Japanese stocks rose, led by lenders, after UFJ Holdings Inc. said it is seeking to accelerate the sale of its trust bank to Sumitomo Trust & Banking Co., which would raise at least $2.8 billion. The Topix index climbed 0.8 percent to 1144.29 at 2 p.m. in Tokyo, with a measure tracking the performance of lenders rising for the first day in seven. The Topix is set to end a six-day drop, its longest losing streak in 16 months. The Nikkei 225 Stock Average added 0.8 percent to 11,412.45. ``The merger is good for UFJ Holdings in that it will profit from the sale of its unit,'' said Hideaki Kurimoto, who helps manage $2.8 billion, including shares of Sumitomo Trust, at Meiji Dresdner Asset Management Co. in Tokyo. That ``prompted some short- term investors to scoop up recently battered bank stocks.''
The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, added 0.8 percent to 90.23. The index is on course for a second week of declines, as are benchmarks in South Korea and Taiwan. South Korea's LG Electronics Inc. gained after its LG.Philips LCD Co. venture had an almost fourfold jump in quarterly profit, lifted by demand for its liquid-crystal displays. Taiwan Semiconductor Manufacturing Co. and Chi Mei Optoelectronics Corp. advanced in Taipei after they reported sales surged in June. Airlines shares dropped on concern an increase in crude-oil futures to a month-high may boost costs at Korean Air Co. and China Airlines. All other benchmarks in the region declined, except those in Hong Kong, South Korea and Taiwan.
Trust Bank Merger
UFJ, Japan's fourth-largest bank, climbed 6.3 percent to 458,000 yen, set for its biggest jump since June 11. Sumitomo Trust, the country's sixth-largest lender by assets, advanced 3.3 percent to 742 yen. In May, Sumitomo Trust had said it would take over UFJ Trust Bank Ltd.'s corporate pension and real estate businesses by March 2005, and its retail operations by the end of that year, for at least 300 billion yen. UFJ, the only one among Japan's four biggest lenders to post a loss last fiscal year, said it hasn't decided on a merger date for its trust unit with Sumitomo Trust. The Nihon Keizai newspaper reported earlier the trust bank transaction may be completed this year. Speeding up the takeover will provide UFJ with some funds it needs to meet a government target of disposing of 2.35 trillion yen ($22 billion) of bad loans, half its total, by March 31, said Jason Rogers, a credit analyst at Barclays Capital in Tokyo. UFJ had to sell one of its two main businesses to bolster capital after posting its third consecutive annual loss.
Rising Profit, Sales
LG Electronics, South Korea's No. 2 electronics maker, advanced 3.8 percent to 52,500 won. LG.Philips, a venture between LG Electronics and Royal Philips Electronics NV of the Netherlands, said net income rose to 701 billion won ($609 million) from 183 billion won a year earlier. LG.Philips, the world's second-largest maker of liquid crystal displays, plans to sell its shares to the public in Seoul and New York next week. Taiwan Semiconductor rose 1.6 percent to NT$45.70. The world's largest supplier of made-to-order computer chips said June sales increased to a record NT$22.5 billion from NT$17.8 billion a year earlier. Chi Mei Optoelectronics surged 5.9 percent to NT$52.50. Sales at Taiwan's second-largest maker of flat-panel displays more than doubled in June from a year ago to NT$9.88 billion. ``Entering July, we'll gradually get more information on how strong the annual high export season will be and I am not too pessimistic,'' said Jim Chang, who manages the equivalent of $24 million at Barits Securities Investment Trust Co. ``The oil price rise is always an annoying factor that will continue to add to corporate costs and sour sentiment.''
Airlines drop
Korean Air, South Korea's largest air carrier, dropped 1.4 percent to 14,000 won, while Asiana Airlines slid 0.5 percent to 2200 won. China Airlines, Taiwan's largest carrier, declined 1.1 percent to NT$18.60. Jet fuel, which typically accounts for about 20 percent of an airline's costs, is the second-biggest expense after labor. Crude oil for August delivery climbed 3.2 percent to $40.33 a barrel, its first close above $40 in five weeks. Crude oil gained on concern about possible supply disruptions in Russia, Iraq, Nigeria and other exporting countries. It traded at $40.35 as of 11:04 a.m. Singapore time. ///www.bloomberg.com