Asian stocks rose, with the benchmark regional index climbing for the first time in four days, as the yen weakened against the dollar, boosting the earnings outlook for Japanese exporters.

Glorious Property Holdings Ltd. soared by a record 33 percent in Hong Kong after Chinese billionaire Zhang Zhirong offered as much as HK$4.57 billion ($589 million) to take the real-estate developer private.

The MSCI Asia Pacific Index  0.5 percent to 141.74 as of 11:26 a.m. in Hong Kong, with seven of the 10 industry groups on the gauge climbing. The measure advanced 9 percent this year through yesterday as investors bet the Federal Reserve will continue monthly bond buying into 2014. It is up 0.1 percent this week.

The MCSI Asia Pacific Index  traded at 13.8 times estimated earnings, compared with 16.2 on the S&P 500 and 15.1 for the Stoxx Europe 600 Index.

Regional Gauges

Japan’s Topix index advanced 0.8 percent as the yen declined to 101.22 per dollar, weakening past 101 for the first time since July. The Nikkei 225 Stock Average rose 1.2 percent. Bank of Japan Governor Haruhiko Kuroda said in parliament today in Tokyo that the yen isn’t “excessively weak.” The central bank yesterday maintained its unprecedented monetary policy.(Bloomberg)

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KUALA LUMPUR: Headline inflation will be higher in October, led by the hike in fuel prices, said economists.

The consumer price index is expected to rise by an average 2.72 per cent year-on-year.

The Statistics Department will be releasing the data today.

HSBC Bank said base year effects, arising from the 10-11 per cent hike in subsidised fuel prices in September, will likely keep the reading on October CPI at 2.6 per cent, which will still place it within Bank Negara Malaysia's comfort range.


Excluding food and fuel prices, core inflation is also set to remain stable at 1.3 per cent year-on-year.Irvin Seah of DBS Bank said the recent spike in inflation is largely policy-driven.

The government cut both RON 95 petrol and diesel subsidies by RM0.20 per litre. This raised the pump prices for RON95 petrol to RM2.10/litre and diesel to RM2/litre, up from RM1.90 and RM1.80, respectively.

"While that will save about RM3.3 billion per year for the government, the inflationary effect has been manifested in the headline inflation number."

Seah said the days of strong growth and low inflation are coming to an end.

He said there is also little justification for Bank Negara to start tightening monetary policy as the growth momentum is already slowing on easing domestic demand, while the inflationary impact of policy changes will be transient.(Business Times)

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Gold edged higher on Tuesday as the US government shut down some of its operations after Congress failed to agree on a spending bill, but gains were limited as investors believe the stand-off will likely soon be resolved.

After missing a midnight deadline (0400 GMT), US federal agencies were directed to cut back services because of partisan deadlock in Congress over Republican efforts to halt President Barack Obama's healthcare reforms by using a temporary spending bill.

The impasse also raised concerns over whether Congress can meet a more important deadline in mid-October to raise the debt-ceiling limit.

Gold gained early on Monday on safe-haven bids surrounding the shutdown, but pulled back as buying slowed despite a weaker dollar. Spot gold was up 0.13% at US$1,328.70 an ounce by 0606 GMT on Tuesday.

"Should the political wrangling continue over the debt-ceiling negotiations mid-month, this could provide the impetus for gold to break out of its US$1,300 to US$1,350 range," said Victor Thianpiriya, an analyst at ANZ in Singapore.

"The market is not putting on a big net position, which makes me think that when we get a breakout, it is likely to be sizeable."

A Sydney-based trader said gold was not seeing much safe-haven buying as the issue was likely to be resolved soon and there was not much upside to gold beyond that.

The last time the U.S. government shut down in 1995/96, gold – then trading at less than US$400 an ounce – gained about 3%.

However, failure to raise the US$16.7 trillion debt ceiling by mid-October would have a much bigger impact as it would force the US to default on some payments – an event that could cripple its economy and send shockwaves round the globe.

When the debt ceiling issue came up in 2011, an agreement was reached only in the last minute and gold hit an all-time high of US$1,920 an ounce, in part because of the uncertainties surrounding a deal.

   

SLOW PHYSICAL DEMAND       

The Perth Mint's sales of gold coins and bars in September more than doubled from the previous month but they were still 17% lower than the same period last year.

Demand for US gold coins fell 81% in September on an annual basis, as political turmoil in Syria failed to rekindle retail buying that has slowed after months of

exceptional bargain hunting, data on the US Mint website showed on Monday.

