Asian Stocks Gain on Australian Takeovers, Yen; Centennial Coal, CSR Climb

By Jonathan Burgos and Shani Raja -

The MSCI Asia Pacific Index gained 0.3 percent to 112.01 as of 10:33 a.m. in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

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July 5 (Bloomberg) -- Mike Elliott, Sydney-based global mining and metals sector leader for Ernst & Young LLP, speaks with Bloomberg's Susan Li about Australia's planned resources tax. Prime Minister Julia Gillard agreed to cut the planned tax to 30 percent from 40 percent and raise the levy’s trigger level, a week after ousting Kevin Rudd as the nation’s leader to defuse a row that’s damped the government’s election prospects. Elliott also discusses the outlook for the mining industry, and Banpu Pcl's agreement to pay A$2 billion for the 80 percent of Centennial Coal Co. it doesn’t own to take control of thermal and coking coal mines in Australia. (Source: Bloomberg)

Asian stocks rose, lifting the MSCI Asia Pacific Index higher for the first time in five days, amid takeover news in Australia and as a weaker yen boosted the outlook for Japan’s exporters.

Centennial Coal Co. surged 34 percent in Sydney after Banpu Pcl agreed to buy the 80 percent of Centennial it doesn’t already own. CSR Ltd., Australia’s No. 2 building-products maker, climbed 3.2 percent after agreeing to sell its Sucrogen sugar unit to Wilmar International Ltd. for A$1.75 billion ($1.5 billion).Canon Inc., the world’s No. 1 camera maker, climbed 1.1 percent in Tokyo as the yen weakened against the euro.

The MSCI Asia Pacific Index gained 0.3 percent to 112.01 as of 10:33 a.m. in Tokyo. The gauge has fallen 13 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth. Companies in the measure trade at an average 13.6 times estimated profit, the lowest level since December 2008.

“We’re a bit oversold in the short term and people are trying to get value,” said Chris Weston, head of institutional dealing at IG Markets in Melbourne. “What we’re seeing at the moment is a classic tug of war between bearish market dynamics and bullish valuations.”

Japan’s Nikkei 225 Stock Average rose 0.5 percent as the weaker yen boosted Japanese companies’ revenue from overseas when they are repatriated. Australia’s S&P/ASX 200 Index and South Korea’s Kospi Index both gained 0.2 percent. China’s Shanghai Composite Index sank 1.5 percent.

Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The gauge retreated 0.5 percent on July 2, after government reports said payrolls decreased by 125,000 last month, the first drop this year, and factory orders declined.

The MSCI Asia Pacific Index dropped 3.4 percent last week, as weaker manufacturing growth in the U.S., Europe and China added to signs the global economic recovery is slowing.