding company, spurring interest in semiconductor stocks, dealers said.

  The TAIEX closed up 0.8 percent at the day’s high of 8,463.61, Taiwan Stock Exchange data showed. The weighted index also surged 4.1 percent from 8,131.26 on Friday last week.

  “Many investors appeared happy about the [ASE-SPIL] deal, which would create an IC packaging and testing giant in Taiwan and help the local IC industry compete in the global market,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said.

  Under the deal, ASE and SPIL will remain independent from each other, with the new company expected to list on the local equity market and on Wall Street in the future, the two companies said.

  ASE gained 10 percent, the maximum daily increase, to close at NT$36.35, and SPIL added 5.35 percent to end at NT$53.20, pushing up the semiconductor sub-index by 1.28 percent at the close.

  Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) rose 0.97 percent to close at NT$156.50 amid optimism over its efforts to develop 7 nanometer process technology. TSMC said on Thursday that it expects its 7nm technology to be certified in the first quarter next year, making it the first in the world.

  In the financial sector, which rose 1.23 percent, Cathay Financial Holding Co (國泰金控) rose 1.62 percent to NT$37.60 and CTBC Financial Holding Co (中信金控) gained 2.10 percent to NT$17.

  In other markets, the Shanghai Composite Index lost 0.1 percent on Friday and dropped 0.2 percent for the week amid concern a pickup in earnings growth is losing steam as the nation’s economy slows. Despite dwindling optimism, the Shanghai Composite has not strayed more than 51 points from 2,800 in the past two weeks, with declines limited by suspected buying from state-backed funds aimed at preventing the benchmark from ending below that level.

  Hong Kong’s Hang Seng Index rose 0.9 percent and the Hang Seng China Enterprises Index of mainland firms listed in the territory both gained 0.8 percent.

  Australia’s S&P/ASX 200 Index climbed 0.3 percent, New Zealand’s S&P/NZX 50 Index added 0.6 percent and South Korea’s KOSPI index rallied 0.6 percent.
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