Kingfisher Airlines in Talks With Etihad to Sell Stake

By Niveditha Ravi - Dec 11, 2012

Kingfisher Airlines Ltd. (KAIR), the Indian carrier that halted flights because of a cash crunch, said Etihad Airways PJSC is among possible investors it’s talking to as it seeks to raise funds though a stake sale.
Discussions are only at the “negotiation stages” and no agreement has been reached with Abu Dhabi-based Etihad or any other airline, the Bangalore-based carrier said in a filing yesterday. It didn’t name any other potential investors or give further details on the talks. Etihad declined to comment.
Kingfisher, which grounded flights in October, jumped by its 5 percent daily limit in Mumbai trading yesterday after Mumbai Mirror newspaper said Etihad had agreed to buy a 48 percent stake. The Indian carrier’s chairman, liquor tycoon Vijay Mallya, has been trying to raise capital for more than two years to help ease an 86 billion-rupee ($1.6 billion) debt pile.
Etihad is in due diligence with a “couple” of Indian carriers, Chief Executive Officer James Hogan said last week in an interview. The carrier already has stakes in Virgin Australia Holdings Ltd. (VAH), Aer Lingus Group Plc and Air Berlin Plc. (AB1)
The airline is in talks to buy as much as 24 percent of Jet Airways (India) Ltd. (JETIN), the nation’s biggest listed carrier, an Indian government official said earlier this month. Jet may raise about 16 billion rupees from the sale, said the official, who declined to be identified citing rules.

Mallya’s Birthday

Etihad agreed to purchase the Kingfisher stake for more than 30 billion rupees, Mirror newspaper reported, citing airlines’ officials it didn’t identify. That’s more than double Kingfisher’s market value. A deal may be announced around Dec. 18, Mallya’s birthday, according to the report.
Kingfisher closed in Mumbai trading yesterday at 15.60 rupees, the highest since Sept. 28. The stock has slumped 26 percent this year.
Kingfisher also needs funds to convince India’s aviation regulator to re-active its license, which was suspended following the service disruptions in October.
India in September ended a ban on local airlines selling stakes to overseas operators to help them raise funds amid industrywide losses. The investments can be as big as 49 percent shareholdings.
To contact the reporter on this story: Niveditha Ravi in Mumbai at nravi2@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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Asian Stocks Outside Japan Rise Before U.S. Fed Meeting

By Jonathan Burgos and Adam Haigh - Dec 10, 2012

Asian stocks rose, with a regional index excluding Japan heading for its highest close in 16 months, ahead of a Federal Reserve policy meeting and as investors await progress on U.S. budget talks.
BHP Billiton Ltd., the world’s biggest mining company, added 1.4 percent in Sydney after metal prices rose. Renesas Electronics Corp. jumped 4.2 percent as the Japanese chipmaker said it will sell at least 150 billion yen ($1.8 billion) of new shares to a government-backed fund and customers as part of a bailout plan. Kansai Electric Power Co. sank 5.9 percent to lead Japanese utilities lower after regulators said an active earthquake fault may be running under a nuclear reactor.
The MSCI Asia Pacific Excluding Japan Index (MXAPJ) added 0.2 percent to 459.95 as of 1:08 p.m. Tokyo time, heading for its highest close since Aug. 3, 2011. About four shares rose for every three that fell. The gauge climbed the past three weeks on signs of recovery in the world’s two largest economies and optimism U.S. lawmakers will make a budget deal to avert the so- called fiscal cliff.
“The only risk would be is if there’s no resolution of the U.S. fiscal cliff, but I think that’s unlikely,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The more likely scenario is that shares continue to rise next year as the U.S. economy picks up momentum.”
Australia’s S&P/ASX 200 Index (AS51) gained 0.4 percent, while Singapore’s Straits Times Index advanced 0.5 percent. South Korea’s Kospi Index added 0.1 percent. Hong Kong’s Hang Seng Index climbed 0.2 percent, erasing losses of 0.2 percent. Japan’s Nikkei 225 Stock Average slipped 0.3 percent.

