Sun, Nov 02, 2003 page10

• Asian stocks have weekly rise as earnings fuel rally

  • BLOOMBERG
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  Asian stocks gained this week as corporate earnings in Japan, South Korea and Taiwan rose on the back of improved signs of global economic growth. Matsushita Electric Industrial Co and Hyundai Motor Co led the advance.

  The Nikkei 225 Stock Average added 2.2 percent to 10,559.59 in the past five days, completing a 3.3 percent gain for October.

  South Korea's Kospi index had its biggest monthly gain in two years. Hong Kong's Hang Seng Index rose for a seventh month, its longest stretch since 1992. Morgan Stanley Capital International Inc's Asia-Pacific Index climbed 5.7 percent last month.

  "There's not too much bad news out there," said Pano Raftopoulos, who helps manage the equivalent of US$400 million at Challenger Portfolio Management Ltd in Sydney. "That's what markets need to feed on; if you get growth improving, you get profitability improving, and that's what markets want."

  Computers gain

  Computer related-stocks rose as profit results from companies such as Advantest Corp and Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) indicated that industry demand is picking up. Goldman, Sachs & Co also raised this year's global personal computer growth forecast.

  The MSCI Asia-Pacific Index has advanced 45 percent from its record low set on April 28. Exporters had led gains amid optimism that a US-led recovery would boost profit while kindling expansion in domestic markets.

  Meanwhile, in the US, the Standard & Poor's 500 Index increased 2.1 percent for the week, while the Dow Jones Industrial Average rallied 2.3 percent and the NASDAQ Composite Index jumped 3.6 percent. The advances were the biggest since week ending Oct. 3.

  The benchmark indexes completed their biggest monthly gains since at least May. The S&P 500 rose 5.5 percent and the Dow average gained 5.7 percent, for the largest increases since April.

  The NASDAQ Composite Index performed the best of the three major benchmarks, rallying 8.1 percent. That's the most since May.

  Japan's Matsushita Electric, the world's largest consumer-electronics maker by sales, climbed 9.6 percent this week to ¥1,449. The company, which exports 35 percent of its products, said on Tuesday that second-quarter net income surged 45 percent on higher sales of Panasonic flat-screen televisions and DVD players.

  Honda Motor Co, Japan's No. 2 automaker, gained 1.2 percent to ¥4,340. The company gets about 90 percent of its operating profit from the US.

  Hyundai Motor, South Korea's largest automaker, climbed 9.9 percent to 39,450 won. Exports account for more than half of the carmaker's sales. SK Telecom Co, South Korea's biggest cellphone company, said Tuesday third-quarter profit rose 15 percent, beating some analysts' estimates. The stock added 1 percent.

  South Korea

  The Kospi rose 4.6 percent to 782.36 this week. It advanced 12 percent for October, its largest since November 2001.

  Government reports in South Korea and Japan this week showed that industrial production in both countries gained more than some economists anticipated in September as overseas demand increased.

  US reports on economic growth, consumer confidence and durable goods boosted some investors' expectations that demand for Asian-made products will increase. The US GDP grew at an annual rate of 7.2 percent in the third quarter, the biggest gain since 1984, the Commerce Department said earlier this week.

  Federal Reserve policy makers on Tuesday voted to keep the benchmark US interest rate at a 45-year low.

  "Spending is firming, and the labor market appears to be stabilizing," the Federal Open Market Committee said.

  The Hang Seng Index added 3.9 percent, completing its seventh monthly gain. That's the longest streak since a nine-month run ended June 1992. CNOOC Ltd, China's biggest offshore oil producer, rallied 7.3 percent, after the company agreed to buy a stake in ChevronTexaco Corp's US$7.7 billion Gorgon natural gas project in Australia, which will supply to China.

  Computer-related stocks gained as Goldman Sachs raised its worldwide personal computer unit growth forecast to 10.5 percent for this year from the previous 7.6 percent.

  Taiwan

  TSMC, the world's largest supplier of made-to-order chips, advanced 3.9 percent to NT$67. It said this week that third-quarter profit rose almost five times after more orders allowed it to run its plants at near full capacity.

  The company plans to increase spending next year on new plants and equipment to meet rising demand, chairman Morris Chang said. The TAIEX rose 2.2 percent to 6045.12. For last month, it gained 7.7 percent.

  Advantest, the world's biggest maker of equipment used to test computer memory chips, surged 12 percent to ¥8,190. The company raised its full-year sales and profit forecasts because customers will buy more test devices to meet rising demand for chips used in digital cameras and mobile phones.

  Advantest was among Japanese companies that reported improved earnings this week. Fujitsu Ltd, Japan's biggest maker of business computers, posted a narrower second-quarter loss and Hitachi Ltd, Japan's largest electronics maker, doubled its annual profit forecast.

  "The technology industry is showing hard evidence of a recovery," said Kenichi Koyama, who helps manage US$5.1 billion at Fukoku Capital Management Inc in Tokyo. "The earnings are looking good, which will continue to support the sentiment in the market."

  Optimism that increased economic activity will fuel metals demand lifted copper futures in New York to six-year highs, boosting shares of Australian miners such as BHP Billiton and Rio Tinto Group.

  An index of mining and materials companies was the main contributor to the S&P/ASX 200 Index's 0.5 percent gain this week.

  BHP Billiton, the world's third-largest copper producer, climbed 3.4 percent to A$11.72 in the past five days. Rio Tinto, the world's fourth largest, jumped 3.2 percent to A$35.65.
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