Asian Stocks Rally for Sixth Week as Recession Con

April 18 (Bloomberg) -- Asian stocks climbed for a sixth week, the longest streak of gains in more than two years, on increasing confidence the worst of the global recession is over.

China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, surged 21 percent on rising Chinese exports and shipping rates. PT Bumi Resources, Asia’s largest exporter of power-station coal, jumped 21 percent in Jakarta as elections strengthened the hold Indonesia’s president has over parliament. JFE Holdings Inc., Japan’s No. 2 steelmaker, soared 22 percent on speculation it won’t make large price cuts and as the government unveiled a record stimulus package.

“We’re probably seeing a bottoming out in the economy,” said Arjuna Mahendran, Singapore-based chief investment strategist for Asia at HSBC Private Bank, which oversees $494 billion in assets. “The second quarter will be good for stocks as corporate earnings should bounce.”

The MSCI Asia Pacific Index rose 2.0 percent this week to 89.69, completing the longest stretch of gains since December 2006. Asian markets have rallied 27 percent since the MSCI benchmark dropped to a six-year low on March 9.

Japan’s Nikkei 225 Stock Average lost 0.6 percent. South Korea’s Kospi index dropped 0.5 percent as brokerages cut recommendations on financial companies. Thailand’s SET Index gained 0.6 percent in a week shortened by new year holidays. The Thai government called a state of emergency following clashes between security forces and protestors in Bangkok.

MSCI’s Asian index plunged by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to cut jobs amid slumping profits.

China Exports

The gauge has rallied 27 percent from a five-year low reached on March 9 amid signs government measures to ease the financial crisis are working. Earnings estimates for companies included in the MSCI benchmark started to rise this month after a year of falling predictions, data compiled by Bloomberg show.

China Cosco jumped 21 percent to HK$7.09 in Hong Kong. China Shipping Container Lines Co., the nation’s No. 2 cargo-box carrier, rose 23 percent. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest bulk shipper, advanced 7.6 percent to 624 yen.

China’s exports rose 39 percent in March from a month earlier, the customs bureau said on April 10, when Hong Kong markets were shut for a holiday. The Baltic Dry Index, a measure of shipping costs for commodities, jumped 13.8 percent this week. The gauge had slumped as much as 94 percent from a May 2008 peak.

Political Stability

China posted a 6.1 percent annualized growth rate for the first quarter, the slowest rate of expansion in nearly a decade. That may mark the bottom for the world’s third-largest economy as a 4 trillion yuan ($585 billion) stimulus package cushions the effects of the global recession. Sun Mingchun, an economist at Nomura Holdings Inc. in Hong Kong, predicts the economy will expand 8 percent this year.

The Jakarta Composite Index surged 12 percent in the week as polls indicated President Susilo Bambang Yudhoyono’s party may double its seats in parliament, lifting speculation he’ll increase investment to boost growth.

“The elections ensure stability,” said Finny Fauzana, a fund manager at PT PNM Investment Management, which oversees about $216 million in assets in Jakarta. “With certainty comes an improved investment climate, which attracts investors.”

Bumi Resources rose 21 percent to 1,140 rupiah. PT Telekomunikasi Indonesia, the nation’s biggest telephone operator, climbed 12 percent to 7,750 rupiah.

In Tokyo, JFE soared 22 percent to 2,985 yen. Nippon Steel Corp., the global No. 2, rallied 17 percent to 346 yen.

Steel Prices

Japanese mills also agreed with Toyota Motor Corp. to reduce prices by about 15,000 yen ($151) per metric ton for the year, the Asahi newspaper reported. That’s about half the cut that was anticipated, Nomura Holdings Inc. analyst Yuji Matsumoto wrote in a report. Nippon Steel’s operating profit could get a 100 billion yen boost as a result, the analyst wrote.

On April 10, Japan’s Prime Minister Taro Aso unveiled a record 15.4 trillion yen stimulus plan, bringing total supplementary spending to 25 trillion yen, or about 5 percent of the nation’s gross domestic product.

Woori Finance Holdings Co., the largest South Korean financial company, retreated 8.5 percent to 9,110 won after JPMorgan Chase & Co. cut the shares to “underweight” from “neutral,” citing a “downbeat” earnings outlook beyond the first quarter. Hana Financial Group Inc., the owner of South Korea’s fourth-largest bank, lost 11 percent to 21,300 won as it was lowered to “underweight” by HSBC Holdings Plc.

South Korea’s delinquent-loan ratio for lending by domestic banks climbed 0.55 percentage point to 1.46 percent in March, the Financial Supervisory Service said on April 15.