Asian stocks ride high

GLOBAL MARKETS

Asian stocks climbed to a record for a third day, led by commodity-related companies after prices of metals and oil rose.

BHP Billiton, the world's largest mining company, climbed. Sumitomo Metal Mining, Japan's biggest gold producer, jumped the most in a year.

"Take a look at the sheer demand for resources from places like China, and you have to think you can't really lose if you take a long-term view,'' said Michael Birch, who manages about $120 million in equities at Wallace Funds Management in Sydney.

Baoshan Iron & Steel led China's Shanghai and Shenzhen 300 Index to a record high on speculation Chinese steelmakers were undervalued given the outlook for earnings. Nikko Cordial Corp, Japan's third-biggest securities company, surged 13 per cent after people familiar with the situation said Citigroup may raise its stake.

The Morgan Stanley Capital International Asia-Pacific Index rose 0.1 per cent to 148.22 at 5:08 pm in Tokyo, heading for a record close. Six of the measure's 10 industry groups advanced, with materials gaining the most. Japan's Topix climbed 0.1 per cent, its the longest winning streak since December, while the Nikkei 225 Stock Average gained 0.2 per cent.

Taiwan Semiconductor Manufacturing led the Taiex index 1.2 per cent higher on Taiwan's first trading session after a seven-day holiday for the Lunar New Year. China's markets were closed last week. Other markets fell, except in South Korea and Australia, whose S&P/ASX 200 Index also closed at a record high.

Mizuho Financial Group Inc. led Japan's banks lower on concern profit growth from lending will be limited after the Bank of Japan said it won't raise interest rates again soon.

Melbourne-based BHP Billiton added 1.3 per cent to A$29.32. Sumitomo Metal Mining jumped 6.5 per cent to 2,200 yen, its biggest advance since February 2006. Inpex Holdings, Japan's largest oil explorer, rose 2.3 per cent to 1.02 million yen.

A measure of six metals traded on the London Metal Exchange including copper and nickel jumped 3.3 per cent on February 23. Oil added 0.3 per cent to its highest close since December 22, and recently traded 0.5 per cent higher at $61.43.

Gold in New York climbed 0.5 per cent to $686.70 an ounce, the highest since May 18, as rising tension surrounding Iran's nuclear programme spurred demand from investors seeking a haven. The precious metal is expected to gain this week, its eighth straight weekly advance, according to 20 of the 27 traders, investors and analysts surveyed by Bloomberg News.

Rio Tinto, the world's second-biggest mining company by market value, climbed 3.2 per cent to A$80.11. Newcrest Mining, Australia's biggest gold miner, gained 2.2 per cent, to A$22.55.

Baoshan Steel, the listed unit of China's biggest steelmaker, jumped 8 percent to 10.03 yuan. Wuhan Iron & Steel, the listed unit of the third-biggest steelmaker by output, gained 6.5 per cent to 9.37 yuan.

Some investors judged steelmakers were undervalued. Baoshan Steel traded at 15 times earnings today, compared with a valuation of 40 times for the benchmark index.

"Steel producers have room to gain further because they are relatively cheap compared with other industries in the market,'' said Wu Jianfei, who manages the equivalent of $438 million with CCB Principal Asset Management Co. in Beijing.

Anhui Tongdu Copper Stock Co., China's second-largest copper producer by output, surged the 10 per cent daily limit to 10.07 yuan. Jiangxi Copper Co. the largest listed producer of the metal, jumped 10 per cent to 17.67 yuan.

Copper futures in Shanghai rose by the daily limit of 4 per cent to the highest in seven weeks as trading resumed after the week-long holiday.

Nikko Cordial climbed 13 percent to 1,364 yen. That was the largest percentage gain among 1,895 stocks worldwide in the Morgan Stanley Capital International World Index.

Citigroup, the biggest US bank, may increase its stake to shore up Nikko Cordial following an accounting scandal, three people with knowledge of the discussions said.

Citigroup is in talks to raise its shareholding to at least 33.4 per cent, a level that would give it a veto over decisions by Nikko Cordial's management. Citigroup currently owns 4.9 per cent of Nikko and the two companies are partners in a Tokyo-based investment-banking joint venture.

Japanese securities regulators said Dec. 18 that Nikko Cordial overstated earnings for the year ended March 2005, forcing out six executives and prompting Standard & Poor's to reduce its credit rating to the lowest investment grade. Nikko, which hasn't contested the regulatory findings, faces a delisting from the Tokyo Stock Exchange.

Mizuho Financial, Japan's second-largest bank, slid 1.7 per cent to 860,000 yen. Mitsubishi UFJ Financial Group, the biggest, lost 0.7 percent to 1.51 million yen.

Japanese lenders declined on concern earnings will be limited by the Bank of Japan's statement that it will not raise interest rates again soon, after lifting the benchmark rate to 0.5 per cent last week.

"Investors bought bank stocks right after the rate increase but later realised there would be little improvement to profitability from higher margins,'' said Katsunori Hirai, at Tokio Marine Asset Management in Tokyo.

Taiwan's Taiex rose to the highest since Jan. 25 after investors returned from vacation. During the period in which the island's stock market was closed, key indexes in Hong Kong, Japan and South Korea jumped more than 2 percent.

"Investors are playing catch-up in Taiwan because neighbouring markets have advanced while they were on holiday,'' said Yin Nai-yun, who oversees $172 million at Prudential Securities Investment Trust Enterprise in Taipei.

Taiwan Semiconductor, the world's biggest supplier of made- to-order chips, rose 2.4 percent to NT$68.90. Hon Hai Precision Industry, Taiwan's largest electronics company, advanced 2 per cent to NT$228.50.

China Mobile, the world's largest mobile-phone operator by users, slipped 2.7 percent to HK$77.15 in Hong Kong. The stock soared 18 per cent this year through February 23, outperforming the 3.7 per cent gain in the benchmark. The shares closed at HK$79.35 on February 22, its highest on record, according to Bloomberg data.

"There's some profit-taking going on after the stock surged to a record high last week,'' said Francis Lun, a general manager at Fulbright Securities Ltd. in Hong Kong.