Markets in China, the world's second biggest gold consumer after India, were closed for the National Day holiday.(Reuters)

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Asian stocks rose in September, with the benchmark index heading for its biggest gain in three years, as the Federal Reserve unexpectedly maintained stimulus and data signaled China’s economy is strengthening.

Tencent Holdings Ltd., Asia’s biggest Internet company, gained 11 percent in Hong Kong this month to touch a record high. Tokyo Electron Ltd. surged 31 percent after Applied Materials Inc. announced a plan to take over the Tokyo-based company. Acom Co. soared 49 percent, spurring the consumer lender to the biggest gain on the Asian equities index, after a report Japan’s non-bank loans to individuals are picking up.  

Profits at China’s industrial companies rose 24 percent in August, data yesterday showed. A preliminary HSBC Holdings Plc and Markit Economics’ purchasing managers index for China released on Sept. 23 rose to 51.2, a six-month high.

Regional Benchmarks

Japan’s Topix index gained 10 percent in September, rising for the first month in five, as Tokyo won a bid to host the 2020 Olympic Games. The measure fell 0.1 percent this week.

Australia’s S&P/ASX 200 Index (AS51) gained 3.4 percent this month and climbed 0.6 percent since Sept 20. New Zealand’s NZX 50 Index advanced 5.3 percent in September.

Hong Kong’s Hang Seng Index jumped 6.8 percent this month and China’s Shanghai Composite Index gained 2.9 percent. Singapore’s Straits Times Index rose 6 percent.(Bloomberg)

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Japan’s industrial production rose less than economists forecast, suggesting that a recovery in the nation’s manufacturing sector is lagging a weakening yen.

Output rose 2.5 percent from November, when it declined 1.4 percent, the Trade Ministry said in Tokyo today. The median estimate of 25 economists was for a 4.1 percent gain. Production fell 7.8 percent from the previous year.

The yen has weakened more than 12 percent against the dollar in the past three months, the most among 16 major currencies tracked by Bloomberg. It was at 91.06 per dollar as of 8:52 a.m. in Tokyo. The Nikkei 225 Stock Average (NKY) has gained more than 16 percent since the beginning of December.

Japan’s three largest automakers -- Toyota Motor Corp. (7203), Honda Motor Co. and Nissan Motor Co. -- all reported falling domestic production in December from the previous month.

Manufacturing in China, Japan’s biggest export market, is expanding at the fastest rate in two years, bolstering prospects that economic growth there will accelerate for a second straight quarter.

Weaker Yen

A weaker yen makes products relatively cheaper in export markets and boosts overseas earnings for Japanese companies such as Toyota and Canon Inc. (7751) when repatriated.

Twelve analysts covering Toyota, Japan’s biggest car manufacturer, have raised their earnings estimates for the next fiscal year.
The nation’s gross domestic product shrank at an annualized 3.5 percent pace in the third quarter of last year, the second straight contraction and meeting the textbook definition of a recession.
 (Bloomberg)

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Asian stocks fell, with the regional benchmark index retreating from the highest since August 2011 on the busiest day of Japan’s earnings season, after the country’s industrial production missed estimates and U.S. growth unexpectedly stalled.

Nintendo Co., the world’s largest maker of game consoles, sank 4.7 percent in Osaka after forecasting an operating loss on lower-than-expected sales of its Wii U. Whitehaven Coal Ltd. fell 6.6 percent after saying first-half earnings will drop on lower prices. China Unicom Hong Kong Ltd. gained 1.8 percent in Hong Kong after the mobile-phone carrier said 2012 profit probably rose more than 50 percent.

Japan’s Nikkei 225 Stock Average (NKY) slid 0.5 percent after yesterday closing above 11,000 for the first time since April 2010. The nation’s industrial production rose 2.5 percent in December from the previous month, missing the 4.1 percent median economists’ estimate. More than 250 companies listed on Japan’s broader Topix Index are scheduled to report earnings today.

Kospi Index

Australia’s S&P/ASX 200 Index (AS51) declined 0.5 percent, while South Korea’s Kospi Index (KOSPI) retreated 0.3 percent. Taiwan’s Taiex Index slumped 0.3 percent even after its economy expanded more than estimated in the fourth quarter.

Hong Kong’s Hang Seng Index retreated 0.5 percent. The Shanghai Composite Index slid 0.2 percent, with trading volume 35 percent above its 30-day average at the time of day.

