Asian markets: Warren Buffett sends shares in Chinese suitmaker soaring
Asian stocks rose Thursday sending the MSCI Asia Pacific Index to a new high for the year, ending the day at 118. This indicator has increased 69 percent since hitting its five-year low on March 9. In China, the Shanghai Composite index rose 2 percent to close at 3,060, just above the 3,000 mark, which is emerging as a key psychological barrier.
There was huge excitement in Shanghai as shares of Warren Buffett's favorite suit company, Dalain Dayang Trands Co. Ltd., climbed to its 10 percent daily limit again today. Dalain's stock has soared 229 percent this year making it the fastest-growing northern-Chinese clothing maker. This is the third consecutive day the company has seen a 10 percent rise, perhaps due to Buffett's recent praise for the company. "I now have nine suits all made in China," he told the audience last week at his Berkshire Hathaway meeting. "I threw away the rest of my suits."
In other sectors, Chinese metal stocks remained strong, with Aluminum Corp of China (Chalco) rising 1.7 percent, Jianxi Copper adding 0.8 percent, and gold mining company, Zijin Mining Group Co. Ltd. up 0.5 percent. Mining stocks in Sydney also headed north, with the world's largest mining company, BHP Billiton Ltd., climbing 1.5 percent. BHP shares rallied after the company predicted a doubling in steel demand over the next 15 years.
Coal stocks also continued to rise in China with prices predicted to increase sharply this year as a result of a loss of productivity due to the government closure of unregulated mines. China Shenhua Energy Co Ltd. advanced 3.4 percent, claiming that their sales are up by 8.3 percent this year.
In Hong Kong the Hang Seng closed at 21,769 -- up 1.7 percent. Cathay Pacific Airways Ltd. jumped 5.5 percent after announcing it will raise cash through the combined sale of six Boeing airplanes and shares in aircraft maintenance company HAECO. The sale is expected to infuse HK$1.27 into the cash-strapped airline.
Hong Kong clothing company, Esprit Holdings Ltd. climbed 2.6 percent on a positive recommendation from Goldman Sachs and steel company CITIC Pacific Ltd, cashed in on the IPO excitement, rising 2.5 percent on reports that it, too, plans to list its shares in China.
In Tokyo, the Nikkei rose 1.7 percent to close at 10,444, with shares in steelmakers rising on the hope that positive news about the strengthening U.S. economy will mean rising demand in Japan. JFE Holdings Inc., Japan's second-largest steelmaker, jumped 5 percent, and Nippon Steel rose 4.1 percent.
Some Japanese car makers also saw gains with Nissan Motor Co. Ltd. climbing 3.4 percent and Toyota Motor Corp., which today announced a $1 billion U.S. marketing campaign, adding 1.9 percent.
If Toyota really wants to increase its market share, perhaps it should call on Buffett to spin a little magic.