Asian stocks advanced for the seventh time in eight weeks, sending a regional index to the highest level in four months, as production and earnings figures lifted confidence that the region’s economies have started to recover.
Canon Inc, the world’s largest seller of digital cameras, gained 8.1 percent after cost cuts helped the company boost its profit forecast and Japan’s production levels increased for the first time in six months. Li & Fung Ltd (利豐), the biggest supplier of toys and clothes to Wal-Mart Stores Inc, added 10 percent ahead of a report that Chinese manufacturing increased for a fifth month. Lion Nathan Ltd soared 41 percent after receiving a takeover offer.
The MSCI Asia-Pacific Index added 1.6 percent this week to 90.91, a level not seen since Jan. 7. Asian markets have rallied 29 percent since the MSCI benchmark dropped to an almost six-year low on March 9.
“All the things are in place for the bear market to have ended,” Anthony Bolton, London-based president of investments at Fidelity International, which oversees US$157.3 billion, told Bloomberg Television in Hong Kong. “We’re going to see a slow economic upturn, but that’s enough for the stock market. If you wait for things to get better, you’ll miss the rally.”
Japan’s Nikkei 225 Stock Average surged 3.1 percent to 8,977.37. Indonesia’s Jakarta Composite Index posted the region’s largest gain with an 8.3 percent advance after companies including PT Bank Rakyat Indonesia, the country’s No. 2 financial services provider, reported rising profits.
Markets shrugged off the outbreak of swine flu, and the bankruptcy of Chrysler LLC on Thursday also failed to derail market gains.
MSCI’s Asian index plunged by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to idle factories and lay off workers.
Taiwan’s TAIEX index posted its steepest gain since 1991 on Thursday as the government allowed Chinese investments for the first time since a civil war ended six decades ago.
In the week to Thursday, the weighted index rose 111.80 points, or 1.90 percent, to 5,992.57 as Thursday’s rally made up losses earlier in the week on swine flu fears.
Average daily turnover stood at NT$128.28 billion (US$3.86 billion), compared with NT$130.81 billion a week earlier.
The market was closed on Friday for the Labor Day holiday.
Far EasTone Telecommunications Co (遠傳電信), Taiwan’s third-largest phone company, surged by 7.6 percent to NT$37.65 after China Mobile Ltd (中國移動) offered to buy a 12 percent stake for NT$17.77 billion (US$529 million).
Taiwanese share prices are expected to extend their gains next week on hopes over improving relations with China, dealers said on Thursday.
Buying next week may focus on large-cap electronic and financial stocks to help push the market past the psychological 6,000-point level and challenge 6,200 points, dealers said.
However, profit taking may emerge in the second half of the week as an outbreak of swine flu remains a concern to the already weak global economy, they said.
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they
CROSS-STRAIT TENSIONS: MOFA demanded Beijing stop its military intimidation and ‘irrational behavior’ that endanger peace and stability in the Indo-Pacific region The Presidential Office yesterday called on China to stop all “provocative acts,” saying ongoing Chinese military activity in the nearby waters of Taiwan was a “blatant disruption” of the “status quo” of security and stability in the Indo-Pacific region. Defense officials said they have detected Chinese ships since Monday, both off Taiwan and farther out along the first island chain. They described the formations as two walls designed to demonstrate that the waters belong to China. The Ministry of National Defense yesterday said it had detected 53 military aircraft operating around the nation over the past 24 hours, as well
TECHNICAL LEAD: The US needs to boost its missile technology and build a communications network able to withstand hackers, Admiral Samuel Paparo said US Indo-Pacific Commander Admiral Samuel Paparo said the US is confident it could defeat China in the Pacific, but that technical advantage is shrinking, the Washington Post reported yesterday. Speaking at the Reagan Defense Forum on Saturday, Paparo said the US needs to maintain its technical lead over China by enhancing missile technology and building a communications network able to withstand hackers, the paper reported. Although the US is able to hit long-distance and difficult targets with its advanced cruise missile system, each launch costs more than US$1 million, he said. By contrast, drones, which are relatively cheap to build and develop, can
‘LAGGING BEHIND’: The NATO secretary-general called on democratic allies to be ‘clear-eyed’ about Beijing’s military buildup, urging them to boost military spending NATO Secretary-General Mark Rutte mentioning China’s bullying of Taiwan and its ambition to reshape the global order has significance during a time when authoritarian states are continuously increasing their aggression, the Ministry of Foreign Affairs (MOFA) said yesterday. In a speech at the Carnegie Europe think tank in Brussels on Thursday, Rutte said Beijing is bullying Taiwan and would start to “nibble” at Taiwan if Russia benefits from a post-invasion peace deal with Ukraine. He called on democratic allies to boost defense investments and also urged NATO members to increase defense spending in the face of growing military threats from Russia
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