China Unicom

Among stocks that rose, China Unicom advanced 1.8 percent to HK$12.48 in Hong Kong. The nation’s second-largest mobile- phone company said 2012 net income probably increased more than 50 percent from a year earlier as it expanded its 3G and broadband user base. The carrier didn’t provide numbers.

Genting Singapore Plc gained 5.8 percent to S$1.55 after an executive at rival Las Vegas Sands Corp. said a Sands resort in the city had a “damned good quarter.” Genting and Las Vegas Sands operate Singapore’s two casinos.
(Bloomberg)

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Japan's Nikkei share average wrestled back almost 1 percent on Thursday, lifting off a
seven-week low as investors picked up stocks on better-than-expected earnings, but the rebound was seen as limited because of concerns over global demand.

Short-covering lent temporary support for battered stocks,while strong earnings for a few U.S. firms boosted Japanese companies in the same sectors.

But Canon, which has a large proportion of its sales in Europe, plummeted as much as 13.8 percent during the session, highlighting nerves about exposure to an unstable euro zone.

"I think the market has entered a downward spiral- it's three steps back and one step forward," said Yuuki Sakurai, CEO of Fukoku Capital Management. "There's no real problem with Canon the company itself, it's down to the extremely negative
market atmosphere at the moment."

The Nikkei gained 0.9 percent to close at 8,443.10 after slumping to just 0.8 percent above its year-to-date low of 8,295.63 on Wednesday.


Hitachi Construction Machinery Co Ltd, which had been hit by worries of a slowdown in China, gained 6.2 percent after it cut its annual profit outlook less than analysts have expected. It was helped by U.S. rival Caterpillar boosting its outlook, while competitor Komatsu Ltd rose 4.5 percent.

Robot maker Fanuc gained 5.3 percent after it maintained its half-year profit outlook on Wednesday.

TDK Corp advanced 3 percent after U.S. hard drive maker Western Digital Corp's earnings beat market expectations on record sales, assuaging fears of a slowdown in
the market.

TDK's exposure to the European market, hit by dwindling demand and a weak euro, has left it 11.9 percent down this month.

After one indebted Spanish region asked Madrid for aid last week and others seemed set to follow, fears that the euro zone's fiscal problems could yet deepen have dampened share prices of companies reliant on the region for sales.

Canon was one such stock, closing 7.8 percent down at a 40-month low after trimming its group net profit forecast by 14 percent to 250 billion yen ($3.2 billion), citing a slowdown in the global economy and the persistent strength in the yen.

"The yen isn't showing any signs of weakening and could get even stronger, which would mean the blue-chips that fought back today would slump again," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities.

Many blamed the yen's gain -- about two percent versus the dollar and more than six percent against the euro -- as a major factor for the Nikkei's poor performance.

So far this month, the Nikkei is down 6.3 percent, underperforming most other markets except for southern European countries. Ex-Japan Asian-Pacific shares were down 1.2 percent in the same period.

The broader Topix index clawed back 1.2 percent to 714.91, although the gain came after it had fallen for 13 of the past 14 sessions.

OVERSOLD?
The market is likely to be oversold in the near-term, some market players say, after the ratio of short-selling rose to one of its highest levels in years, striking a 13-month high of 32.7 percent on Monday before dropping slightly to 31.9 percent on Wednesday.

"When we've had such a high level of short-selling in the past, the market usually rises within 20 business days, as short-sellers have to close their positions," said Jun Yunoki,strategist at Nomura Securities.

Among the battered shares that benefited from some short-covering was Panasonic Corp, with a gain of 2.7 percent on the day against a 23 percent loss on the month, and Sony Corp which recovered 4.9 percent after dropping 18.7 percent since June.

Elsewhere, Olympus jumped 9.6 percent after medical device maker Terumo said on Thursday it is proposing to invest 50 billion yen ($640 million) in Olympus and form a joint holding company.

Shares of Terumo, which is now competing with Sony in seeking a tie-up with Olympus, fell 0.8 percent.

Nomura Holdings was also lifted 5.7 percent on a report that its CEO would resign to take responsibility for the leaks on share offerings from within the company's brokerage unit.(Reuters)

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China’s economic growth slowed to 7.6 percent in the three months ended June, the sixth straight deceleration, as Europe’s fiscal crisis sapped exports and a crackdown on property speculation curbed domestic demand.


Growth Target

A survey by the center of 22 domestic and foreign banks and institutions had a median forecast for third-quarter expansion of 7.8 percent.

