March 11 (Bloomberg) -- Asian stocks surged, with the benchmark index rising the most in six weeks, after Citigroup Inc. said it’s having its best quarter since 2007, sparking a global rally in bank shares.
“A tailwind is blowing for the market here from the hope of Citigroup’s recovery,” Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. “Stocks have been oversold relative to corporate intrinsic value.”
The MSCI Asia Pacific Index added 2.6 percent to 73.14 as of 10:14 a.m. in Tokyo, the sharpest jump since Jan. 27. The gauge has slumped 19 percent this year, extending last year’s record 43 percent slump as the global recession decimated corporate profits
Citigroup was profitable in January and February and is having its best quarter since the third quarter of 2007, Chief Executive Officer Vikram Pandit wrote in an internal memorandum.
HSBC Holdings Plc, Europe’s biggest bank, had a “good” January and doesn’t need government support, Asia Chief Executive Sandy Flockhart said yesterday. Flockhart said today he’s “110 percent confident” that the bank’s rights offer will succeed, and that he’s seen “positive take-up” from institutional investors.
Governments around the world have stepped up efforts to revive economies hurt by the financial turmoil caused by the subprime mortgage crisis in the U.S. The Yomiuri newspaper reported today Japan’s government may propose a new economic plan as early as this month.
Malaysia yesterday unveiled an additional $16 billion in spending and tax incentives over the next two years to prevent the economy from sinking into recession for the first time in a decade. Chinese Premier Wen Jiabao reiterated last week the government’s pledge to “significantly increase” investment in 2009. He didn’t specify new stimulus spending in addition to a 4 trillion yuan ($585 billion) plan announced in November.
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