REF Bloomberg :
"May 29 (Bloomberg) -- Asian stocks rose for a second day and oil advanced on speculation policy makers in Beijing will take steps to boost economic growth. Bond risk in Asia increased, while the euro traded near a 22-month low amid concern about the health of European banks.
The MSCI Asia Pacific Index advanced 0.6 percent as of 11:54 a.m. in Tokyo. Hong Kong’s Hang Seng China Enterprises Index of mainland stocks rallied 1.2 percent and Standard & Poor’s 500 Index futures gained 0.7 percent. The euro slid 0.1 percent to $1.2529, while Malaysia’s ringgit dropped 0.5 percent to 3.1592 per dollar. Crude rose 0.4 percent in New York, while gold declined 0.4 percent.
China’s finance ministry took steps to increase consumer demand by saying it will subsidize the use of energy-saving products, a further step in the government’s efforts stimulate the slowing economy. In Europe, at least 25 percent of leveraged buyout companies with debt due by the end of 2015 may default as the economy worsens, Moody’s Investors Service said.
“There are expectations China will introduce more stimulus to boost the economy and there’s optimism the economy will recover in the second half,” said Mao Sheng, an analyst for Huaxi Securities Co. in Chengdu. “Europe woes are still dragging on the market.”
The MSCI Asia Pacific Index is headed for a 10 percent decline in May, the most since October 2008, amid concern that Greece may exit the euro and Spanish lenders will need more financial support.
Chinese Stocks
Great Wall Motor Co. advanced 4.7 percent in Hong Kong. China’s cabinet agreed to revive financial incentives for consumers to trade in their passenger cars to help increase demand in the world’s biggest vehicle market, a government official said. Qingdao Haier Co., which makes refrigerators, gained 3 percent in Shanghai after the Ministry of Finance said China will subsidize the use of energy-saving products.
Taiwan’s Taiex Index gained 2.4 percent and Australia’s S&P/ASX 200 Index gained 0.9 percent.
The euro has fallen 5.3 percent against the dollar in May, poised for the biggest drop in eight months. Italy is scheduled to sell 3.5 billion euros ($4.4 billion) of five-year notes and 2.75 billion euros of 10-year debt tomorrow. The nation’s two- year yields jumped to a four-month high of 3.945 percent yesterday.
Europe Deteriorates
“We have a very serious and deteriorating problem in Europe,” said Peter Elston, the Singapore-based head of Asia- Pacific strategy at Aberdeen Asset Management, which oversees about $270 billion. “The more the crisis progresses the worse the situation becomes.”
The extra yield investors demand to hold Spain’s 10-year bonds instead of similar-maturity German notes soared to 5.12 percentage points yesterday, the most since 1995, according to data compiled by Bloomberg.
The cost of protecting Asian bonds from default rose, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside of Japan advanced two basis points to 196.5, Royal Bank of Scotland Group Plc prices show. The index is headed for its highest close since May 25 and poised for the biggest monthly increase since September, according to CMA.
Ten-year Treasury yields were little changed at 1.74 percent. U.S. government securities returned 2.6 percent from the end of March through May 25, according to Bank of America Merrill Lynch indexes, reflecting demand for the relative safety of the nation’s debt.
Spot gold lost as much as 0.6 percent to $1,571.43 an ounce. Bullion is 5.3 percent lower this month, poised for a fourth monthly decline. Oil for July delivery climbed as much as $1.13 to $91.99 a barrel in New York.
To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Weiyi Lim in Singapore at wlim26@bloomberg.net "
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Steven
Steven Morris CA (SA)
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