China’s overseas sales in the first half of the year rose 9.2 percent, while imports gained 6.7 percent, putting the government at risk of missing its goal of 10 percent expansion in trade this year.
(Source: Bloomberg)


‘Effective Stimulus’

Export growth may slow in coming months, surveys of manufacturing purchasing managers indicate. A June survey released July 2 by HSBC Holdings Plc and Markit Economics showed new export orders fell at their steepest pace in more than three years while a separate index released by the government a day earlier showed overseas demand contracted for the first time since January.


Willingness to Invest

Signs of weakening domestic demand include falling factory- gate prices and softening inflation. The producer price index dropped 2.1 percent in June from a year earlier, the fourth straight decline, while consumer prices rose 2.2 percent, the smallest increase since January 2010.

The combination has lowered investment returns for Chinese industrial companies, Song said. “This is not only a problem for monetary policy, but also the willingness of companies to invest.”


Reduce Taxes

First-half profit declines at hundreds of Chinese companies may increase pressure on the government to reduce corporate taxes as part of efforts to stem the economy’s slowdown. Net income fell from a year earlier for more than half of 760 listed companies to report results, worse than in the first six months of 2009, Societe Generale SA said in a July 19 note.

Moderating inflation has given the central bank more room to ease monetary policy. It announced the second reduction in interest rates in a month on July 5 and has lowered the proportion of deposits banks must set aside as reserves three times since it started cuts in November to boost lending.

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Global stocks rose and the dollar rallied broadly on Friday after a robust U.S. labor market report beat expectations and provided another sign the world's biggest economy is recovering.

Strong acceptance from private creditors for a Greek bond swap averted a messy default and added to a slightly bullish mood, but the losses forced on the debt holders also triggered the payment of insurance contracts.

A ruling by the International Swaps and Derivatives Association that a credit event had occurred cut into gains on Wall Street and pared losses in the bond market. The euro fell further, but the announcement was widely expected and the single currency snapped back to recoup rebounded a tad.

U.S. employment grew solidly for a third straight month in February as employers added 227,000 jobs to their payrolls, the Labor Department, even though the unemployment rate held at a three-year low of 8.3 percent.

The data offered encouragement for those who see the U.S. economy moving into a more sustainable stage of recovery that could lead the Federal Reserve to drop its easy money stance earlier that the market now perceives.

The dollar hits its highest level against the yen in nearly 11 months and rallied broadly against other currencies, while safe-haven government debt prices fell. Gold reserved early sharp losses to rise nearly 1 percent in heavy trading.

The Dow Jones industrial average closed up 14.08 points, or 0.11 percent, at 12,922.02. The Standard & Poor's 500 Index added 4.96 points, or 0.36 percent, at 1,370.87. The Nasdaq Composite Index gained 17.92 points, or 0.60 percent, at 2,988.34.

For the week, the Dow fell 0.4 percent, the S&P 500 rose 0.1 percent and Nasdaq gained 0.4 percent.

Three years ago on Friday marked the depth of market lows brought on by the financial crisis. The S&P 500 now is trading at levels last seen in June 2008, before Lehman's collapse later that fall spent markets into a downward spiral. It is still 200 points below its all-time high set in October 2007.

European shares rose, supported by the U.S. labor market report. Data from the United States and emerging markets has become a key driver for European companies, which face lackluster domestic growth, as underscored by Friday's weaker-than-expected industrial output from France, Italy and Britain.

The FTSE Eurofirst 300 index of top regional shares closed up 0.4 percent at 1,079.37 points.

The U.S. data lifted the dollar broadly to multi-month highs against other currencies and initially pushed commodity prices lower. Crude oil futures later rebounded, as the data countered dollar pressure and fading euphoria over Greece's debt swap. (Reuters)

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Ho Wah Genting Bhd (HWGB), SKP Resources Bhd, Malaysia Smelting Corp Bhd(MSC), GEFUNG HOLDINGS BHD and DIJAYA CORPORATION BHD were among the stocks selection for next monday in Malaysia.

A news report said Yunnan Tin had plans to buy HWGB’s tin mining business for US$75 million.

Meanwhile, The Edge weekly reported that the emergence of Dyson, the British innovative designer of electrical appliances, as a major new customer has launched a strong stream of earnings for SKP Resources.

MSC will rope in Optima Synergy Resources Ltd as a joint venture partner to undertake tin mining operations in Indonesia. MSC signed a strategic alliance agreement with Optima Synergy, which is owned by Indonesian shareholders. The deal will allow Optima Synergy to acquire up to 23% of MSC’s unit Bemban Corp Ltd for US$1.38 million, according to MSC. Bemban in turn has a 75% stake in PT Koba Tin which has secured a mining contract from the Indonesian government.

