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Asian Energy Stocks Gain on Higher Oil Prices; Japan Declines
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By George Hsu
Nov. 25 (Bloomberg) -- Asian energy stocks gained this week after crude oil had it biggest weekly advance this month. PetroChina Co. and Singapore Petroleum Co. climbed.
``Chinese demand for resources is going to drive the market for the foreseeable future,'' said Richard Wallace, who manages $100 million at Wallace Funds Management in Sydney. ``Investors are predicting the good times are going to last.''
Japanese stocks fell for a fourth week after the government cut its evaluation of the economy for the first time in almost two years and as companies trimmed earnings forecasts. Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. paced declines among the nation's lenders. Sanyo Electric Co. had its worst week in more than five years.
The Morgan Stanley Capital International Asia-Pacific Index rose 0.4 percent this week to 132.53. A measure of energy stocks rose 2.3 percent, the biggest advance among the regional gauge's 10 industry groups.
Benchmarks in Hong Kong, Indonesia, India and Singapore climbed to all-time highs during the week. China's Shanghai 300 Index jumped 4.8 percent, its biggest weekly advance in six months.
PetroChina, China's largest oil producer, climbed 7.7 percent this week. Citigroup Inc. initiated coverage on PetroChina with a ``buy'' rating, according to a research report published this week. Singapore Petroleum, the nation's only publicly traded refiner, rose 2.3 percent. SK Corp., Asia's fourth-largest oil refiner, climbed 1.9 percent, the Seoul-based company's sixth weekly advance.
Crude oil in New York climbed 6.2 percent this week. It may rise next week on speculation increased demand for heating fuel during the U.S. winter will cut inventories. Seventeen of 35 analysts, traders and brokers, or 49 percent, said prices will gain, according to a Bloomberg News survey. Eight expect a decline and 10 forecast little change.
Worries About Japan
Mizuho Financial Group, Japan's second-biggest lender, lost 4.2 percent after dropping to a one-year low this week. Mitsubishi UFJ Financial Group Inc., the nation's largest lender by assets, declined 4.8 percent. Nomura Holdings Inc., the nation's biggest brokerage, dropped 2.4 percent, its fifth weekly decline.
``There are worries in Japan about global and domestic consumption,'' said Jon Easton, who manages about $200 million in Japanese equities at EN Asset Management in Tokyo. ``That's the major negative in investors' minds.''
Japan's government, on Nov. 22, lowered its assessment for the nation's economy. ``The economy is recovering, despite some weakness in consumption,'' Japan's Cabinet Office said in its report for November. ``Private consumption is almost flat,'' it added, lowering the assessment for the first time since December 2004. In its reports between February and October the note had said Japan's economy was ``recovering.''
Sumitomo Mitsui, Japan's third-largest lender by assets, slumped 5.8 percent. The bank said on Nov. 22 second-quarter profit dropped 40 percent to 123.6 billion yen ($1.05 billion) as interest income and fees dropped.
Sanyo Electric's 12 percent plunge make the stock the second-worst performer in the region. Sanyo, the world's largest maker of rechargeable batteries, after the market closed yesterday, forecast a third year of losses because of slumping sales and unveiled plans to trim 2,200 more jobs.
Hong Kong, Taiwan Growth
Hong Kong's Hang Seng Index rose 0.4 percent this week, the eighth weekly advance. It closed at a record 19,260.30 on Nov. 23. The city's economic growth expanded 6.8 percent in the third quarter, more than economists forecast.
BOC Hong Kong (Holdings) Ltd., the city's second-largest bank by assets, climbed 5.7 percent in the week. Bank of East Asia Ltd., the third largest, added 3.2 percent.
``The growth mainly comes from the financial sector,'' said Wilfred Sit, who helps manage about $4 billion of Asian equities at Baring Asset Management (Asia) Ltd. in Hong Kong. ``If the economy continues to be strong, it certainly helps'' improve the outlook for company earnings and boost market sentiment, he said.
Cheung Kong (Holdings) Ltd. this week climbed to its highest in more than five years after Credit Suisse Group initiated coverage on the stock with an ``outperform'' rating, citing the company's growth in China. Cheung Kong, the city's second-largest developer by market value, jumped 5.9 percent.
``Upside potential is great for Cheung Kong,'' said Tat Auyeung, who helps manage $400 million in Asian stocks at Apex Capital Management in Hong Kong. China exposure ``definitely helps them.''
Taiwan's Taiex index rose 2.3 percent this week. The island's gross domestic product climbed 5 percent from a year earlier in the third quarter, outpacing the 4 percent increase forecast in a Bloomberg News survey of economists. Hon Hai Precision Industry Co., Taiwan's largest electronics company by sales, climbed 5.1 percent. Acer Inc., the world's fourth- biggest personal-computer supplier, surged 15 percent.
Qantas Bid
Qantas Airways Ltd., Australia's largest airline, jumped 12 percent. The company said it received a takeover approach from Macquarie Bank Ltd. and Texas Pacific Group.
``Interest from private equity firms is a vote of confidence for the market,'' said Shane Oliver, who helps manage about $64 billion at AMP Ltd. in Sydney. ``M&A activity in Australia is in early days yet. This could go on for another couple of years.''
Hong Kong-traded Foxconn International Holdings Ltd., the world's biggest contract cell-phone maker, slumped 9.9 percent after Merrill Lynch & Co. downgraded the stock on concern that growth of handset orders may slow.
Elsewhere, Shanghai Pudong Development Bank Co. rallied 6.4 percent this week after the Chinese partner of Citigroup Inc. raised 6 billion yuan ($762 million) from a share offering.
Chinese stocks also climbed after the yuan strengthened against the dollar, raising speculation a firming currency will boost the value of local assets, attracting more overseas investors. China Merchants Bank Co., the country's most profitable lender, advanced for a fourth week, adding 2.9 percent.