Is this a pump on Bernanke speak or a genuine good faith rally ?
If you enjoy the content at iBankCoin, please follow us on TwitterApril 6 (Bloomberg) — Asian stocks rose for a fourth day, led by banks and electronics makers, after U.S. Federal Reserve Chairman Ben S. Bernanke said policies to unfreeze credit markets are working.
Mizuho Financial Group Inc., Japan’s second-largest publicly traded lender, climbed 1.5 percent in Tokyo. HSBC Holdings Plc, Europe’s biggest bank, added 1 percent in Hong Kong as the company raised about $17.7 billion from the U.K.’s largest ever rights offer. Panasonic Corp., the world’s biggest maker of consumer electronics, jumped 4.6 percent after Nomura Holdings Inc. raised the shares to “buy” and the yen weakened to a five-month low.
“I’m getting encouraged by what’s happening,” said Paul Xiradis, who manages the equivalent of $8 billion as chief executive officer of Ausbil Dexia Ltd. in Sydney. “The signs are that recovery will occur some time later this year, if not early next. I was looking for signposts and now we’re starting to get them.”
The MSCI Asia Pacific Index gained 1.5 percent to 87.97 as of 11:14 a.m. in Tokyo, paring its drop this year to 1.8 percent. The MSCI Asia Index has rallied 25 percent from a more than five-year low reached on March 9. A gain of more than 20 percent indicates stocks may have entered a bull market.
Japan’s Nikkei 225 Stock Average jumped 2.3 percent to 8,949.94. South Korea’s Kospi Index rose 2 percent even after North Korea launched a rocket yesterday that flew over Japan. All markets open for trading advanced. China is shut today for a public holiday.
Rising Valuations
Futures on the U.S. Standard & Poor’s 500 Index added 0.5 percent. The measure gained 1 percent on April 3, as the VIX index, an index of market volatility known as Wall Street’s “fear gauge,” fell below 40 for the first time since January, indicating traders are becoming more confident about the market advance.
“Relieving disruptions in credit markets and restoring the flow of credit to households and businesses are essential if we are to see, as I expect, the gradual resumption of sustainable economic growth,” Bernanke said the same day. “So far the programs are having the intended effect.”
Mizuho climbed 1.5 percent to 208 yen. Finance companies, the worst performers as a group on the MSCI Asia Pacific Index in the past 12 months, contributed to 31 percent of the gauge’s advance today.
HSBC gained 1 percent to HK$49.95 as investors bought 97 percent of its rights offer. HSBC on March 2 said it would seek the money after its North American operation posted a 2007 pretax loss of $15.5 billion.
‘Degree Of Relief’
The four-week stock rally has boosted the average valuation of companies on the MSCI Asia Pacific Index to 18 times reported profit, the highest since Nov. 30, 2007, according to data compiled by Bloomberg.
“The comments Bernanke made pointing to calmer credit conditions are delivering a degree of relief,” said Masaru Hamasaki, a strategist at Toyota Asset Management Co., which holds about $3.3 billion. “We’ve had a good run recently as the intense bearishness has receded, but for markets to continue higher we’ll need to see some data confirming that stimulus measures are having an effect.”
Panasonic jumped 4.6 percent to 1,270 yen. The shares were raised to “buy” from “neutral” by Nomura analyst Eiichi Katayama, who cited the focus of Panasonic’s management on profitable business segments.
Japanese exporters climbed after the yen weakened to a five-month low against the dollar and the euro, as last week’s worldwide equities rally added to speculation that the global financial crisis is easing. A weaker yen boosts the value of overseas sales for Japanese companies.
Nissan Motor Co., Japan’s third-largest automaker, added 5 percent to 487 yen. Koichi Sugimoto, an analyst at Merrill Lynch & Co. in Tokyo, lifted his target price on the shares to 350 yen from 250, citing the recent weakness of the yen versus the dollar.
South Korea’s Kospi has risen 9.5 percent in the past five days. North Korea launched a Taepodong-2 rocket yesterday purportedly to orbit a communications satellite. The United Nation’s Security Council adjourned yesterday without agreeing to additional sanctions on North Korea called for by Japan and the U.S.