Gefung will not go ahead with the proposed joint venture for a mixed development project on 50.74 acres of land in east of Jakarta. Gefung said the company and PT Greenworld Development “could not reach an agreement on the terms and conditions for the proposed project, the parties have mutually agreed to terminate the MoU with immediate effect”.

The Edge weekly reported that judging from the present share movement, investors seem cautious about Dijaya’s proposal to acquire 73 properties from major shareholder Tan Sri Danny Tan and family for an indicative consideration of RM948.7 million, mostly via the issuance of loan stocks. (The Edge)

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Japan's Nikkei share average slipped for a second day on Tuesday as investors bagged profits on blue chip stocks following February's 10.5 percent rally, although some attractive valuations and a softer yen supported sentiment. The benchmark Nikkei closed 0.6 percent lower at 9,637.63 after losing 0.8 percent on Monday. Mid-last week, the index touched a 7-month high of 9,866.41.

March, the final month of Japan's fiscal year, tends to be the strongest month for the Nikkei, with an average monthly rise of 1.43 percent for the index between 1972 and 2011. Reflecting that, the Nikkei volatility index, a fear gauge, fell 2.8 percent on Tuesday. The lower the volatility index, the higher the risk appetite.

China-related shares extended losses for a second session, with the Nikkei China 50 index down 1.4 percent after the world's second-largest economy cut its 2012 growth target to an 8-year low of 7.5 percent, as Beijing looks to reduce its reliance on external spending and foreign capital.

Among China-related shares, construction machinery maker Komatsu Ltd slid 2.3 percent and industrial robot maker Fanuc Ltd shed 2.5 percent.

The Nikkei has risen 14 percent so far this year, boosted by a run of U.S. economic data suggesting a robust recovery and accommodative policies by global central banks that have pushed investors back into risk assets.

Market participants said that domestic institutional investors' selling had capped recent gains.(Reuters)

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The Australian dollar weakened against all of its 16 major peers before the leaders of Germany and France meet today amid concern Europe’s sovereign-debt crisis is hurting global growth.

The so-called Aussie fell for a fourth day after data showed the South Pacific nation’s retail sales unexpectedly stagnated in November and Pacific Investment Management Co. said the Reserve Bank will need to ease monetary policy. New Zealand’s dollar, nicknamed the kiwi, maintained a three-day drop after a report showed the nation’s trade deficit widened.


Australia’s dollar fell 0.5 percent to $1.0173 as of 4:28 p.m. in Sydney from the close in New York on Jan. 6. New Zealand’s currency was little changed at 78.02 U.S. cents.


Credit Ratings

Germany will offer 4 billion euros ($5.1 billion) of six- month bills today, and France will auction a total of 7.7 billion euros of debt maturing in 364 days or less. Greece will offer bills tomorrow, while Spain and Italy will sell debt later this week.

Standard & Poor’s said last month it may lower the credit grades of 15 euro nations, including Germany and France.

Australia’s retail sales (AURSTSA) were unchanged in November, a report from the statistics bureau showed today, compared with the 0.4 percent gain estimated by economists in a Bloomberg News survey.


Australian 10-year government notes advanced, with yields falling six basis points, or 0.06 percentage point, to 3.73 percent.

Statistics New Zealand said today that the country’s imports exceeded exports by NZ$308 million ($240 million) in November, compared with a revised NZ$228 million deficit in October. The median estimate of economists was for a NZ$300 million shortfall.

Futures traders raised their bets the Australian dollar will rise against the U.S. currency, figures (.ADLRGN) from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a gain in the Aussie compared with those on a drop was 46,537 on Jan. 3. While the so-called net longs were the most since September, the number was still less than the 2011 high of 90,938.

The net longs on Australia’s currency “remain well below their highs, reflecting some uncertainty regarding the global economic outlook,” Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney, wrote in a report today. (Bloomberg)

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VEGOILS-Palm oil down on Europe fears, industry data eyed

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Asian stocks fell as a a sign for China and Japan grow is slowing down due to concern that Europe’s debt crisis is worsening.

The MSCI Asia Pacific Index fell 2.3 percent to 112.45 this week after Moody’s Investors Service and Fitch Ratings warned that Europe faces lower credit ratings as it struggles to contain its debt crisis. Italy sold 3 billion euros of five-year notes on Dec. 14 with a yield of 6.47, the most since May 1997.