Chinese Loans

China’s Shanghai Composite Index (SHCOMP) slid 0.4 percent after climbing 2.7 percent the past two days. New lending by the country’s banks increased to 522.9 billion yuan ($84 billion) in November. That compares with 562.2 billion yuan a year earlier and the 550 billion yuan median estimate by 30 economists surveyed by Bloomberg.
“The market needs to take a breather here after its decent rally,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “The market will probably continue to go up after the consolidation given the recent positive signs that the economy is bottoming out.”
Indicators are giving a mixed picture of the outlook for the world’s second-biggest economy, with China’s exports rising less than forecast last month even as industrial output accelerated.

U.S. Futures

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge gained less than 0.1 percent yesterday as economic data in China beat estimates and investors weighed prospects for a U.S. budget deal.
Federal Reserve policy makers begin a two-day meeting today that will be followed by updated projections on economic growth, unemployment, inflation and interest rates on Dec. 12. Fed officials are considering whether to supplement $40 billion a month of mortgage-bond purchases with Treasury purchases when their Operation Twist program expires at the end of the month.
Separately, U.S. lawmakers need to agree on a budget to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year. President Barack Obama and Republican House Speaker John Boehner met one- on-one at the weekend at the White House. Representatives for the two said in statements afterward that “the lines of communication remain open.”

Budget Negotiations

“The market now seems stuck in a trading range until news from Washington about any progress or deterioration in budget negotiations is released,” said Matthew Sherwood, head of markets research at Perpetual Investment, which manages about $25 billion in Sydney.
Raw-material producers advanced. The London Metals Exchange Index (LMEX), which tracks the prices of commodities from aluminum to copper, climbed 1.9 percent yesterday, extending gains for a second day.
BHP Billiton gained 1.4 percent to A$35.445 in Sydney. Rio Tinto Group, the world’s second-biggest mining company, added 0.8 percent to A$61.81.
Renesas advanced 4.2 percent to 321 yen in Tokyo. The chipmaker will sell 150 billion yen of new shares to a group led by Innovation Network Corp. of Japan, making the government- backed fund its biggest shareholder with a 69 percent stake, as part of a bailout plan.
Skyworth Digital Holdings Ltd. (751) rose 3.2 percent to HK$4.22 in Hong Kong after saying total television sales increased 44 percent in November from a year earlier.

Earthquake Risk

The MSCI Asia Pacific Index advanced 11 percent this year through yesterday as central banks from Europe, the U.S., Japan and China took steps to support economic growth. That compares with a 13 percent gain for the S&P 500 and 14 percent for the Stoxx Europe 600 Index. The Asian gauge traded at 14.2 times estimated earnings, compared with 13.7 times for the S&P 500 Index and 12.6 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japanese utilities declined. The Nuclear Regulation Authority said earthquake risk may prevent the restart of a reactor operated by the Japan Atomic Power Co.
Kansai Electric dropped 5.9 percent to 730 yen. Chubu Electric Power Co. slid 4.9 percent to 1,032 yen. Tokyo Electric Power Co. (9501), owner of the power plant at the center of last year’s nuclear disaster, fell 2.1 percent to 137 yen.
“Prospects for restarting the nuclear reactors are slowly being squashed, and that’s going to increase the cost of electricity,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, which has about $400 billion in assets.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

India Options Trade Grows Fastest in World as Sensex Tops BRICs

By Santanu Chakraborty and Michael Patterson - Dec 9, 2012

India’s options market is growing at the fastest pace in the world, helping restore investor confidence in a stock market yet to recover from a 52 percent plunge during the global financial crisis.
Equity options traded on the National Stock Exchange of India Ltd. rose 36 percent in the first half, the most among the 10 largest bourses, according to the World Federation of Exchanges. The BSE India Sensitive Index’s volatility has dropped below measures in Brazil, Russia and China to the lowest level since at least 1993, data compiled by Bloomberg show.
Foreigners bought a net $21 billion of local equities this year, pushing the Sensex up 26 percent, the most of the so- called BRIC markets. While the increase in options reflects speculation by Indian investors, it also provides international money managers with the opportunity to hedge their bets. In 2008, when the crisis sparked a record plunge in the Sensex, options trading was 92 percent below today’s level.
“Indian options have given sophisticated investors the flexibility to protect themselves from volatility and also profit from it,” Manoj Murlidharan Vayalar, the associate vice president of derivatives at India Infoline Ltd. (IIFL), said in a phone interview on Dec. 7 from Mumbai.
Options trading may grow at a 20 percent annual pace during the next four years as Asia’s fifth-biggest equity market matures, said Rakesh Somani, the president of the Association of National Exchanges Members of India and a director at Eureka Stock & Share Broking Services Ltd., in a Nov. 23 interview. Options give investors the right, without the obligation, to buy or sell assets at a fixed price by a specific date.

