Sun, Oct 05, 2003 page10

• Exporters, Japan's banks rally

  FAITH IN THE RECOVERY The quarterly Tankan business confidence survey in Japan played a major role in boosting indexes throughout the Asia-Pacific region for the week

  • BLOOMBERG
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  Asian stocks rose this week, with benchmarks in Japan, Singapore, South Korea and Australia having their biggest gains in at least six weeks.

  Mizuho Financial Group Inc led Japanese banks to their biggest weekly rally in 13 years after a Japanese central bank survey showed business confidence climbed to a two-and-a-half-year high.

  "The recovery is for real," said John Alkire, who oversees US$15 billion as chief investment officer at Morgan Stanley Asset & Investment Trust Management Co, in a televised interview with Bloomberg News in Tokyo.

  Advantest Corp, Chartered Semiconductor Manufacturing Co and Samsung Electronics Co led gains in shares of companies that rely on the US for much of their sales. Increases in manufacturing and consumer sentiment indexes added to evidence of a pick-up in business spending in the world's largest economy.

  Morgan Stanley Capital International Inc's Asia Pacific Index, which tracks more than 800 companies in 14 countries, rose 4.6 percent this week to 82.51, its highest since July 3, 2001. The banking and financial component of the MSCI Index jumped 7.6 percent this week.

  A Singapore report that showed manufacturing in the city-state expanded in September at its fastest pace in 14 months and a South Korean report showing exports last month grew at their fastest pace in eight months also boosted regional markets.

  The quarterly Tankan survey, Japan's most closely watched index of business confidence, increased in September to the highest since December 2000.

  Mizuho, the nation's largest lender by assets, surged 33 percent to ?303,000 this week. Sumitomo Mitsui Financial Group Inc, Japan's second-largest bank, jumped 17 percent to ?528,000, while UFJ Holdings Inc, the fourth-largest, climbed 23 percent to ?527,000.

  Mitsubishi Tokyo Financial Group Inc, the country's No. 3 bank by assets, rallied 22 percent to ?814,000. The lender also doubled its full-year profit forecast during the week because of lower costs related to bad loans.

  "Banks are rallying on hopes of a recovery in the economy," said David Chapman, who helps manage about US$700 million in global equities at Towry Law Asia Ltd in Hong Kong.

  The Nikkei 225 Stock Average added 3.8 percent to 10,709.29, and the Topix added 4.5 percent to 1066.86, their biggest gains since the week ended Aug. 22 and Aug. 15, respectively.

  Advantest, the world's biggest maker of chip testing equipment, added 3.3 percent to ?7,620.

  Signs of accelerating growth in Japan, the world's second-biggest economy, prompted investors to shift their money to domestic-focused stocks on prospects they'll gain more from an economic recovery. Ito-Yokado Co, Japan's largest retailer, added 14 percent to ?4,060.

  Singapore's Straits Times index rose 2.6 percent, its biggest weekly rise in six. Chartered Semiconductor, which gets about two-thirds of its sales from the US, rose 6.8 percent.

  The Singapore Institute of Purchasing and Materials Management said after the market closed Thursday that its key purchasing managers' index rose to 52, from 51.3 in August. A reading above 50 indicates production expanded.

  Factories reported higher orders, signaling the city-state's economy may gain momentum in the months ahead.

  South Korea's Kospi added 2.6 percent in the four days ended Oct. 2, its biggest weekly gain in six. The market was closed Friday for a holiday.

  South Korean exports surged 24 percent from a year earlier to US$17.2 billion, the commerce ministry said in a statement Wednesday in Seoul. That's more than double August's gain and the 9.8 percent median increase forecast in a Bloomberg News survey of 10 economists.

  Samsung Electronics, which gets about a fifth of its sales from the US, rose 5.3 percent to 408,500 won for the week. LG Electronics Inc, the nation's No. 2 electronics maker whose exports account for more than 60 percent of sales, gained 6.5 percent to 57,500 won.

  Australia's S&P/ASX 200 Index gained 1 percent for the week, its biggest weekly advance in six. BHP Billiton, the world's largest miner, was the fourth biggest contributor to the rise with a gain of 1.6 percent for the week.

  Hong Kong's Hang Seng index gained 2.8 percent this week to 11,608.72, its highest since May 24, 2002. HSBC Holdings Plc, the world's second-largest bank by assets, added 2.4 percent to HK$107 on optimism of economic expansion in the US and Japan.
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