Japanese Stocks Rise on Spain Bank Bailout, China Imports - Bloomberg Japanese Stocks Rise on Spain Bank Bailout, China Imports - Bloomberg

Monday, June 11, 2012

Japanese Stocks Rise on Spain Bank Bailout, China Imports - Bloomberg

Japanese Stocks Rise on Spain Bank Bailout, China Imports - Bloomberg

June 11 (Bloomberg) -- Japanese stocks rose, with the benchmark Nikkei 225 Stock Average (NKY) headed for the biggest gain since April, on speculation a bailout for Spanish banks will ease Europe’s debt crisis and after China’s trade grew faster than expected.

Canon Inc. (7751), a camera maker that gets 31 percent of its revenue in Europe, advanced 2.9 percent. Fanuc Corp. (6954), a manufacturer of robotics controls for Chinese factories, rose 1.9 percent. Sharp Corp. (6753), Japan’s largest maker of liquid- crystal displays, gained 6.6 percent after saying Foxconn Technology Group will start buying its panels earlier than expected as part of a revival plan.

The Nikkei 225 Stock Average added 2 percent to 8,626.67 at 12:34 p.m. in Tokyo, poised for the biggest increase since April 18. The gauge rose 0.2 percent last week, snapping a nine-week loss. The broader Topix (TPX) Index gained 1.8 percent to 730.49, with all 33 of its industry groups climbing.

“The bailout will keep companies that borrow from Spanish banks from going down all together,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $70 billion. “In China, overseas demand is stronger than expected, while domestic demand continues to slow. That makes it easy to do more monetary easing because it has a direct impact on domestic demand.”

The Topix fell 16 percent from this year’s high on March 27 amid concern the European crisis is deepening and as growth in China slows. Shares on the measure are valued at 0.86 times book value. A number below one means a company can be bought for less than the value of its assets.

‘Market Oblivious’

“The market has been oblivious to valuations because having equities itself is considered risky amid uncertain external factors,” said Kuninobu Takeuchi, Tokyo-based executive portfolio manager at DIAM Co., which manages about $126 billion. “Once people step back and retain a peace of mind, they will look for buying opportunities.”

The Standard & Poor’s 500 Index (SPXL1) advanced 0.8 percent on June 8. Futures on the gauge climbed 1.1 percent today after Spain over the weekend asked euro-zone governments for as much as 100 billion euros ($125 billion) to rescue its banking system. Spain became the fourth nation to seek a bailout after Greece, Ireland and Portugal. Greek voters on June 17 will decide whether to observe requirements for another rescue.

Spain Rescue

“It’s crucial for Spain’s financial system to stabilize because its economy is much bigger than Greece,” Takeuchi at Diam said. “The bailout is bringing an issue to the end. It’s positive for equities.”

Exporters to Europe and banks advanced. Canon added 2.9 percent to 3,220 yen. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, advanced 1.7 percent to 353 yen.

Companies linked to China gained after the government yesterday reported imports rose 12.7 percent in May and exports advanced 15.3 percent, topping estimates.

Another report showed inflation in China rose the least in two years last month and industrial output and retail sales missed estimates. The data adds pressure for more stimulus after the People’s Bank of China on June 7 reduced key interest rates for the first time since 2008 to bolster slowing growth.

Fanuc gained 1.9 percent to 13,680 yen. TDK Corp. (6762), a maker of electronics components that gets 30 percent of its sales in China, rose 5.2 percent to 3,655 yen.

The Nikkei 225 Volatility Index (VNKY) declined 6.4 percent to 26.74, indicating traders expect a swing of about 8 percent on the benchmark gauge over the next 30 days. Trading volume was 10 percent below the 30-day average.

Sharp, Sumco

Sharp advanced 6.6 percent to 418 yen after saying Foxconn’s flagship Hon Hai Precision Industry Co. will start buying from its TV panel unit next quarter, three months earlier than planned. The loss-making operation, in which Foxconn is investing, will be taken off Sharp’s balance sheet next month.

Sumco Corp. (3436), a maker of silicon wafers for semiconductors, gained 12 percent to 774 yen. It reported operating profit of 2.9 billion yen ($36 million) for the three months ended April 30, beating the analysts’ estimates of 1 billion yen.

Olympus Corp. (7733) lead declines on the Nikkei 225, dropping 5 percent to 1,232 yen after the optics maker said it may sell shares to raise capital.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

Military: Syria chemical stocks threaten Israel - The Guardian

JERUSALEM (AP) — Israel's deputy military chief is warning that Syria has the biggest chemical weapons stocks in the world and missiles and rockets that can reach any point in Israel.

