Asian Stocks Have Swell Thursday

HONG KONG -- In a pre-holiday turnaround, major benchmark indexes in Asia posted broad gains in thin trading on Thursday, on the back of Japan's record-setting stimulus plans and a surprise jump in machinery orders.Japan's ruling Liberal Democratic Party proposed the government spend a bigger-than-expected 15.4 trillion yen ($155 billion) on economic stimulus, including tax cuts and subsidies. The package being drafted includes emergency aid to the unemployed, loan guarantees for small and medium businesses, subsidies for environment-friendly vehicles and residential solar power, and expanded health and child care. (See "Japan Aims To Resuscitate Economy At Any Cost"). The Nikkei 225 average climbed3.7%, or 321.05 points, to 8,916.06.Japan may need to issue 10 trillion to 11 trillion yen ($100 billion to $110 billion) in government bonds to finance the new fiscal stimulus package, the top government spokesman said Thursday, leading investors to sell down Japanese bonds. Japan already has the highest level of public debt in the world at 172% of GDP as of 2008. The package is expected to be announced on Friday.In a sign that the recession in Japan could be moderating, machinery orders posted an unexpected uptick in February of 1.4% from the previous month, breaking a five-month losing streak. However, Bank of Japan Governor Masaaki Shirakawa said that with exports deteriorating significantly, it was highly likely Japan's economy would keep worsening. Exports more than halved in February, compared with a year earlier. ( SMFJY - news ...
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Ignominious Exit For Yung At CITIC Pacific

It's a dismaying downfall for the former richest man in mainland China. Larry Yung, scion of a storied family hailed as the country's first capitalists to emerge since the communist takeover in 1949, is exiting the company he founded, CITIC Pacific, with little fanfare. CITIC Pacific now has to rebuild its tattered reputation and downsize significantly after a crippling $2 billion in losses on disastrous foreign currency bets, but the road won't be easy. Managing director Henry Fan and Yung, a billionaire until last year who was ranked by Forbes as China's richest person in 2005, said late Wednesday that they will be resigning from the company that they founded in 1990. Chang Zhenming, vice chairman of CITIC Pacific's Beijing-based parent CITIC Group, will replace Yung as chairman. Investors' confidence in CITIC Pacific was badly shaken after the company booked 15.9 billion Hong Kong dollars ($2.3 billion) in realized and unrealized losses last year on a bungled attempt to hedge movements in the Australian dollar, ostensibly to protect a mining investment in Australia. "It is probably premature at this moment to assume that Mr. Chang will eventually turn around the business," Citi analysts said in a Thursday note. Chang, who presided over state-owned China Construction Bank and its initial public offering in 2005, could sell CITIC Pacific's assets in power, Hong Kong tunnels and airline Cathay Pacific.But it will take Chang "considerable time" to improve the company's balance sheet as over half of its cash and available credit will be consumed this year by capital spending of 10 billion Hong Kong dollars ($1.5 billion) and debt maturity of 9.4 billion Hong Kong dollars ($1.4 billion), Citi added. The company had been focusing "very well" on growing its three core assets--iron ore, steel and Chinese property--and disposing of others until the forex losses were ...
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Asian Stocks Get Back On Track

Asian stocks rose in thin pre-holiday trade Thursday, as a surprise rise in machinery orders in Japan boosted sentiment, as well as government plans to kick-start the economy.Japan's ruling Liberal Democratic Party proposed the government spend a bigger than expected 15.4 trillion yen ($154 billion) on economic stimulus, boosting stocks in sectors seen benefiting from the spending. The Nikkei 225 average spiked 5.3% to 8,861.49 points in the late afternoon.Japan may need to issue 10 trillion to 11 trillion yen ($100 billion to $110 billion) in government bonds to finance the new fiscal stimulus package, the top government spokesman said Thursday, leading investors to sell down Japanese bonds. Japan already has the highest level of public debt in the world at 172% of GDP as of 2008. The package is expected to be announced on Friday.In a sign that the recession in Japan could be moderating, machinery orders posted an unexpected rise in February of 1.4% from the previous month, breaking a five-month losing streak. However, Bank of Japan Governor Masaaki Shirakawa said that with exports deteriorating significantly, it was highly likely Japan's economy would keep worsening.On expectations that it will benefit from the stimulus package, construction equipment maker ( KMTUY - news - people ) jumped 6.1% to 1,236 yen ($12.37). Solar panel makers also got a boost due to measures in the stimulus package to support the growth of Japan's alternative energy industry. ...
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