Growth hopes fuel Asia-surge

FOR a slew of Asian economies the newsflow about what investors can reasonably expect over the remainder of the year just keeps getting better.

Just as recent indicators from the United States - notably job data - have shown that conditions there are still improving, there has been a parallel pick-up in Singapore, Hong Kong and other centres.

Singapore's Straits Times index climbed 4.23 points or 0.2% today to clamber above the 1900 threshold and trade at 1902.5 amid gathering evidence that local growth is surging.

State-linked lender DBS Group led the push higher, adding 20 cents or to S$14.40, while blue-chip soft-drinks maker Fraser & Neave picked up 10 cents or to S$14.30.

The latest cause for celebration was the initial estimate for growth in the first quarter and a probable revision of official forecasts for the entire year.

The Singapore government that underpinned by a heady bounceback in manufacturing, expansion in the January-to-March period was 7.3% compared with the same period last year - the fastest rate since the end of 2000.

Officials added that they would probably tweak the official full-year target upwards from its current range of 3.5% to 5.5%.

Meanwhile, some private sector economists have already pencilled in a full-year figure of 7% or more. There have been other positive signs of late.

Job-hopping - a clear sign of a much-improved employment market - is fast making a comeback in Singapore, according to a recent survey. Also, close to three-quarters of Singapore employers expect that their results will be either 'excellent' or 'good'.

One of the few dark clouds on the horizon comes on the currency front. Singapore manages its currency as its primary guard against inflationary pressures, and officials now say they will allow the local dollar to strengthen, which could be bad news for exporters.

Also on the gainers' board today were major developer Singapore Land, which rose 2 cents to S$3.98, and telecoms player MobileOne, which firmed 1 cent to S$1.44. Manufacturing conglomerate Keppel put on 10 cents to S$7.30.

Similar optimism helped Hong Kong shares to put in a robust performance, with the Hang Seng index advancing 180.49 points to 13,089.86, its best showing in about a month.

Banks did better on the improving mood. Global lender HSBC was hoisted by HK$1 to HK$119.50; affiliate Hang Seng Bank gained HK$1.75 or 1.8% to HK$101.50; and Bank of East Asia traded at HK$25.15, a lift of 15 cents.

Exporters and property developers also shone. Cheung Kong, listed flagship of billionaire Li Ka-shing, picked up HK$1.50 or 2.2% to HK$69; Henderson Land Development put on 40 cents to HK$39.80; and Sun Hunh Kai Properties benefited from a lift of HK$1.25 to HK$76.50.

In Japan, bank shares were once again the targets of foreign and domestic buyers who were seeking out investing plays on the continuing pick-up in the world's No. 2 economy.

The sectoral theme has run through trading over many recent months. Mizuho Financial added 19,000 yen or 3.7% to 523,000; smaller peer UFJ did better with a rise of 30,000 yen or 4% to 779,000; and Sumitomo Mitsui Financial Group improved by 17,000 yen or 2% to 829,000.

The benchmark Nikkei 225 Average marched ahead to close 85.12 points higher at 12,127.82.