Asian bourses rise as UK may privatize failing lender

ASIAN stocks rose yesterday, reversing earlier declines, after the Daily Telegraph in London reported that Britain has drafted a bill to nationalize Northern Rock Plc, boosting confidence that losses from United States subprime mortgages will be contained.

Mitsubishi UFJ Financial Group Inc, Japan's biggest lender by value, led gains by banks. Samsung Electronics Co advanced after memory-chip prices climbed, increasing expectations that a five-month slump may be over.

"The UK is acting quickly with plans to nationalize Northern Rock," said Mitsushige Akino, who oversees US$468 million in assets at Ichiyoshi Investment Management Co in Tokyo. "We can take some comfort from that."

The MSCI Asia Pacific Index added 0.3 percent to 162.64 at 3:54pm in Tokyo, while Japan's Nikkei 225 Stock Average added 0.8 percent. Both reversed declines of as much as 0.7 percent. Most markets in the region rose, according to Bloomberg News.

Canon Inc led Japanese exporters higher after the yen weakened against the dollar. BHP Billiton Ltd, the world's largest mining company, fell after metals prices slid.

The MSCI Asia Pacific Index dropped as much as 11 percent from its November 1 record amid speculation rising losses tied to investments in US subprime mortgages will slow growth in the world's largest economy.

The MSCI index had fallen as much as 0.7 percent earlier yesterday after JPMorgan Chase & Co forecast more writedowns at US security firms.

Mitsubishi UFJ jumped 2.7 percent to 1,152 yen (US$10.43). Mizuho Financial Group Inc, Japan's second-biggest bank, added 1.8 percent to 614,000 yen, after slumping 2.7 percent earlier. Westpac Banking Corp, Australia's fourth-largest lender, climbed 0.8 percent to A$28.38 (US$24.99).

Northern Rock, the UK mortgage lender bailed out by the Bank of England three months ago as the subprime mortgage security market collapsed, could be nationalized as early as February if a private bidder isn't found, according to the Daily Telegraph.

Samsung, Asia's biggest maker of semiconductors, jumped 1.2 percent to 582,000 won (US$630.25).