The Shanghai Composite Index (SHCOMP) sank 3.9 percent, extending losses for a sixth week.

Japan’s Nikkei 225 Stock Average (NKY) decreased 1.6 percent this week after the Bank of Japan’s Tankan survey showed sentiment among the nation’s largest manufacturers deteriorated more than economists expected. South Korea’s Kospi Index dropped 1.9 percent. Australia’s S&P/ASX 200 slid 1 percent. (Bloomberg)

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Asian currencies strengthened,after a jobless claim report in US fell to the lowest level.

The rupee jumped 1.7 percent to 52.7450 per dollar in Mumbai, the biggest gain since May 2010. As for the Philippine peso rose 0.7 percent to 43.830,China’s yuan also climbed by 0.4 percent to 6.3484 which mean it was up 0.3 percent for the week. The South Korean won strengthened 0.4 percent to 1,158.73, trimming its weekly drop to 1 percent.

Meanwhile, indonesia rupiah gained 0.6 percent to 9,035 and was up 0.5 percent for the week. As for the China yuan, it has strengthened the most in two months as signs credit curbs are easing bolstered optimism policy makers will avoid a sharp slowdown in the world’s second-largest economy.

Malaysia’s ringgit advanced 0.4 percent yesterday to 3.1778 per dollar and was down 0.8 percent for the week, and Taiwan’s dollar was little changed at NT$30.369 and dropped 0.4 percent this week whereas, Thailand’s baht was up 0.1 percent at 31.34 which mean a declined of 1.3 percent for the week. (Bloomberg)

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The 17-nation euro yesterday erased losses versus the dollar after the Financial Times reported that Europe may combine temporary and planned permanent rescue facilities to bolster its bailout resources. The European Central Bank is forecast to cut interest rates tomorrow. Australia’s dollar rose against most major counterparts after a report showed faster- than predicted economic growth.

The euro advanced 0.2 percent to 104.33 yen as of 1:30 p.m. The common currency appreciated 0.2 percent to $1.3422. The dollar was unchanged at 77.73 yen. U.S. Treasury Secretary Timothy F. Geithner yesterday backed a German-French push for closer European cooperation, urging policy makers to work with central banks to erect a “stronger firewall” to end the crisis.


Rescue Funds

Operating the European Stability Mechanism in combination with the 440 billion-euro ($590 billion) temporary fund next year would potentially boost Europe’s anti-crisis resources to 940 billion euros. There were negotiations over pairing the two.


The ECB will reduce its benchmark rate to 1 percent from 1.25 percent on Dec. 8, according to the median estimate of 58 economists surveyed by Bloomberg.

ECB Governing Council member Ewald Nowotny said this week that the central bank is observing liquidity shortages in the banking sector and can do more to supply funds.

The euro will rise to $1.37 by September 2012, according to a Bloomberg News survey of analysts. It has fallen 1 percent in the past month, according to Bloomberg Correlation-Weighted Indexes tracking the currencies of 10 developed markets. The yen has advanced 2.4 percent, the best performer, and the dollar has gained 1.9 percent over that period, the data show.

High-Yield Currencies

Jobless claims in the U.S. probably fell to 395,000 last week from 402,000 the prior week, economists in a Bloomberg News survey forecast before the Labor Department tomorrow.

Consumer sentiment will likely pick up this month, according to another Bloomberg survey before the preliminary Thomson Reuters/University of Michigan survey due on Dec. 9. Confidence rose to 65.8 from 64.1 at the end of November, the data is forecast to show. (Bloomberg)

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The Australian and New Zealand dollars rose after Italy’s Cabinet approved austerity and growth measures before a summit on Europe’s debt crisis, supporting demand for riskier assets.

New Zealand’s currency was 0.6 percent from a three-week high against the yen before a report today forecast to show services industries in the U.S. expanded in November. Gains in the so-called Aussie may be limited on speculation the Reserve Bank of Australia will cut interest rates when it meets tomorrow.

Australia’s dollar advanced 0.1 percent to $1.0228 as of 2:11 p.m. in Sydney from last week in New York. The currency fetched 79.74 yen from 79.67 yen on Dec. 2. New Zealand’s currency strengthened 0.1 percent to 77.81 U.S. cents. The so- called kiwi dollar traded at 60.67 yen from 60.61 yen on Dec. 2, when it touched 61.12 yen, the highest since Nov. 14.

Australia’s Inflation

Consumer prices in Australia rose 2.1 percent last month from a year earlier, compared with a 2.6 percent annual gain in October, according to an index compiled by TD Securities Inc. and the Melbourne Institute released in Sydney today.

