News Content
Asian Stocks Rise for Second Week; DBS Climbs on Singapore GDP
Asian stocks rose for a second week as record sales at Intel Corp. and unprecedented economic growth in Singapore overshadowed weak U.S. factory reports and a slowdown in China.
LG Corp., the largest shareholder in the world’s third- biggest maker of mobile phones, surged 12 percent to 73,700 won as Intel’s second quarter sales beat estimates. DBS Group advanced 3.9 percent in Singapore after the city-state announced its economy expanded at a record 18.1 percent pace in the first half of 2010. Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc. and Target Corp., dropped 3.4 percent in Hong Kong as Federal Reserve officials downgraded their outlook for the U.S. economy and retail sales slowed.
The MSCI Asia Pacific Index climbed 0.05 point, or less than 0.1 percent, this week to 116.23, its smallest weekly advance since October 2005. A late surge by Indian shares pulled the index into positive territory after declining U.S. factory output and weaker-than-expected earnings at Google Inc. had seen the Asian gauge erase gains from earlier in the week.
“Expectations for the economic recovery were strong but the momentum is weakening,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which oversees $73 billion in assets. “It seems spending by both companies and households has leveled off. We can’t be very optimistic about the economic prospects yet.”
LG Corp. Rises
Japan’s Nikkei 225 Stock Average declined 1.9 percent this week, led by banks after the ruling party lost control of the upper house in elections. China’s Shanghai Composite Index lost 1.9 percent as China’s expansion slowed. Hong Kong’s Hang Seng Index declined 0.6 percent. Australia’s S&P/ASX 200 Index rose 0.6 percent. South Korea’s Kospi Index rose 0.9 percent. Singapore’s Straits Times Index climbed 1.4 percent after its economy grew at a record pace.
Tata Consultancy Services Ltd. climbed 5.3 percent to 833.65 rupees, giving it a market value of $34.9 billion and making it Asia’s most valuable software developer. Tata Consultancy’s shares lead gains on the Bombay Stock Exchange’s benchmark Sensitive Index, or Sensex, which finished the week 0.7 percent higher.
Intel had record second-quarter revenue and predicts third- quarter sales will be $11.6 billion, plus or minus $400 million, the Santa Clara, California-based company said today in a statement. Analysts had estimated $10.9 billion on average, according to a Bloomberg survey.
Singapore’s Record Growth
Gains by technology stocks were pared after Google, owner of the world’s most popular search engine, reported profit was $6.45 a share in the second quarter. Analysts had estimated $6.52, according to a Bloomberg survey.
DBS climbed 3.9 percent to S$14.80. City Developments Ltd., Singapore’s second-biggest home builder, added 3.1 percent to S$11.34. Capitaland Ltd., Southeast Asia’s largest developer, increased 3 percent to S$3.79.
Singapore’s gross domestic product expanded at a 26 percent annualized pace in the second quarter from the previous three months, after a revised 45.9 percent gain in January to March, the trade ministry said July 14. Growth in the first half was the fastest since records began in 1975, prompting the government to predict GDP will rise 13 percent to 15 percent in 2010.
U.S. Economic Data
In Hong Kong, Li & Fung Ltd. dropped 3.4 percent to HK$36.50. Esprit Holdings Ltd., a global fashion retailer, declined 1.7 percent to HK$43.45. Stocks also fell after China’s economic expansion eased to 10.3 percent in the second quarter from 11.9 percent gain the previous quarter.
In the U.S., factory output fell the most in a year last month, according to a Federal Reserve report. Sales at U.S. retailers dropped 0.5 percent in June, more than projected, Commerce Department figures showed on July 14.
Separately, minutes of a June meeting of Federal Reserve officials showed that the U.S. central bank’s economic outlook assessment “softened,” and that policy makers saw no need to boost economic stimulus even as they trimmed growth forecasts.
The MSCI Asia Pacific Index has slumped about 10 percent from its high this year on April 15 as Europe’s debt crisis and Chinese steps to curb property prices spurred concerns the global economy may slow. The retreat drove down the average price of shares in the gauge to 14 times estimated earnings.
‘Sense of Caution’
Nintendo Ltd., maker of Wii game consoles, tumbled 6.8 percent to 24,350 yen this week in Osaka, Japan, after U.S. sales of its DS handheld game player fell by a third in June. Panasonic Corp., the world’s biggest maker of home electronics and which earns almost half its sales overseas, dropped 5.4 percent to 1,119 yen in Tokyo.
“A sense of caution is increasing that a slowdown in consumer spending in the U.S. may spread to manufacturing,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “Stocks that rely on profits from the country will likely decline.”
China’s economic expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, signaling a deeper second-half slowdown that may add to risks for the global economy.
China Life Insurance Co., the nation’s biggest insurer, fell 5.3 percent to HK$33.40 in Hong Kong. It was the biggest single drag on the Asia Pacific Index for the week.
China’s data “could be a signal for a slowdown in economic growth and corporate earnings for the second half of the year,” said Peter So, head of research at CCB International Securities Ltd.
Agricultural Bank IPO
Poly Real Estate Group Co., China’s second-largest developer, slumped 1.4 percent to 11.26 yuan in Shanghai after China said it will “strictly” enforce policies preventing speculative real-estate investment. Country Garden Holdings Co., a mainland developer, slipped 0.4 percent.
Agricultural Bank of China, China’s largest bank by customers, began trading this week. It rose to HK$3.27 from the initial public offering price of HK$3.20 in Hong Kong on July 16. In Shanghai, It declined 0.4 percent to 2.69 yuan from the IPO price of 2.68 yuan in the two days it traded.
