Asian Stocks Advance as Yen Weakens, ANZ Banking Cuts Dividend

Feb. 26 (Bloomberg) -- Asian stocks gained for a second day, led by automakers and finance companies, as the yen weakened against the dollar and Australia & New Zealand Banking Group cut dividends to preserve capital.

Honda Motor Co., which gets half its sales from North America, jumped 4.8 percent in Tokyo as the yen traded near the weakest level versus the dollar in three months. ANZ Banking rose 1.4 percent in Sydney after reducing its payout by about 25 percent. Telstra Corp., Australia’s No. 1 telephone company, lost 1.6 percent after reporting lower profit and its chief executive officer stepped down.

“As the economy worsens, the pressure on revenues and profits is becoming more and more intense,” said Prasad Patkar, who helps manage $647 million at Sydney-based Platypus Asset Management. “Banks are assuming the brace position for turbulence ahead and that is prudent. Some businesses are able to adjust their costs, but others will find it more difficult.”

The MSCI Asia Pacific Index gained 0.8 percent to 76.02 as of 9:59 a.m. in Tokyo, extending yesterday’s 1.4 percent increase. The gauge has lost 15 percent in 2009 as recessions in the world’s largest economies battered company earnings in Asia.

Japan’s Nikkei 225 Stock Average climbed 1.9 percent, while Australia’s S&P/ASX 200 Index rose 1 percent. South Korea’s Kospi Index jumped 3 percent, as KT Corp., the country’s largest phone and Internet company, won antitrust clearance to merge with affiliate KT Freetel Co.

Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, fell 6.7 percent in Sydney trading after selling shares at a discount. Advantest Corp., the world’s biggest maker of memory-chip testers, slumped 2.7 percent after the company forecast a loss and announced job cuts.

U.S. Homes

Futures on the Standard & Poor’s 500 Index gained 0.9 percent today. The gauge slid 1.1 percent as the National Association of Realtors said purchases of previously owned homes dropped 5.3 percent last month to an annual rate of 4.49 million from December, the fewest since 1997. Economists had estimated resales would rise.

In Singapore today, the trade ministry said the city’s economy shrank an annualized 16.4 percent last quarter from the previous three months, the most in at least 33 years.

Honda gained 4.8 percent to 2,510 yen as the weaker local currency boosted the value of repatriated overseas sales. Canon Inc., the world’s largest camera maker, rose 2.2 percent to 2,560 yen.

“The yen’s depreciation will continue to drive up exporters,” Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television.

Falling Valuations

The Japanese currency weakened against the dollar to as much as 97.46 today from 97.21 at the close of stock trading in Tokyo yesterday. The yen earlier reached 97.78, a level not seen since Nov. 14.

The MSCI Asia Pacific Index has lost 48 percent in the past year as losses on U.S. mortgage investments caused banks to rein in lending, hurting global growth prospects. Declines in that time have dragged the average valuation of companies on the MSCI gauge down by 7 percent to 13.5 times reported profit.

ANZ Banking, bracing for more bad debts as the economy slows, gained 1.4 percent to A$12.67. The company will cut its dividend by about a quarter and increase loss provisions. Earnings in the four months ended January fell 11 percent, the bank said today.

Westpac Banking Corp., Australia’s largest bank by market value, jumped 1.7 percent to A$16.45. National Australia Bank Ltd., the country’s biggest by assets, rose 2 percent to A$17.67.

Job Cuts

Telstra lost 1.6 percent to A$3.71 after reporting its first half-year profit decline in two years as sales of traditional phone services fell. Chief Executive Officer Sol Trujillo will step down on June 30, Telstra said, ending months of speculation by the Australian media about his departure.

Fortescue dropped 6.7 percent to A$2.64 after this week selling 225 million new shares to China’s Hunan Valin Iron & Steel Group at A$2.48 each. The stock closed at A$2.83 on Feb. 20, the last trading day before being halted Feb. 23.

Advantest slumped 2.7 percent to 1,387 yen. The company said yesterday its net loss will probably amount to 78 billion yen ($800 million) in the year to March 31 and that it plans to cut a quarter of its workforce by March.