Australia’s central bank aims to hold annual inflation in a 2 percent to 3 percent range.

“Odds have shortened for” a 25 basis points cut by the RBA tomorrow, Besa Deda, chief economist at St. George Bank Ltd. in Sydney, wrote in a research note today. “Soft patches in the domestic economy are yet to make a marked recovery.”

Australia’s benchmark rates will drop to 4 percent next year, Deda forecast.

A Credit Suisse Group AG index based on swaps shows an 87 percent chance Reserve Bank’s cash rate will be cut from 4.5 percent to 4.25 percent.

Higher rates in Australia and New Zealand, compared with as low as zero in the U.S. and Japan, attract investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

New Zealand’s official cash rate is 2.5 percent. The Reserve Bank of New Zealand holds a policy meeting on Dec. 8.

The nation’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to interest-rate expectations, was unchanged at 2.88 percent.

Australia’s government bonds advanced, with yields on the 10-year debt falling two basis points to 3.98 percent. (Bloomberg)

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Asian stocks (MXAP) rose as the euro and oil advanced after Italian Prime Minister Mario Monti introduced a proposal to cut his nation’s debt. The MSCI Asia Pacific Index increased 0.2 percent as of 1:11 p.m. in Tokyo, adding to the 8 percent surge last week. Standard & Poor’s 500 Index futures gained 0.8 percent. The euro added 0.2 percent to $1.3416, while the yen fell against most of its 16 major counterparts. Oil climbed for a second day to $101.48 a barrel. The Shanghai Stock Exchange Composite Index retreated 0.6 percent.

S&P 500 futures expiring in December climbed to 1,252.90. Treasuries fell, pushing the yield on the 10-year note up three basis points to 2.07 percent. Service industries in the U.S. probably expanded in November at the fastest pace in six months, a sign the economy is accelerating in the final months of 2011.

Uranium Exports

The Shanghai Composite (SHCOMP) has fallen for the past four weeks and tumbled 16 percent this year. A purchasing managers’ index of non-manufacturing industries for November fell to 49.7 from 57.7 the previous month, the China Federation of Logistics and Purchasing said on Dec. 3. A reading above 50 indicates expansion.

About the same number of stocks rose and fell in the MSCI Asia Pacific Index. Japan’s Nikkei 225 Stock Average climbed 0.6 percent and Australia’s S&P/ASX 200 jumped 1.1 percent.

Energy Resources of Australia Ltd., a uranium producer controlled by Rio Tinto Group, rallied 11 percent for the biggest advance in the S&P/ASX 200. (AS51) Deep Yellow Ltd. (DYL), which explores for uranium, jumped 6.9 percent. Australia, holder of the world’s biggest uranium reserves, cleared a political hurdle to supplying India with the nuclear fuel after the governing Labor Party voted yesterday to end an export ban.


Asian Growth

The euro extended its first weekly climb against the dollar in more than a month. A proposal to channel European Central Bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($268 billion) to fight the crisis.

Oil for January delivery rose as much as 0.8 percent to $101.73 a barrel. Iran said oil will breach $250 a barrel if nations threaten to ban its purchases. Iran pumped 5 percent of the world’s oil last year.

The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment declined. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 7 basis points to 195 basis points, Credit Agricole SA prices show. The benchmark is set for its lowest close since Nov. 8. (Bloomberg)

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apanese stocks rose, with the Nikkei 225 Stock Average paring its biggest monthly loss since August, as shipping companies and steelmakers rebounded.

Kawasaki Kisen Kaisha Ltd. (9107) and other shipping lines advanced, rising for a third day after the sector plunged by as much as 25 percent this month. JFE Holdings Inc. (5411) and Kobe Steel Ltd. (5406) both rebounded for a third day. Nikon Corp., a camera maker that depends on Europe for about a quarter of its sales, gained 1.5 percent on optimism the leaders in the region will boost efforts to end the debt crisis.

“Investors are likely to buy shares even on small news because stocks (TPX) have been sold too much globally on lingering debt issues in European countries,” said Seiichiro Iwamoto, who helps oversee about $35 billion in Tokyo at Mizuho Asset Management Co. “People in the market are swinging between joy and sorrow on even the smallest news from the region.”

The Nikkei 225 (NKY) gained 1.1 percent to 8,377.74 as of 12:36 a.m. in Tokyo. For the month, the gauge has lost 6.8 percent amid signs Europe’s crisis is spreading to the region’s major economies. The broader Topix gained 0.8 percent to 721.72 today.