Volumes Surge

Volumes began rising in 2008 after the government reduced taxes on the contracts. Trading on the NSE and BSE Ltd.’s bourse in Mumbai exploded to a notional value of about $468 billion in October, or about eight times the value of traded shares, data compiled by the WFE and Bloomberg show. In Brazil, the value of options was about twice that of stocks. A total 23.7 million equity options traded on the NSE in the first six months of 2012.
Average daily trading in options of Mumbai-based State Bank of India, the nation’s largest lender, climbed to about 74,000 contracts in November from 2,200 four years ago, according to data compiled by Bloomberg. Volumes for Bangalore-based Infosys Ltd. (INFY), India’s second-largest software services exporter, increased to about 14,000 from 800.

Speculative Trades

“Options are wonderful instruments as they add to the liquidity, functionality and trading choices,” Sunil Singhania, who helps oversee about $16 billion as the head of equities at Mumbai-based Reliance Capital Asset Management Ltd., India’s second-biggest mutual fund manager, said in an interview at his office on Dec. 7. The growing market “attracts long-term money from both India and abroad.”
Options trading has hurt India’s capital markets by encouraging speculation instead of long-term equity investment, said Jignesh Shah, the vice chairman of MCX Stock Exchange Ltd., which plans to start trading stocks and equity derivatives next year.
The 30-day average value of shares traded on the NSE and BSE has dropped to the equivalent of about $2.4 billion from $4.6 billion three years ago, data compiled by Bloomberg show.
“Giving excessive focus on a single segment like derivatives and a few speculative products has caused great harm to the overall balance of Indian capital markets,” Shah said in an interview in Mumbai on Nov. 19. “The fundamental approach we have is to create an investment culture.”

Leveraged Products

India’s stock market regulator prevented the creation of so-called mini-derivatives linked to the Nifty and Sensex (SENSEX) indexes last month. The Nov. 20 ban is meant to keep individuals from trading the securities, which have a smaller notional value than standard contracts, the Securities & Exchange Board of India said in the order.
“Small investors were not aware of the various nuances and the fact that mini-derivatives were leveraged products,” SEBI Chairman U.K. Sinha said in Mumbai on Nov. 23. “But by no means should options be done away with. Derivatives are not weapons of mass destruction. They serve a legitimate function of providing liquidity and hedging risks.”
The growth is prompting brokerages that dominate trading to shift staff.
Religare Capital Markets Ltd. has moved employees to its options business from equities this year, said Gautam Trivedi, the head of equities at the unit of Religare Enterprises Ltd. (RELG), the nation’s largest securities firm by market value. Motilal Oswal Financial Services Ltd. (MOFS) is increasing options training for research and sales staff, said Sameer Kamath, the chief financial officer at the Mumbai-based broker.

Foreign Buyers

“Domestic brokerages are increasingly selling more derivatives products to offshore clients,” said R.K. Gupta, who helps oversee about $645 million as a New Delhi-based managing director at Taurus Asset Management Ltd.
Foreign purchases of Indian shares this year were the biggest among 10 Asian markets tracked by Bloomberg. The Sensex index is valued at 16 times reported earnings, compared with 20 for Brazil’s Bovespa Index, 11 for China’s Shanghai Composite Index and 5.8 for Russia’s Micex Index.
Options are also becoming more popular because they allow speculators to leverage bets, according to Gupta. Options typically cost a fraction of stocks and prices for contracts approaching expiration often fluctuate more than the underlying shares, data compiled by Bloomberg show.

