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Asian Markets Review - October 5th 2010

The Bank of Japan stole the spotlight in Asia as it cut key interest rate to as low as zero percent, bringing the range to 0% - 0.1% from the previous target of 0.1%. Reserve Bank of Australia however, surprised the market as it held rates at 4.5%. The market had expected the Bank of Japan to hold rates steady while the RBA was expected to raise rates. In addition to slashing the rates, BOJ will purchase government bonds and other assets by creating a ¥5 trillion fund.
BOJ’s move boosted Nikkei, sending it to end 137.7 points higher at 9,518.76 or up 1.47%. Shanghai Stock Exchange also settled 1.72% higher at 2,655.66. Hong Kong’s Hang Seng Index ended at 22,639.14, adding 20.48 points or 0.09%.
The Hong Kong government will direct housing market growth to ‘healthy’ direction by adding supply of land for sale, according to HK Financial Secretary John Tsang.
Tokyo Electron reported an increase in orders by around 10% to 15% in 3Q from 2Q, sending the shares up 3.99% to ¥4,430.
Toyota Motor will launch its 21st century Corolla in Thailand and later to release similar cars in emerging markets such as China, India and Brazil. Toyota ended at ¥2,975, up 0.44%.
The delay of the arrivals of Boeing’s 747-8 freighters is expected to reduce Cathay Pacific’s cargo capacity from May to July 2011. According to the carrier, five planes will be received in the 1H 2011. Cathay’s shares ended down 1.37% at HK$21.55.
Sinopec has been maintained at BUY by Citigroup after the Chinese oil producer agreed to buy 40% of Repsol’s asset. Sinopec ended at HK$6.95 or down 0.14%.
BOC Hong Kong’s price target has been raised from HK$22 to HK$30 by JP Morgan over optimism on potential yuan internationalization. BOC HK settled at HK$25, down 0.79%.
CITIC Pacific Ltd is seen securing HK$5.73 billion of syndicated loan, above the prior plan of HK$4 billion. CITIC was at HK$18.18, 1.2% lower at the end of the day.
JP Morgan also raised HK Exchange and Clearing’s target to HK$168 from HK$158. The HK bourse was assigned with OVERWEIGHT rating. Cash equity volume recovery, yuan internationalization, better technology and seeking strategy on alternative trading networks remain as key opportunities.

Disclosure: No positions