Maj. Gen. Yair Naveh also said if Syria had the chance, it would "treat us the same way it treats its own people."

Israel radio stations carried Naveh's remarks on Monday. He made them the night before at a ceremony in Jerusalem commemorating fallen soldiers.

Syrian activists estimate more than 13,000 people have died since the uprising in Syria erupted 15 months ago.

Israel has been watching the carnage in neighboring Syria with increasing concern.

The two countries have fought major wars and Syria backs violent anti-Israel groups. Multiple attempts to reach a peace deal have failed.

Global stocks soar on Spanish bailout plan - Sydney Morning Herald

Shares, commodities and the battered euro jumped on Monday after eurozone finance ministers agreed to lend Spain up to $125 billion to shore up its struggling banks, relieving markets that had feared for the country's fiscal collapse.

The relief may be short lived though as investors look forward to Greek national elections on June 17 that could lay the path for Athens to leave the bloc and precipitate a deeper crisis over the future of the euro.

The euro rose nearly 1 per cent to $US1.26694 on Monday, its highest level since May 23. The Australian dollar, closely linked to risk appetite, gained as much as 0.9 per cent to $US1.0005, its highest rate since May 15.

Brent and US crude futures both rose more than $US2 and London copper futures pushed more than 2 per cent higher to $7,455 a tonne.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 per cent. Its rise last week followed four weeks in a row of losses.

Japan's Nikkei average added 2 per cent, after sagging 2.1 per cent on Friday. Still, it eked out its first gain last week for nine weeks.

The strong Asian open was preceded by US stock index futures rallying more than 1 per cent on Sunday, suggesting Wall Street will extend the previous week's advance, which was the S&P's best of 2012.

U.S. Treasury bond futures were down sharply in Asia on Monday, reflecting the switch out of so-called safe haven assets to riskier ones. The 30-year contract was off 1-11/32 at 147 26/32.

The 17-nation euro currency area agreed to lend Madrid up to 100 billion euros ($125 billion) for its bank rescue fund, more than an initial audit suggested it might need.

The European Union action is going to be a temporary success because the Spanish crisis is mostly centred around its banks, said Richard Hastings, macro and consumer strategist at Global Hunter Securities.

"The immediate effect on financial markets should be beneficial. Equity markets especially respond well to short-term improvements, while bond markets, especially higher-quality debt, might continue to send out signals in the form of very high prices and low yields that the trouble is not over," Hastings said.

The rescue for Spain's banks follows bailouts for Greece, Ireland and Portugal since 2010, and comes a week before a crucial election in Greece that could determine whether Athens will stay with the euro bloc.

Analysts expect investors' appetite to buy stocks, commodities and other riskier assets to remain limited by the euro zone's broader problems. Its challenge of reducing high sovereign debts and pursuing fiscal austerity, while achieving growth, will not be resolved anytime soon.

"The next phase of the Spain situation comes in six to nine more months when it becomes clear that Spain's economy has not improved, thus pointing to a wider realm of distress," Hastings said.

"That is indeed the primary concern for the entire European situation: that the relationship between banking, credit and growth remains fragmented and impaired."

Analysts said Monday's market rebound was probably more to do with short covering than a return to full risk taking, especially in the euro, given record positions built up betting on a decline in its value.

Commodity Futures Trading Commission data showed on Friday that net euro short positions increased to 214,418 contracts in the latest week from 203,415 in the previous week.

"Aid to Spanish banks suggests European policymakers want to prevent euro zone problems from causing further volatility in global financial markets and threatening the world economy, and this provides a sense of relief for investors," said Takao Hattori, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

"But uncertainties remain with how funds are provided to Spanish banks, as well as the outcome of Greece's election and the situation in peripherals such as Italy. I see the recovery in currencies, especially the euro, largely as an unwinding of huge short positions," he said.

EU's Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in an interview a day after the Spanish loan agreement that while Spain's banking sector needed to be reformed as part of the deal, no new conditions would be put on the wider economy.

No precise amount was set because Spain said it needed time for an independent assessment of the capital needs of its banking sector, which is due to be delivered in less than two weeks.

Improvement in general market sentiment eased the cost of insuring against corporate and sovereign defaults in Asia, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by 5 basis points.


