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MacarthurCook Industrial Property Fund (MIF) reported the sale of its entire stake in MacarthurCook Industrial REIT (MI-REIT), which is an industrial REIT listed on the Singapore Exchange for $6.7 million. MIF said the funds would be applied to the company’s debt and allow the company to focus on the Australian market more.

Fairfax Media Limited (FXJ) announced the resignation of David Evans from the company’s Board of Directors effective from Sunday, 15 November, 2009. The company said the Australian Communications and Media Authority informed Mr Evans that he could not continue to be a director of both Fairfax Media Limited and Village Roadshow Limited (VRL) because Village has a substantial shareholding in Austereo, which owns radio licences in some areas which overlap with radio licences held by Fairfax. 

E & A Limited (EAL) said its wholly owned subsidiary ICE Engineering & Construction Pty Ltd has been awarded a $5.2 million contract to supply labour, materials and equipment for the installation of electrical equipment and instrumentation associated with Uranium One’s Honeymoon Project in South Australia. The company said the project would require the provision of on-site services by a number of EAL subsidiaries. EAL said the contract win, in addition to recent contract successes announced to the market, reaffirmed the company’s outlook and supported forecast EAL turnover in excess of $160 million for FY10.

James Hardie Industries NV (JHX) reconfirmed its commitment to the Asbestos Injuries Compensation Fund (AICF) after the Australian Government announced it would provide a loan of up to $160 million to the NSW Government that would go towards a loan facility of up to $320 million to be made available by the NSW Government to meet a short-term funding shortfall. The company said the provision of the loan facility to the AICF does not reduce James Hardie’s obligations under the Amended and Restated Final Funding Agreement (AFFA).

CEO, Louis Gries, said based on its fiscal year 2010 results to date the company expects to make a contribution to the AICF, in accordance with the agreement, in 2010.

“We look forward to working with the NSW Government, the AICF and the Australian Government to finalise the facility,” Mr Gries added.

James Hardie said, under the FFA, it contributes a maximum of 35% of its annual net operating cash flow to the AICF.

Since the AICF was established in 2007, the company has contributed $302 million to the fund, in addition to $293 million being provided to the Medical Research and Compensation Foundation in 2001.

James Hardie said its is also contributing $500,000 a year for 10 years towards medical research into the prevention, treatment and cure of asbestos diseases, and $75,000 a year for 10 years for an education program to inform home renovators of the risks associated with asbestos.

As at 1040 AEDT, James Hardie shares were up 22c to $7.40.

Orica Limited (ORI) reported a net profit of $542 million for the full year to 30 September 2009, despite incurring expenses related to individually material items of $104 million. When not including one-off expenses, the chemical and explosives manufacturer reported a 13% jump in post-tax profit to $646 million.

Looking ahead, Orica said it expects earnings growth to continue in 2010.

”In light of the shape of the economic decline experienced in 2009, we anticipate first half conditions to be more difficult than those of the previous corresponding period,” the company said.

”Subject to the rate of global economic recovery and the extent of further adverse movements in exchange rates, we expect Group net profit after tax (pre individually material items) in 2010 to be higher than that reported in 2009,” the company added.

Looking at the company’s current latest result, Orica also reported sales revenue was up 13% to $7.4 billion.

Managing director Graeme Liebelt said the result was the fruition of a decade long strategic initiatives implemented by the company.

"It is that, combined with a tight control of the business fundamentals – cost, cash and productivity – that is at the core of the profit growth this year,” Mr Liebelt.

"To achieve double digit growth in earnings before interest and tax (EBIT) in this environment is an excellent result.”

Earnings per share, before individually material items, were $1.746c, up 3% on 2008, the eighth consecutive year of EPS growth.

Across the company’s divisions, Orica’s Mining Services sales were up 14% to $4.1 billion.

The chemicals business posted record results with sales up 10% to $1.5 billion and EBIT up 17% to $170 million, attributing the result to stronger demand for cyanide, which it expected to continue in 2010.

