Asian Electronics Stocks Rise on Display Demand; Brokers Fall

June 29 (Bloomberg) — Asian electronics stocks climbed after economic reports in the region bolstered confidence global demand is recovering and LG Display Co. reported strong demand. Daiwa Securities Group Inc. led financial shares lower after announcing a share sale.

JTEKT Corp., a maker of power steering systems, rose 3.5 percent after Japanese industrial production rose for a third month and New Zealand exports increased in May. LG Display, the world’s second-largest maker of liquid-crystal displays, rose 2.8 percent in Seoul after saying it won’t be able to meet all orders placed by customers. Daiwa, Japan’s No. 2 brokerage, slumped 12 percent after saying it plans to raise about 240 billion yen ($2.5 billion) in a share sale.

The MSCI Asia Pacific Index swung between gains and losses, and was down 0.1 percent to 103.56 at 11:50 a.m. in Tokyo. About the same number of shares rose as fell. The gauge has rallied 47 percent from a five-year low reached in March.

“The volatility has come out the market,” said Chris Hall, who helps manage $2.4 billion as Associate Director of Argo Investments Ltd. in Adelaide. “There are still question marks, but the global economic data is definitely beginning to improve, and things appear to be stabilizing.”

Japan’s Nikkei 225 Stock Average added 0.4 percent to 9,914.05. The nation’s industrial production rose 5.9 percent in May from a month earlier, the Trade Ministry said today, matching the fastest pace of expansion since 1953.

U.S. stocks slipped last week as the Standard & Poor’s 500 Index fell 0.3 percent. The savings rate among Americans rose to a 15-year high of 6.9 percent in May, the Commerce Department said on June 26, raising concern demand for electronics and autos won’t rebound.

LG Display

“The higher savings rate in the U.S. suggests a recovery in consumer spending there will be slow, which is a headwind for companies depending on American demand,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo.

The MSCI Asia gauge has jumped 16 percent so far in 2009, set for the best first half since 1999. That compares with a 1.7 percent advance for the S&P 500, while Europe’s Stoxx 600 gauge rose 3.1 percent.

JTEKT, an affiliate of Toyota Motor Corp., added 3.5 percent to 985 yen. Mitsubishi Heavy Industries Ltd., Japan’s largest maker of heavy equipment, rose 2.8 percent to 408 yen. The company will double the number of workers at its nuclear power business in the U.S. to prepare for expected demand, the Nikkei newspaper reported.

Industrial Production

Japan’s factory output rose 5.9 percent in May from the previous month, the Trade Ministry said today, matching April’s pace of expansion, which was the fastest since 1953.

Pike River Coal Co., a New Zealand coal miner, added 0.8 percent to NZ$1.20. The nation’s exports increased 5.8 percent from a year earlier, Statistics New Zealand reported today.

LG Display rose 2.8 percent to 32,900 won. Samsung Electronics Co., the world’s largest television maker, gained 1 percent to 602,000 won. Furukawa Electric Co., a maker of high- voltage electric wires, jumped 3.4 percent to 454 yen after Goldman Sachs Group Inc. lifted the shares to “buy” from “neutral,” citing growth in the electricity market.

“Orders are surging and we’re still unable to meet all the demand,” Koo Do Hoi, vice president of Seoul-based LG Display, said June 26. Koo said the company is experiencing a shortage of more than 10 percent in panel supply to customers.

Share Sale

Daiwa plunged 12 percent to 586 yen, the steepest drop since April 2000. On June 26 the company announced plans to issue new shares for the first time in two decades. The shares had climbed as much as 114 percent from the March low. Rival Nomura Holdings Inc., Japan’s largest brokerage, lost 0.8 percent to 824 yen. Okasan Securities Group Inc. fell 2 percent to 479 yen.

“Investors are skeptical Daiwa’s share sale will offset the negative impact of dilution and boost the brokerage’s earnings under these difficult conditions,” said Masaru Hamasaki , a Tokyo-based senior strategist at Toyota Asset Management Co., which oversees $15 billion.

Daewoo Engineering & Construction Co. soared 12 percent to 14,400 won. Kumho Asiana Group will consult advisers and creditors to plan the sale of as much as 72 percent of South Korea’s largest builder, Kumho said yesterday in an e-mailed statement. The stake, with a market value of 3 trillion won ($2.34 billion) as of June 26, was purchased in 2006 for 6.43 trillion won.

Elpida Memory Inc. rallied 5.9 percent to 1,077 yen. Public and private aid for Japan’s largest computer memory maker may total about 200 billion yen over three years, Nikkei English News reported. The government-backed Development Bank of Japan will acquire Elpida preferred shares under a recapitalization plan. A public-private fund that supports innovation will also consider providing funds to help the company, Nikkei said.

from: bloomberg.com