Strike Price

Call options that expire this month on Reliance Industries Ltd. (RIL), India’s largest company by market value, traded at 15.4 rupees on Nov. 20. The contracts, which have a strike price of 780 rupees, jumped 15 percent to 17.65 rupees the next day as the underlying shares gained 0.8 percent to 771 rupees.
The 90-day historical volatility of the Sensex index fell to a record low of 11.8 on Dec. 7, data compiled by Bloomberg show. Brazil’s Bovespa has a volatility reading of 20, versus 16 for the Micex and the Shanghai Composite, and 11.7 for the Standard & Poor’s 500 Index.
The India VIX, a measure of options prices, dropped to 13.04 on Oct. 22, the lowest level on record, and traded at 14.96 on Dec. 7.
Dalton Capital Advisors India Pvt., a unit of London-based Dalton Strategic Partnership LLP, buys options to protect stock holdings from declines before market-moving events. The contracts are cheap after a drop in volatility, U.R. Bhat, a Mumbai-based managing director at Dalton Capital, whose parent has $2 billion of global assets, said by phone on Dec. 7.
“Most institutions are increasingly using more options,” Bhat said. “Growth of the options market has been aided by a rise in liquidity.”
To contact the reporters on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net; Michael Patterson in Hong Kong at mpatterson10@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Singh Sweeps India Parliament Retail Votes in Boost for Reforms

By Bibhudatta Pradhan - Dec 7, 2012

India’s government won a vote in parliament’s upper house on foreign investment in supermarkets, securing a clean sweep of both chambers and raising expectations it will move ahead with further economic reforms.
While 123 members in the 244-member upper house supported Prime Minister Manmohan Singh’s move to allow companies such as Wal-Mart Stores Inc. (WMT) and Carrefour SA to own majority stakes in ventures in India, 109 voted against. Two regional parties outside the ruling alliance supported the government, one voting in favor and the other walking out before the ballot.
“It’s a victory for more reforms,” said Parliamentary Affairs Minister Kamal Nath. “We will bring financial bills in following weeks.”
The lower house endorsed the key plank of India’s biggest embrace of foreign investment in a decade on Dec. 5 with a margin of victory of 35 votes. Singh plans to present to parliament proposals to increase the foreign investment cap for the insurance sector, and allow overseas companies to buy stakes in pension firms for the first time.
Deputy Governor of the Reserve Bank of India Subir Gokarn said the foreign investment in multibrand retail could help bring down food prices, a major driver of inflation that’s the highest among the largest emerging economies.
The September move to enable overseas companies to open stores in the country didn’t require parliamentary approval to become law. Singh’s government agreed to a vote to end protests that had stalled legislative business as economic growth has slowed to a three-year low.

‘Have Faith’

As the debate began in upper house yesterday, opposition lawmakers repeated arguments that the policy would throw small shopkeepers out of work, further impoverish farmers and hurt consumers. Ruling coalition members defended the retail plan, which can be rejected by state administrations.
“We should have faith” that no supermarket chains will wipe out small retailers, Commerce Minister Anand Sharma said today. “We have taken the decision in the supreme national interest of the country.”
Opposition parties have used the supermarket policy to attack the government as it seeks to recover its poise after two years during which it was attacked over corruption allegations and weak leadership, and just over a year before the next election.
“You would eventually have stores owned by the Americans, the French and the British selling Chinese products,” said Arun Jaitley, leader of the main opposition Bharatiya Janata Party, yesterday. India “would become a nation of sales boys and sales girls.”

Deal Makers

Mayawati’s Bahujan Samaj Party, voted in favor of the government, while members of her regional opponent, Mulayam Singh Yadav’s Samajwadi Party, left the chamber before voting. Both parties, which opposed the retail opening, have a record of refusing to vote alongside the Hindu-nationalist Bharatiya Janata Party and striking deals with governing parties for their support.
The retail policy will enable Wal-Mart, Carrefour SA (CA) and Tesco Plc (TSCO) to step up their presence in the world’s second-most populous nation to tap a market that Technopak Advisors Pvt. estimates will expand to $725 billion by 2017.
To contact the reporter on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net
To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Fuel Import Plan to Ease Airline Pain: Corporate India By Karthikeyan Sundaram - Dec 6, 2012

