STOCKS weekly review (01.07 – 05.07.2013) ASIA

Japanese shares rose, with the Topix index capping the biggest three-week gain since April 2009, after the yen weakened and the European Central Bank and Bank of England signaled they will keep borrowing costs low.

The Topix added 4.8% last week to 1,188.58, the highest since May 24. It increased over the past three weeks to more than 12%. The Nikkei 225 Stock Average climbed 4.57% to 14,309.97. Shares rose as the yen’s weakness beyond Y100 per dollar improved the outlook for Japanese exporters.

The Topix has gained 38% this year on optimism Prime Minister Shinzo Abe will succeed in beating deflation. Abe is expected to push through economic reforms after winning upper-house elections on July 21.

China’s benchmark stock index advanced, capping its first weekly gain since May, as rallies in property firms and material producers overshadowed losses in energy shares and drugmakers.

The Shanghai Composite Index added 1.4% for the week to 2,007.20.  The Shanghai Composite has fallen 12% this year, as data from industrial production to exports pointed to a sustained slowdown in the economy and money-market rates reached record highs.

The Hong Kong’s Hang Seng index rose 2.09% to 20,854.67.

UBS AG lowered its rating on Chinese stocks to neutral in a report Friday, citing the risk of further declines caused by tighter liquidity. In a separate report, HSBC Holdings Plc reduced its recommendation on the nation’s shares to underweight from overweight as economic growth slows and the government places more emphasis on reform.

Companies that do business in Europe advanced. Nippon Sheet Glass gained 4.1%, Canon Inc. rose 1.7%.

Makers of cars and electric appliances provided the biggest support to the Topix as the yen dropped. A weaker yen boosts the value of overseas earnings at Japanese companies when repatriated. Mazda Motor Corp. added 3%, Toyota Motor Corp. climbed 2.1%, while Nintendo Co. rose 1.8%.

CyberAgent soared 10%, the biggest advance since Oct. 28, 2011, after Goldman resumed its buy rating on the shares with a price target of 330,000 yen.

Shinsei Bank gained 3.9%. Shinsei aims to boost consumer loans 33% by March 2016 as Japan recovers from an industry crackdown on excessive rates.

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