Asia scrips get M&A push

GLOBAL MARKETS/ STOCK REPORT

Asian stocks rose to a record after Orica received an $8.3 billion takeover offer and Tokyu Land Corp's earnings exceeded the company's forecast.

"Merger and acquisition activity is helping Asian stocks set new valuation benchmarks,'' said Mark Tan, who helps manage about $3 billion in regional equities at UOB Asset Management in Singapore.

The Morgan Stanley Capital International Asia-Pacific Index added 0.9 per cent to 149.15 as of 6:10 pm in Tokyo, erasing all its losses from a global sell-off that began on February 27.

Benchmarks in Australia, China and South Korea all closed at new highs, while Japan's Nikkei 225 Stock Average added 0.8 per cent to 17,667.33. Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand fell. Orica surged 20 per cent to A$33.50.

It rejected a takeover bid of A$9.95 billion ($8.3 billion) led by US buyout firms Bain Capital Partners and Blackstone Capital Partners as too low. The group offered A$32 in cash a share, 15 per cent higher than yesterday's closing price, Orica said in a statement today.

Taiwan's Advanced Semiconductor Engineering, the world's largest chip packaging and testing company, jumped 3.2 per cent to NT$42.30 after US buyout firm Carlyle group withdrew a takeover offer.

US
US stocks snapped a weeklong rally after profit reports from International Business Machines Corp and Yahoo! disappointed some investors, reviving concern that earnings growth is slowing.

The Dow average slipped 23.98, or 0.2 per cent, to 12,749.06 as of 9:48 am in New York. The S&P 500 lost 3.95, or 0.3 per cent, to 1467.53. The Nasdaq Composite Index sank 12.62, or 0.5 per cent, to 2504.33.

Better-than-expected economic reports and earnings from Coca-Cola Co and Johnson & Johnson yesterday pushed the Dow industrials to within 14 points of a record close.

Europe
European stocks fell for the first time in four days after earnings from US companies including Yahoo! and International Business Machines Corp disappointed investors.

The Dow Jones Stoxx 600 Index dropped 0.6 per cent to 385.62 at 2:34 pm in London, falling from its highest since October 2000. The Stoxx 50 slipped 0.4 per cent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, lost 0.7 per cent.

National benchmarks declined in 14 of the 18 western European markets. The UK's FTSE fell 0.7 per cent. France's CAC 40 lost 0.4 per cent and Germany's DAX slid 1.2 per cent.

Nokia, which announced a partnership with Yahoo in January, dropped 1 per cent to 17.52 euros.

Atos, the official supplier of computer services for the Beijing Olympics, lost 1 per cent to 53.41 euros after Citigroup lowered its recommendation to "sell'' from "hold''.

Societe Generale rose 3.5 per cent to a record 144.15 euros.

"Societe Generale is rising on a rumour that UniCredit would bid for the company,'' said Frederic Boissel, a trader at Fimat in Paris. The shares rose yesterday after newspaper Finanza & Mercati reported that UniCredit was considering a bid.