Asian Shares Up On US Lead; M&S News Spurs AXA Asia Pacific

SINGAPORE -- Asian shares were higher Monday after modest gains on Wall Street Friday. In Australia, AXA Asia Pacific jumped 30% on news of a multibillion dollar takeover offer from rival wealth management firm AMP.

Japan's Nikkei 225 was up 0.3% with Australia's S&P/ASX 200 1.6% higher and South Korea's Kospi Composite up 1.1%. New Zealand's NZX-50 had gained 0.2%.

Some traders were cautious. "There's no clear picture yet (on whether we are seeing real economic recovery), so investors are reluctant to take new positions at this level," said OCBC head of research Carmen Lee in Singapore.

Friday's U.S. nonfarm payrolls data for October showed the unemployment rate rose above 10% for the first time in 26 years.

Australia's market though was being helped by corporate action and positive earnings.

AXA Asia Pacific Holdings gained after the company rejected an A$11.04 billion cash and equity takeover proposal from AMP, despite the deal having the backing of its French parent, AXA SA.

Under the offer, AMP would buy all the shares in AXA APH, including the 53.9% held by AXA SA, while the French firm would buy AXA APH's Asian operations.

But AXA rejected the offer as inadequate, saying the bid was made "against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability." AMP shares were down 0.5%.

Southern Cross Equities said a deal would be a win for both AXA Asia Pacific and AMP. "AMP would create a more powerful and competitive business, gaining access to independent financial planners, as well as aligned planners and platforms," it said.

Commonwealth Bank of Australia gained 3.3% after it reported unaudited first quarter cash profit of A$1.4 billion, which analysts said was a positive result. Orica, the world's largest explosives maker, added 5.6% after posting a modest rise in fiscal year earnings and providing a positive outlook for the current year.

Japan's market was curbed by concerns about a higher yen, which can eat into returns for exporter-related companies. "(The) U.S. job data confirmed the view that the Fed will maintain low rates for a while, keeping the U.S. dollar weak," said Nikko Cordial senior strategist Tsuyoshi Kawata.

Toyota Motor was down 1.4%, Honda Motor off 1.1% and Canon fell 1.2%.

Korean shares were being led by automobile, construction and financial stocks, with Posco up 1.5%, Hyundai Steel up 1.4% and Hyundai Motor up 0.5%.

But Ssangyong Motor fell its daily limit of 15% after a Seoul-based court on Friday said it would hold a new hearing on Dec. 11 to decide the fate of the debt-ridden firm, as creditors failed to agree on a rescue plan.

Attention in New Zealand was diverted somewhat by corporate action in Australia. "That explains the reasonably quiet volumes," said Goldman Sachs JBWere institutional broker Peter Sigley.

But overall sentiment was supported by news dairy giant Fonterra Co-operative Group had increased by 18.6% its forecast payout to its 10,500 farmer shareholders for the current season. The higher payout is set to pump billions of dollars into the New Zealand economy, which managed to just climb out of a five-quarter long recession in the second quarter.

The New Zealand dollar jumped on the news, lifting to US$0.7350 from US$0.7250 at the end of last week.

Bank of New Zealand currency strategist Danica Hampton said Fonterra last week downplayed speculation of a forecast hike, so "this was a pleasant surprise." "The Fonterra news is a further reason for the Kiwi to spurt higher."

Elsewhere in foreign exchange markets the euro was pushing higher against both the U.S. dollar and Japanese yen, at $1.4902 from $1.4844 late in New York, and at Y134.09, versus Y133.53.

Against the yen, the U.S. dollar was at Y89.95, from Y89.96.

Buyers were back for the Australian dollar, which rose to US$0.9258, its highest level since October 26. Data showed the number of housing-finance approvals in Australia rose a seasonally adjusted 5.1% in September from August, more than the 3.0% expected in a Dow Jones Newswires poll of economists.

Traders said the U.S. jobs data reinforced the downside bias for the U.S. dollar. "There's no way the Fed can hike its policy rates for now. In the end, it's a dollar-sell trend," said Nomura Securities senior dealer Hiroshi Maeba in Tokyo.

Lead Japanese government bond futures were lower, with the contract down 0.06 at 137.50 points, amid ongoing concerns about the potential for fresh supply.

Crude oil was higher with Nymex December crude up 80 cents at $78.23 per barrel on Globex. Spot gold was at $1,098.70 a troy ounce, up $1.80 from the New York close.