Indian airlines including SpiceJet Ltd. (SJET) and IndiGo may be allowed to store imported jet fuel at state-owned refiners’ facilities as the government works to ease rules to help carriers pare their biggest cost.
The petroleum ministry agreed to allow airlines to use refiners’ infrastructure at airports when they import the fuel, Aviation Minister Ajit Singh said in a Dec. 4 interview. Oil Minister Veerappa Moily said the next day that his ministry will discuss the terms of access with the refiners. He didn’t give a timeframe for concluding the talks.
Prime Minister Manmohan Singh’s government allowed airlines to import fuel and sell stakes to overseas carriers as high operating costs and a price war caused industrywide losses and forced Kingfisher Airlines Ltd. (KAIR) to halt flights. Purchasing fuel overseas will help operators save on local taxes that are as high as 30 percent.
“It’s a very positive step,” said Sharan Lillaney, an analyst at Angel Broking Ltd. who recommends buying SpiceJet shares. “The industry is going through a structural change and everybody is working to improve the state of airlines.”
Airlines have been holding back on plans to import jet kerosene even nine months after a ban was lifted because of lack of storage facilities. Prior to the rule change, only state trading agencies were permitted to import the fuel. In September, the government also allowed airlines to sell as much as 49 percent to overseas operators.

Bangkok, Dubai

Carriers pay at least 60 percent more for fuel in the country than in Bangkok, Dubai, Kuala Lumpur or Singapore because of state taxes ranging from 4 percent to 30 percent, according to a civil aviation ministry document in June. Jet Airways (India) Ltd. (JETIN), the nation’s biggest listed carrier, and discount airline SpiceJet both posted second-quarter losses as fuel costs eroded gains from carrying more passengers.
SpiceJet rose as much as 1.4 percent to 49.7 rupees in Mumbai intraday trading, while Jet Airways gained 0.9 percent to 545.95 rupees. Kingfisher jumped 4.8 percent. The BSE India Sensitive Index gained 0.4 percent.
Sales tax charged by the state government, excise duty and freight-related costs account for 32 percent of the retail price of aviation fuel in Mumbai, according to the oil ministry. Airlines need to pay a 5 percent customs duty when they import the fuel, according to the aviation ministry. Fuel imported directly by users is exempted from local sales tax.
Aviation fuel price in India sometimes move contrary to the international market rate, according to the aviation ministry. Jet fuel prices in major airports also suggest that the rates are almost uniform for all the three state-owned oil marketing companies, the ministry said in its note on industry viability.

Indian Oil

On June 1, price of jet kerosene sold by Indian Oil Corp., the nation’s largest refiner, dropped 0.6 percent to 66,588 rupees per kiloliter in Mumbai from 66,990 rupees on March 16. In comparison, the fuel slumped about 17 percent in Singapore trading during the same period.
Indian Oil Chairman R.S. Butola declined to comment on the plan to share airport infrastructure. Hindustan Petroleum Corp. Chairman S. Roy Choudhury and Bharat Petroleum Corp. Chairman R.K. Singh didn’t answer two calls each to their mobile phones.
The federal government allows state-run refiners including Indian Oil to sell jet fuel to carriers at market-linked prices, which are revised every 15 days. Jet fuel accounted for 3.4 percent of Indian refineries’ total fuel sales at home in the seven months to October, according to oil ministry data. Diesel, kerosene and cooking gas are sold at prices set by the Indian government to curb inflation.

Import Permission

The Directorate General of Foreign Trade in April gave permission to budget carrier IndiGo to import 715,000 kiloliters of the fuel within 18 months. SpiceJet was allowed to import 50,000 kiloliters of the fuel.
Air India Ltd. won approvals to import 100,000 kiloliters and Go Airlines Ltd. 200,000 kiloliters, Aviation Minister Singh told parliament Aug. 17. Kingfisher won permission to import 500,000 kiloliters. The carrier’s didn’t immediately respond to e-mails seeking comments on their fuel purchase.
Carriers may not benefit much by importing the fuel because of the charges for storage and transportation, said Harsh Vardhan, chairman of New Delhi-based Starair Consulting, which advises airlines. “The costs involved in importing, storing and moving the fuel defeat the purpose.”