The lender, also known as AgriBank, raised $19.2 billion in the IPO.
LG Corp., the largest shareholder in the world’s third- biggest maker of mobile phones, surged 12 percent to 73,700 won as Intel’s second quarter sales beat estimates. DBS Group advanced 3.9 percent in Singapore after the city-state announced its economy expanded at a record 18.1 percent pace in the first half of 2010. Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc. and Target Corp., dropped 3.4 percent in Hong Kong as Federal Reserve officials downgraded their outlook for the U.S. economy and retail sales slowed.
The MSCI Asia Pacific Index climbed 0.05 point, or less than 0.1 percent, this week to 116.23, its smallest weekly advance since October 2005. A late surge by Indian shares pulled the index into positive territory after declining U.S. factory output and weaker-than-expected earnings at Google Inc. had seen the Asian gauge erase gains from earlier in the week.
“Expectations for the economic recovery were strong but the momentum is weakening,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which oversees $73 billion in assets. “It seems spending by both companies and households has leveled off. We can’t be very optimistic about the economic prospects yet.”
LG Corp. Rises
Japan’s Nikkei 225 Stock Average declined 1.9 percent this week, led by banks after the ruling party lost control of the upper house in elections. China’s Shanghai Composite Index lost 1.9 percent as China’s expansion slowed. Hong Kong’s Hang Seng Index declined 0.6 percent. Australia’s S&P/ASX 200 Index rose 0.6 percent. South Korea’s Kospi Index rose 0.9 percent. Singapore’s Straits Times Index climbed 1.4 percent after its economy grew at a record pace.
Tata Consultancy Services Ltd. climbed 5.3 percent to 833.65 rupees, giving it a market value of $34.9 billion and making it Asia’s most valuable software developer. Tata Consultancy’s shares lead gains on the Bombay Stock Exchange’s benchmark Sensitive Index, or Sensex, which finished the week 0.7 percent higher.
Intel had record second-quarter revenue and predicts third- quarter sales will be $11.6 billion, plus or minus $400 million, the Santa Clara, California-based company said today in a statement. Analysts had estimated $10.9 billion on average, according to a Bloomberg survey.
Singapore’s Record Growth
Gains by technology stocks were pared after Google, owner of the world’s most popular search engine, reported profit was $6.45 a share in the second quarter. Analysts had estimated $6.52, according to a Bloomberg survey.
DBS climbed 3.9 percent to S$14.80. City Developments Ltd., Singapore’s second-biggest home builder, added 3.1 percent to S$11.34. Capitaland Ltd., Southeast Asia’s largest developer, increased 3 percent to S$3.79.
Singapore’s gross domestic product expanded at a 26 percent annualized pace in the second quarter from the previous three months, after a revised 45.9 percent gain in January to March, the trade ministry said July 14. Growth in the first half was the fastest since records began in 1975, prompting the government to predict GDP will rise 13 percent to 15 percent in 2010.
U.S. Economic Data
In Hong Kong, Li & Fung Ltd. dropped 3.4 percent to HK$36.50. Esprit Holdings Ltd., a global fashion retailer, declined 1.7 percent to HK$43.45. Stocks also fell after China’s economic expansion eased to 10.3 percent in the second quarter from 11.9 percent gain the previous quarter.
In the U.S., factory output fell the most in a year last month, according to a Federal Reserve report. Sales at U.S. retailers dropped 0.5 percent in June, more than projected, Commerce Department figures showed on July 14.
Separately, minutes of a June meeting of Federal Reserve officials showed that the U.S. central bank’s economic outlook assessment “softened,” and that policy makers saw no need to boost economic stimulus even as they trimmed growth forecasts.
The MSCI Asia Pacific Index has slumped about 10 percent from its high this year on April 15 as Europe’s debt crisis and Chinese steps to curb property prices spurred concerns the global economy may slow. The retreat drove down the average price of shares in the gauge to 14 times estimated earnings.
‘Sense of Caution’
Nintendo Ltd., maker of Wii game consoles, tumbled 6.8 percent to 24,350 yen this week in Osaka, Japan, after U.S. sales of its DS handheld game player fell by a third in June. Panasonic Corp., the world’s biggest maker of home electronics and which earns almost half its sales overseas, dropped 5.4 percent to 1,119 yen in Tokyo.
“A sense of caution is increasing that a slowdown in consumer spending in the U.S. may spread to manufacturing,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “Stocks that rely on profits from the country will likely decline.”
China’s economic expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, signaling a deeper second-half slowdown that may add to risks for the global economy.
China Life Insurance Co., the nation’s biggest insurer, fell 5.3 percent to HK$33.40 in Hong Kong. It was the biggest single drag on the Asia Pacific Index for the week.
China’s data “could be a signal for a slowdown in economic growth and corporate earnings for the second half of the year,” said Peter So, head of research at CCB International Securities Ltd.
Agricultural Bank IPO
Poly Real Estate Group Co., China’s second-largest developer, slumped 1.4 percent to 11.26 yuan in Shanghai after China said it will “strictly” enforce policies preventing speculative real-estate investment. Country Garden Holdings Co., a mainland developer, slipped 0.4 percent.
Agricultural Bank of China, China’s largest bank by customers, began trading this week. It rose to HK$3.27 from the initial public offering price of HK$3.20 in Hong Kong on July 16. In Shanghai, It declined 0.4 percent to 2.69 yuan from the IPO price of 2.68 yuan in the two days it traded.
The lender, also known as AgriBank, raised $19.2 billion in the IPO.
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