STOCKS NEWS THAILAND-Ch Karnchang up on earnings outlook - Reuters

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Vietnam Stocks: Saovang Rubber, Southern Rubber, DIC Investment - Bloomberg

Shares of the following companies had unusual moves in Vietnam trading. Stock symbols are in parentheses and prices are as of the 11:30 a.m. break in Ho Chi Minh City. The VN Index (VNINDEX), the benchmark measure of the Ho Chi Minh City Stock Exchange, rose 0.2 percent to 433.85.

Rubber Stocks: Saovang Rubber Joint-Stock Co. (SRC) advanced 4.6 percent to 18,200 dong, bound for its highest price since May 21. Southern Rubber Industry Joint-Stock Co. (CSM VN) increased 4.1 percent to 27,800 dong, poised for the highest level since May 15. Danang Rubber Joint-Stock Co. (DRC) gained 2.1 percent to 28,600 dong.

Rubber climbed from a 31-month low after data showed car sales in China, the world’s biggest consumer, expanded more than analysts estimated in May, easing concern demand may weaken for the commodity used in tires.

DIC Investment & Trading Joint-Stock Co. (DIC) , which offers investment services for construction projects, rose 2.4 percent to 12,700 dong, headed for a one-month high. It will pay 2011 dividend of 1,000 dong a share on July 18, according to a statement on the exchange’s website.

To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

Tokyo stocks soar 1.81% after Spanish bank bailout - Japan Today

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Tokyo stocks soared 1.81% at the open Monday after the 17-nation eurozone agreed to lend Spain up to 100 billion euros ($125 billion) to rescue its battered banking system. The Nikkei 225 index at the Tokyo Stock Exchange, which gave up 2.09% on Friday in ...

China Stocks May Find Traction On Monday - NASDAQ

(RTTNews.com) - The China stock market has closed lower now in three straight trading days, giving away more than 30 points or 1.4 percent en route to a 10-week closing low. The Shanghai Composite Index settled just above the 2,280-point plateau, and now analysts are finally predicting a modest recovery at the opening of trade on Monday.

The global forecast for the Asian markets is cautiously optimistic on bargain hunting following heavy damage through much of last week. Positive economic data from China over the weekend adds to the positive sentiment, with better than expected numbers for exports, trade balance, inflation, retail sales and industrial output. In addition word comes from Europe that Spain will accept a bailout of $125 billion for its ailing banking sector, which investors hope will bring stability to the embattled Eurozone.

The STI finished modestly lower on Friday as losses from the financial sector were mitigated by support from the property stocks.

For the day, the index shed 11.68 points or 0.51 percent to finish at 2,281.45 after trading between 2,276.71 and 2,306.88. The Shenzhen Composite Index dropped 0.3 percent to end at 928.86.

Among the actives, China Minsheng Bank lost 3.5 percent, Industrial Bank fell 3.1 percent and China Merchants Bank retreated 3.1 percent, while Shanghai Xinmei surged 8.0 percent, Vanfund Real Estate spiked 4.4 percent and Beijing Vantone climbed 2.6 percent.

The lead from Wall Street is firmly positive as stocks showed a significant turnaround over the course of the trading day on Friday after coming under pressure in early trading as traders expressed renewed optimism about the financial situation in Europe.

The early weakness was partly due to waning optimism about the possibility of further stimulus from the Federal Reserve following Fed Chairman Ben Bernanke's testimony before the Joint Economic Committee on Thursday. While Bernanke said that Fed "remains prepared to take action" if the economic situation worsens, he made no explicit reference to further easing measures.

Disappointing trade data from Germany also contributed to the initial downward move, with the Federal Statistical Office reporting a 4.8 percent drop in imports in April.

The subsequent turnaround by the markets was partly due to optimism about the outcome of a weekend meeting of European financial officials, with rumors correctly suggesting that Spain could be in line for a bailout.

Some traders also likely used the early weakness as an opportunity to pick up stocks at reduced levels, doing some bargain hunting after the recent pullback.

In U.S. economic news, the Commerce Department reported that the U.S. trade deficit narrowed to $50.1 billion in April from a revised $52.6 billion in March. Economists had expected the deficit to narrow to $49.3 billion from the $51.8 billion originally reported for the previous month. The narrower trade deficit for the month came as the value of U.S. imports fell at a faster rate than the value of U.S. exports.

A separate report from the Commerce Department showed a slightly bigger than expected increase in wholesale inventories in April along with a notable increase in wholesale sales.

