Asian Stocks Climb for Fourth Week in Five on Economic Optimism

May 30 (Bloomberg) -- Asian stocks rose for a fourth week in five, driving the MSCI Asia Pacific Index to the highest level in eight months, as U.S. consumer confidence and Japanese production reports spurred hopes for a global economic recovery.

Toyota Motor Corp., which gets 31 percent of its revenue in North America, gained 6.7 percent in Tokyo. PetroChina Co., the nation’s biggest oil producer, advanced 6 percent as crude oil prices surged for a second week. Hang Lung Properties Ltd., Hong Kong’s fifth-biggest builder, surged 16 percent after Hong Kong’s government announced an additional stimulus package.

“Signs of a turnaround are coming through,” said Matt Riordan, who helps manage about $3.1 billion at Paradice Investment Management in Sydney. “People who were initially dismissing this as a bear-market rally are concerned it might be sustainable.”

The MSCI Asia Pacific Index gained 2.7 percent to 102.04, its highest level since Oct. 3. The gauge, which has rallied 45 percent from a five-year low on March 9, briefly pared gains this week after North Korea threatened a military strike in response to South Korea joining a program to seize weapons shipments.

South Korea’s Kospi Index sank 0.6 percent as North Korea tested a nuclear device on May 25 and launched six short-range missiles in defiance of international condemnation.

“The North Korean missile test is providing investors a reality check,” said Roger Groebli, Singapore-based head of market analysis at LGT Capital Management, which oversees about $20 billion. “Valuations in Asia are a little rich.”

Economic Recovery?

The rally since March has driven the average valuation of companies on MSCI’s Asian index to 1.4 times the book value of assets, 17 percent higher from at the end of 2008.

China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, advanced 24 percent after commodity shipping rates rallied. Singapore Petroleum Co. surged 21 percent after PetroChina Co. agreed to buy a stake in the oil refining company. Genting Singapore Plc, which is building a theme park and casino in the city, retreated 9.9 percent after shareholders sold stock at a discount.

Toyota Motor, the world’s biggest automaker, climbed 6.7 percent to 3,810 yen.

The Conference Board said on May 26 that its index of U.S. consumer confidence surged to 54.9, the most in six years. Sentiment was projected to rise to 42.6, according to a Bloomberg News survey of economists.

Yesterday, Japan said industrial output rose 5.2 percent in April, the most in 56 years. India also said its economy grew 5.8 percent in the first quarter, beating the 5 percent increase economists had expected.

Property Stocks Gain

PetroChina gained 6 percent to HK$8.89. Inpex Corp., Japan’s largest oil explorer, jumped 7.7 percent to 771,000 yen. Crude oil for July delivery climbed 7.5 percent in the week to $66.31 a barrel.

“Oil has followed equities primarily because investors have cash on hand on the sidelines,” Victor Shum, a senior principal at Purvin & Gertz Inc., said in Singapore. “They are counting on some of the positive economic indicators, and are placing bets.”

Hang Lung Properties rallied 16 percent to HK$26.20. Hong Kong announced on May 26 tax cuts, fee waivers and spending totaling $2.2 billion to shield people from a recession that’s likely to be the worst on record. Luxury home sales in the city climbed to their highest since June, according to a May 27 report by Centaline Property Agency Ltd.

Baltic Dry

Property stocks in Singapore also rallied after City Developments Ltd., the city’s second-biggest developer, said on May 27 that it has started raising prices at one if its residential projects and that it was looking to speed up the launch of another project to take advantage of rising mass housing demand. City Developments advanced 15 percent to S$9.45.

China Cosco jumped 24 percent to HK$10.60 in Hong Kong. Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipping line, STX Pan Ocean Co., South Korea’s biggest bulk carrier, both advanced 11 percent. The Baltic Dry Index, which measures the cost of shipping commodities, climbed 25.4 percent to its highest level since Sept. 26, 2008.

Singapore Petroleum surged 21 percent to S$6.08. PetroChina said on May 24 it will buy Keppel Corp.’s 45.5 percent stake in the oil refining company at S$6.25 a share.

Genting Singapore slumped 9.9 percent to 73 Singapore cents. Golden Hope Ltd. and Lakewood Sdn Bhd. sold 854 million shares at 72 Singapore cents each, according to a pricing document sent to investors.