Feb. 26 (Bloomberg) — Asian stocks advanced, led by financial companies, after the world's largest bond insurers retained top credit ratings, easing concern that global economic growth will slow on new credit losses.
National Australia Bank Ltd. climbed after Standard & Poor's kept MBIA Inc. and Ambac Financial Group Inc.'s AAA debt ratings. Sun Hung Kai Properties Ltd. led gains in Hong Kong on speculation the city's record budget surplus will prompt the government to waive property taxes. Aeon Co. paced declines in Japan after Credit Suisse Group said worsening consumer sentiment will drag on retailers' earnings.
“It's a temporary boost for Asia,'' said Mushtaq Ibrahim, who manages about $1.4 billion at Amanah SSCM Asset Management Bhd. S&P's move “has prevented a snowballing effect that would have dragged down banks'' globally.
The MSCI Asia Pacific Index added 0.4 percent to 146.02 as of 7:20 p.m. in Tokyo, trimming earlier gains of as much as 1 percent. Advances today helped reduce the benchmark's 2008 loss to 7.4 percent.
Japan's Nikkei 225 Stock Average slipped 0.7 percent to 13,824.72, reversing an earlier advance of 1 percent. Australia's S&P/ASX 200 rose 0.8 percent, led by Woolworths Ltd., after the nation's biggest retailer reported increased profit.
Auckland International Airport Ltd. fell by a record in Wellington trading on speculation a Canadian pension fund's takeover offer will fail after a tax loophole was closed and the city's mayor rejected the proposal.
U.S. stocks staged their biggest rally this month yesterday, lifting the Standard & Poor's 500 Index by 1.4 percent.
National Australia Bank, the country's largest, climbed 3.4 percent to A$30.11. Macquarie Group Ltd., Australia's No. 1 securities firm, jumped 5.7 percent to A$58.64. HSBC Holdings Plc, Europe's largest bank by assets, added 2.8 percent to HK$119.70, the biggest advance since Feb. 14.
MBIA is no longer under review for a downgrade by S&P, indicating the bond insurer is a step further away from losing its AAA insurance credit rating. Ambac, which ranks second to MBIA among bond insurers, is still being reviewed for a possible downgrade, the ratings agency said.
“S&P's move doesn't fix the problem completely, but it does buy some time to find solutions,'' said Yoshinori Nagano, who helps oversee about $70 billion at Daiwa Asset Management Co. in Tokyo.
Real-estate stocks climbed in Japan on speculation developers will be able to finance projects as the credit squeeze eases. The Topix Real Estate Index, which plunged 21 percent in the past three months and was the worst performer among the broader index's 33 industry groups, jumped 1.7 percent today.
Mitsubishi Estate Co., Japan's biggest developer by market value, surged 4.1 percent to 2,685 yen. Mitsui Fudosan Co., the second-largest, added 2.8 percent to 2,210 yen.
Sun Hung Kai, Aeon
Sun Hung Kai, Hong Kong's No. 1 developer by market value, advanced 4.1 percent to HK$135.70, halting a four-day, 6.9 percent retreat. Cheung Kong (Holdings) Ltd., the second biggest, rose 2.1 percent to HK$114.40.
Hong Kong will probably report a record budget surplus of HK$113 billion ($14.5 billion) for the year ended March 31, according to the median estimate in a Bloomberg News survey of analysts. The government may waive property taxes for the full financial year, PricewaterhouseCoopers LLP predicted.
Financial Secretary John Tsang is due to deliver his maiden budget speech tomorrow.
Aeon, Japan's second-largest retailer, declined 3.6 percent to 1,344 yen, halting a three-day, 5.2 percent advance. Lawson Inc., Japan's No. 2 convenience store operator, retreated 5.3 percent to 3,970 yen.
“Some retailers are struggling under sluggish sales as consumers tighten their purse strings,'' Dairo Murata, an analyst at Credit Suisse, wrote in a note to clients. “Consumer spending is unlikely to improve in the short term.''
Also in Japan, KDDI Corp. slumped 5.5 percent to 615,000 yen after Nomura Holdings Inc. cut its rating on shares of Japan's No. 2 mobile-phone operator, to “buy'' from “strong buy.'' Power producers fell after Nomura said companies may not be able to pass on higher raw materials costs to consumers. Tokyo Electric Power Co., Asia's biggest utility, lost 1.5 percent to 2,695 yen.
Woolworths gained 4.2 percent to A$30.23, the highest close since Jan. 29. First-half profit rose 28 percent after the Australian retailer won market share, cut costs to supply its supermarkets and added more profitable groceries.
ABC Learning Centres Ltd. plunged 43 percent to A$2.14, the biggest slump by percentage on MSCI's Asian index, on concern the world's biggest publicly traded owner of child-care centers will struggle to repay debt. QBE Insurance Group Ltd. slumped 10 percent to A$25.75, the biggest decline since Sept. 20, 2001, after Australia's biggest property and casualty insurer reported net income that missed analyst estimates in a Bloomberg survey.
Auckland Airport fell 13 percent to NZ$2.45 after Mayor John Banks said his city, the largest holder, won't support Canada Pension Plan Investment Board's offer and the government removed a tax deduction the fund manager had planned to use to recapitalize its investment.
In South Korea, Posco advanced 4.1 percent to 535,000 won. Asia's third-largest steelmaker is “very likely'' to raise prices for its products as early as March, Hyundai Securities Co. said in a report.
“Regional steel prices are exploding, driven by a powerful mix of surging costs and a steel shortage,'' HSBC analysts including Daniel Kang wrote in a report. “We expect this shortage to continue into the second quarter, driving further price hikes as mills look to recover massive cost increases.''
To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net ; Chan Tien Hin in Kuala Lumpur thchan@bloomberg.net
Last Updated: February 26, 2008 05:24 EST
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