Monday, February 25, 2008

Asian Stocks Rise After Bond Insurers Keep Ratings; Banks Gain

By Chen Shiyin and Patrick Rial

Feb. 26 (Bloomberg) -- Asian stocks rose to their highest in three weeks after the world's largest bond insurers retained top credit ratings, easing concern that global economic growth will slow on new credit losses.

Mitsubishi UFJ Financial Group Inc. and National Australia Bank Ltd. gained after Standard & Poor's kept MBIA Inc. and Ambac Financial Group Inc.'s AAA debt ratings. Posco led an advance by steelmakers after HSBC Holdings Plc said prices of the alloy will continue to climb. Woolworths Ltd., Australia's biggest retailer, rose to a one-month high after reporting increased profit.

``S&P's reiteration of AAA ratings on MBIA and Ambac will lead to buying of finance-related shares,'' Mitsuo Shimizu, an analyst at Cosmo Securities Co. in Tokyo, said in an interview with Bloomberg Television.

The MSCI Asia Pacific Index added 0.9 percent to 146.77 as of 11:23 a.m. in Tokyo, poised for its highest close since Feb. 5. Gains today helped trim the benchmark's 2008 loss to 7 percent.

Japan's Nikkei 225 Stock Average climbed 0.5 percent to 13,983.51. Benchmarks advanced in all markets open for trading, except New Zealand.

U.S. stocks climbed yesterday, helping the Standard & Poor's 500 Index to its biggest rally this month.

Mitsubishi UFJ, Japan's largest publicly traded bank, advanced 2 percent to 994 yen. Mizuho Financial Group Inc., the third-largest by market value, jumped 2.9 percent to 465,000 yen. National Australia, the country's largest, climbed 2.5 percent to A$29.85.

MBIA, Ambac

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.

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 19 percent in the past three months and was the worst performer among the broader index's 33 industry groups, jumped 3.9 percent today.

Mitsubishi Estate Co., Japan's biggest developer by market value, surged 6 percent to 2,735 yen. Mitsui Fudosan Co., the second-largest, added 5.1 percent to 2,260 yen.

In South Korea, Posco advanced 3.7 percent to 533,000 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.

`Exploding' Steel Prices

``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.''

China Steel Corp., Taiwan's biggest steelmaker, added 3.6 percent to NT$47.25. JFE Holdings Inc., the world's third-largest steelmaker, advanced 1.5 percent to 4,800 yen.

Woolworths gained 4 percent to A$30.16, poised for the highest close since Jan. 29. First-half profit rose 28 percent to A$891.3 million ($826 million) after the Australian retailer won market share, cut costs to supply its supermarkets and added more profitable groceries.

Also in Australia, ABC Learning Centres Ltd. plunged 62 percent to A$1.435, the biggest slump by percentage on MSCI's Asian index. First-half profit at the world's biggest publicly traded owner of child-care centers tumbled 42 percent to A$37.1 million, fueling concerns it may struggle to repay debt.

QBE Insurance Group Ltd., Australia's biggest property and casualty insurer, slumped 11 percent to A$25.46, poised for the biggest decline since Dec. 8, 2006. Net income rose 13 percent last year to A$1.93 billion, missing the A$2.02 billion median estimate of 12 analysts surveyed by Bloomberg.

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