The major averages bounced off their early lows and climbed firmly into positive territory as the day progressed as the Dow rose 93.24 points or 0.8 percent to finish at 12,554.20, while the NASDAQ advanced 27.40 points or 1 percent to end at 2,858.42 and the S&P 500 climbed 10.67 points or 0.8 percent to 1,325.66. For the week, the Dow jumped 3.6 percent, while the NASDAQ and the S&P surged up by 3 percent and 2.9 percent, respectively.

In economic news, China saw a merchandise trade surplus of $16.70 billion in May, the customs agency said on Sunday, remaining in the black for the third consecutive month. That was well above forecasts for a surplus of $16.25 billion following the $18.43 billion surplus in April.

Exports surged 15.3 percent on year to $181.1 billion, blowing past expectations for an increase of 7.1 percent following the 4.9 percent gain in the previous month. Imports jumped 12.7 percent to $162.4 versus forecasts for a gain of 5.5 percent after collecting 0.3 percent a month earlier.

Also, China's consumer price index for China rose by 3 percent year-over-year in May compared to a 3.4 rate in the previous month, the Chinese National Statistical Bureau said over the weekend, versus forecasts for 3.2 percent. The decline reflected the thawing in food price inflation to 6.4 percent, while non-food prices also slowed to 1.4 percent.

Meanwhile, producer prices declined 1.4 percent year-over-year compared to the 0.7 percent drop in April and the 1.1 percent decline expected by economists.

Retail sales rose 13.8 percent in nominal terms and by 11 percent in real terms. In April, the nominal retail sales growth was 14.1 percent. At the same time, private fixed asset investments for the first five months of the year rose 26.7 percent on year in nominal terms.

Industrial output rose 9.6 percent year-over-year in May, more than the 9.3 percent increase in April.

For comments and feedback: contact editorial@rttnews.com


Financial flexibility found for picks - Pittsburgh Post-Gazette

The Pirates created enough wiggle room in their draft class that they don't have to adhere to the $2.9 million slot value for first-round pick Mark Appel, general manager Neal Huntington said.

"As with every negotiation, the slot is a starting point," Huntington said. "It is not a steadfast number."

They could use the financial flexibility not only with Appel but other players drafted outside the top 10 rounds, Huntington said.

"We've created the money to use and that's our intent," he said. "We'll just see how it plays out over the course of the negotiations.

"Every time you go over slot in the first 10 rounds, you've got to make up for the money somewhere else. Every time you come in under slot, you've got money you can play with somewhere else in the draft."

The Pirates have $6.56 million to spend on bonuses for players drafted in the top 10 rounds, as well as on the overage of bonuses that exceed $100,000 in later rounds.

"We've created some flexibility with the three [college] seniors that we took seven, nine and 10," Huntington said. "We've also selected some high school players whose signability may change after the draft as compared to before the draft."

The Houston Astros signed top pick Carlos Correa for $4.8 million, according to Baseball America, well under the $7.2 million assigned value. Kyle Zimmer, the No. 5 pick, signed with the Kansas City Royals for a reported $3 million, $500,000 under slot.

The Pirates signed second-round pick Wyatt Mathisen, a Texas high school catcher, for $746,300, according to Baseball America.

The bonus equals full value for his slot.

The Pirates stopped Jeff Karstens' rehabilitation stint in the minors, Huntington said, and he will start another one as he works his way through a sore hip flexor.

Karstens, who is on the 15-day disabled list because of inflammation in his right shoulder, left a rehabilitation start Thursday in the fifth inning after feeling tightness in his right groin, but further tests indicated a problem with the hip.

"Had he gotten through that start, he's back on our major league team," Huntington said. "We're just hoping it's a few days."

Because of the new injury, Karstens will have a fresh 30 days of rehabilitation in the minors without having to come off the disabled list.

Huntington said the Pirates could add a player to the roster to use as a designated hitter in American League parks this week, but were not set on doing so.

"We're open to maybe running somebody in but we don't feel like it's an absolute have-to at this time," he said.

Jeff Clement has hit well for Class AAA Indianapolis this season and could be a candidate if the Pirates opt to add a player. He was hitting .301 with seven home runs and 17 doubles, including .342 in his past 10 games, entering Sunday.

"Jeff's healthy, first and foremost," Huntington said. "His legs are back underneath him again. When he gets his legs underneath him he can drive the ball to any part of the ballpark."

Class AA Altoona outfielder Robbie Grossman has not played since June 2 because of what Huntington called "an issue internally."

Grossman is hitting .217 with a .315 on-base percentage and .345 slugging percentage.

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