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Distributed: Feb 16, 2009

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Sydney, Feb 16, 2009 (ABN Newswire) - Asian major indexes were higher Friday after a late-day recovery in the U.S. market. Japan's Nikkei 225 closed up 0.96%, while Korea's Kospi ended 0.5% higher. Shanghai Composite surged 3% to over 2300 points, Hong Kong's Hang Seng Index added 2.47% and Taiwan's main index up 2.1%.

Today Tokyo stocks opened mixed after the latest gloomy GDP figure showed that Japan's economy contracted in the October-December quarter at the fastest pace in about 35 years.

Asia Economy Watch

Japan's economy shrank at its sharpest pace in over three decades in the final quarter of 2008. The Gross domestic product fell by an inflation-adjusted 3.3% in October-December from the previous three months, or 12.7% on an annualized basis. The government is considering a large-scale supplementary budget for fiscal 2009 to carry out additional stimulus measures in response to the rapid economic deterioration.

People's Bank of China is not likely to take a further cut on its interest rates as the central bank said a zero or near-zero interest rate policy was not the best option for the country. The current benchmark deposit rate stands at 2.25 per cent.

South Korean banks said they will use the KRW20 trillion bank recapitalization fund to support restructuring in the corporate sector and domestic economy. The banks have decided to roll over corporate loans that will mature, except for businesses that are bankrupt, the Financial Services Commission and the Korea Federation of Banks said in a joint statement.

Company News

Bank of East Asia (HKG:00023) is tipped to announce a more than 90% decline in net profit for last year on the disposal of its collateralized debt obligation exposure.

China Aviation Oil (Singapore) Corp. (SIN:C47) warned that it expects a net loss for the fourth quarter of 2008 due to costly jet fuel inventories procured at Shanghai Pudong Airport even as oil prices fell in the quarter, although it will remain profitable for FY2008.

Nippon Paper Group Inc. (TYO:3893), Japan's second-largest paper maker, admitted Monday that it is considering buying PaperlinX Ltd.'s (ASX:PPX) Australian Paper unit to expand its foreign business, but nothing has been formally decided.

DBS Group Holdings Ltd. (SIN:D05) reported a 40% drop in fourth-quarter net profit as the deteriorated economy led to the continued fall in fees and commissions and a rise in bad debt. Fourth-quarter net profit was 295 million Singapore dollars, down from S$491 million a year earlier, DBS said.

China Pacific Insurance (Group) Co. (SHG:601601), said Monday it collected CNY11.2 billion in premium income in January, down 5% from a year earlier.

Sanyo Electric Co. (TYO:6764) said it will build a solar battery plant in Osaka, Western Japan, for Y6 billion to be opened by the end of 2010. The plant will bring the company's total production capacity of solar batteries to 600 megawatts by that fiscal year from the current 340 megawatts.

China's oil and gas giants, including China Petroleum & Chemical Corp (SHA:600028)(NYSE:SNP), China National Offshore Oil Corp and China National Petroleum Corp, are waiting on government to select one of them as frontrunner to launch a bid of at least US$3 billion for the principal asset of United States-based Kosmos Energy, market sources said.


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Contact

Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net

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