The Standard & Poor’s 500 Index (SPXL1) gained 2.9 percent yesterday in New York after Thanksgiving retail sales climbed to a record amid speculation European leaders will do more to tame the debt crisis. U.S. retail sales during the holiday weekend increased 16 percent to $52.4 billion, the National Retail Federation said on Nov. 27, citing a BIGresearch survey.
Shippers, Steelmakers

Shipping lines and steelmakers gained the most among the 33 Topix industries groups today, rebounding after the sectors plunged by at least 35 percent this year.

Kawasaki Kisen, which sank by more than 60 percent this year, gained 4.6 percent to 136 yen. Shares gained even after the Nikkei newspaper reported the shipping line will likely post a net loss of 32 billion yen ($409 million) this fiscal year on sluggish demand from the U.S. and Europe.

Mitsui O.S.K. Lines Ltd., the nation’s No. 2 shipping line by revenue, rose 2.9 percent to 247 yen. The shares have fallen by about half this year.

JFE Holdings advanced 4.2 percent to 1,381 yen. Kobe Steel climbed 1.8 percent to 116 yen. The companies have dropped more than 40 percent this year.

Japanese stocks gained even after the jobless rate rose for the first time in three months, adding to evidence that the nation’s post-earthquake rebound is fading. The unemployment rate increased to 4.5 percent in October.
Exporters to Europe

Japanese exporters to Europe advanced today. Nikon gained 1.5 percent to 1,770 yen. Ricoh Co., a maker of cameras and office-equipment that depends on the region for more than 20 percent of its sales, rose 2 percent to 680 yen.

In Europe, German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.

“There are increasing expectations that some additional support for the European debt crisis will come out at the European summit meeting next month,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “The expectations won’t last long and the markets will likely react nervously to European news.” (Bloomberg)

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TIME (FV RM0.70- BUY) 9MFY11 Results Review: Almost on The Dot
Time dotCom’s (TDC) operating revenue was below expectations at 67% and 66% of
our and consensus full-year estimates, owing to the absence of global bandwidth sales.
However, higher private leased line and domestic bandwidth sales drove core EBITDA
margins to a record 34% in 3QFY11. With its minority shareholders recently approving
management’s corporate proposals, TDC is poised to become a regional wholesale
service provider in 1QFY12, which is a future catalyst for the stock. We are maintaining our BUY, at a revised FV of RM0.70 (excluding contributions from the entities to be acquired), which effectively provides an 8.5% upside from the current price level.

KFC (FV RM4.08-BUY) 9MFY11 Results Review: Not Much to Crow About
MEDIAC (FV RM1.47– BUY) 1HFY12 Results Review: Staying on Course
KIMLUN (FV RM2.15-BUY) 9MFY11 Results Review: Intact on All Fronts
PERWAJA (FV RM1.54-BUY) 9MFY11 Results Review: Awaiting Upstream Makeover
MRCB (FV RM2.50- TRADING BUY) 9MFY11 Results Review: Progressing a Tad
Slower
IJMPLNT (FV RM3.42-BUY) 6MFY12 Results Review: Stage Set For Double-Digit
Growth
SIME (FV RM9.64-NEUTRAL) 1QFY12 Results Review: Upping Fair Value to RM9.64
IJM (FV RM5.74-NEUTRAL) 1HFY12 Results Review: A Rather Surprising Letdown
SOP (FV RM6.51-BUY) 9MFY11 Results Review: More Blowout Results
KULIM (FV RM4.80-BUY) 9MFY11 Results Review: Maintains Winning Streak


Market Review
Still skittish. The FBM KLCI closed over 16 points lower ahead of the long weekend asinvestors took profit on blue chips after the recent gains. The headlines over the weekend are: (i) Khazanah highlighted that non-Bumiputra firms can acquire non-core assets divested by GLCs and (ii) ROC Oil is keen on more oil projects in Malaysia with its local partner, Dialog Group. On the results front, Sime Darby reported a 64% y-o-y jump in net profit, Kulim posted a 40% fall in 3Q earnings, MRCB's 3Q numbers surged 191% while KFCH's earnings fell 12%. We expect sentiment to remain skittish albeit the stronger close across Asian markets yesterday coupled with gains overnight in the US and Europe over better Thanksgiving weekend sales and hopes of a recovery in the Eurozone respectively should pare down the earlier losses today.(OSK Wealth Management Trading)

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