Combined Debt

CAPA Centre for Aviation, an industry consultant, predicted in May that rising fuel and airport costs will increase the combined debt of local carriers by 18 percent to $20 billion within 12-18 months. Half of the debt are aircraft related and the rest are working capital loans and dues to airport operators and fuel companies, according to the aviation ministry.
The government is also working to introduce a uniform rate of sales tax on jet fuel across Indian states, aviation minister Singh said. Talks are under way with the finance ministry on this proposal, he said without specifying a timeframe for a decision.
“The government has kept trying to arrive at one solution or another,” to help airlines, said New Delhi-based Kapil Kaul, who heads the Indian unit of CAPA. “Facilitating imports will eventually lead to a uniform tax on the fuel.”
To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

Gold Holds Near One-Month Low Amid Record Holdings, Dollar Gains By Glenys Sim - Dec 5, 2012

Gold traded little changed after declining to a one-month low as investors’ boosted holdings in exchange-traded products to the highest ever, countering the impact of a stronger dollar.
Spot gold was at $1,692.70 at 9:25 a.m. in Singapore after falling to $1,684.93 yesterday, the least expensive since Nov. 6, as the dollar rallied on speculation that U.S. lawmakers will reach a budget agreement. Holdings in ETPs climbed to 2,627.59 metric tons yesterday, data compiled by Bloomberg show.
A few dozen Republicans joined a bipartisan call to break an impasse between President Barack Obama and House Speaker John Boehner to avoid spending cuts and tax increases in January, known as the fiscal cliff. The Dollar Index, which tracks the greenback against six major partners, halted its longest slump in more than a year yesterday and gained 0.2 percent today.
“Markets are being held hostage by progress on the fiscal cliff in the U.S.,” said Feng Liang, an analyst at GF Futures Co., a unit of the nation’s third-biggest listed brokerage. “There are still bargain hunters for gold below $1,700.”
Gold will probably peak in 2013 and keep declining the following year as U.S. growth accelerates, Goldman Sachs Group Inc. said yesterday. Bullion will be at $1,825 in three months, $1,805 in six months and $1,800 in a year, it said, lowering its three-month forecast from $1,840 and its six- and 12-month outlooks from $1,940, Goldman said in a report.
Gold for December delivery gained as much as 0.2 percent to $1,697.80 an ounce on the Comex in New York, before trading at $1,696.30. The contract slipped to $1,686 yesterday, also the lowest level since Nov. 6.
Cash silver fell for a third day, losing 0.2 percent to $32.8038 an ounce. Spot platinum dropped 0.3 percent to $1,578 an ounce after touching a two-week low of $1,571.15 yesterday. Palladium was little changed at $685.50 an ounce.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Asian Stocks Swing From Loss to Gain on U.S. Budget Talks

By Jonathan Burgos and Adam Haigh - Dec 4, 2012

Asian stocks swung between gains and losses as President Barack Obama held his ground on raising tax rates for the highest-income Americans, bringing the U.S. budget talks into a stalemate. Ping An Insurance (Group) Co. advanced as HSBC Holdings Plc agreed to sell its stake.
Honda Motor Co. (7267), a Japanese carmaker that gets about 44 percent of sales from North America, declined 1 percent. Western Areas NL sank 4.9 percent in Sydney after the nickel sulphide producer raised A$50 million ($52.4 million) selling shares at a discount. Ping An rose 3.8 percent in Hong Kong after HSBC agreed to sell its entire 15.6 percent stake in China’s second- largest insurer to Thailand’s Charoen Pokphand Group Co. for $9.4 billion.
The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 125.03 as of 11:32 a.m. in Tokyo, erasing losses of as much as 0.3 percent. Almost two shares rose for each that fell on the gauge. The measure advanced last month amid signs China’s economic slowdown may be ending and optimism U.S. lawmakers would agree on a budget deal to avert the so-called fiscal cliff, which would result in more than $600 billion in tax increases and spending cuts taking effect next month.
“The fiscal cliff has the potential to frighten the market until the end of the year, but I don’t think it’ll be substantially surprising,” said Peter Esho, chief market strategist at City Index Ltd., a provider of equities, bonds and currency trading in Sydney. “The market’s consolidating after a good run.”
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.