The proposed demerger of its Consumer Products, which has been renamed DuluxGroup, has been "indefinitely deferred”, the company added.

The board declared a final dividend of 57c per share.

At the open Monday, Orica shares were up 82c to $23.17.

AXA Asia Pacific Holdings Limited (AXA) advised that it has received and rejected an unsolicited and conditional scheme proposal from AMP Limited (AMP) and AXA Asia Pacific’s largest shareholder AXA SA. Under the proposal, which was received on Saturday, AMP would acquire all of the shares in AXA Asia Pacific, including those held by AXA SA, and the Asian operations of AXA APH would be sold to AXA SA.

The company said the part AMP share and part cash offer implied an offer price of $5.34 per AXA APH share.

AXA Asia Pacific chairman, Rick Allert, said it was a unanimous view that the proposal undervalued the insurer.

“The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability,” Mr Allert said.

“The non-financial terms of the proposal also imposed excessive uncertainty and risk on AXA APH's minority shareholders.”

Mr Allert said the company was well positioned to take advantage of the recovery in markets and to respond to the anticipated future regulatory changes.

AXA Asia Pacific said under the proposal its minority shareholders would receive 0.6896 AMP shares and $1.3796 in cash for each AXA share held.

”The value of the offer was uncertain and varied with any movement in the AMP share price and the Australian dollar / US dollar exchange rate,” the company said.

“Based on the closing AMP share price and the Australian dollar / US dollar exchange rate on Thursday 5 November 2009, being the date cited in the proposal, the implied value of the offer to AXA APH minority shareholders was approximately A$5.34 per AXA APH share, or A$5.17 per AXA APH share assuming the minimum cash component.”

At the close of trade Friday, AXA Asia Pacific shares were trading at $4.30, while AMP shares were trading at $5.87.

Commonwealth Bank of Australia (CBA) said its unaudited cash earnings for the September quarter was about $1.4 billion, with the result supported by good income growth and the group’s approach to cost management. The company said competition remain strong, particularly in deposits where margins are under pressure.

CBA said its impairment expense charge was approximately $700m, with credit quality trends generally moving in line with expectations

“Consumer arrears remained broadly stable, with improvements in the credit cards and Bankwest home loan portfolios offset by a slight increase in CBA home loans, driven, in part, by customer take-up of repayment “holidays” offered under the Group’s Customer Assist Programme,” the company said.

CBA said impaired assets increased slightly to 88 basis points of gross loans, while group Net Interest Margin improved slightly overall.

The company said its Tier 1 capital ratio strengthened to 8.7%, while liquid asset balances were maintained at approximately $87 billion.

“A continued prudent approach to wholesale funding, with unguaranteed long term debt issuance accounting for 70 percent of financial year-to-date funding,” CBA said.

CEO, Ralph Norris, said the result particularly benefited from an improvement in the company’s Wealth Management division as equity markets recovered through the quarter.

“Whilst the economic outlook has improved since our results in August, the pace and extent of the recovery remains unclear,” Mr Norris said.

”We will therefore continue to retain our conservative business settings until such time as a sustained improvement is evident.”

Mr Norris added that the operating environment remained challenging.

“Average funding costs are increasing, credit growth has slowed and competition remains strong,” he said.

“A number of our customers will continue to face financial hardship that will require our ongoing assistance and support.”

At the close of trade Friday, Commonwealth Bank shares were trading at $52.71.

By Greg Peel

The biggest official (central bank) holder of gold in the world is the US, with around 8,000 tonnes. Next in line is Germany with about 3.4kt, followed by the International Monetary Fund with 3.2kt. Then come France and Italy before China slips in ahead of Switzerland and Japan.

The gold "owned" by the IMF was contributed by the US and the legacy European central banks on the establishment of the Bretton Woods agreement after World War II. The agreement saw currencies pegged to the US dollar, which in turn was pegged to gold, and also saw the establishment of the IMF. The specific role of the IMF is to provide low-interest loans to poor nations suffering economic hardship. As one might imagine, demands on the IMF have leapt since the GFC hit as countries from Iceland to Pakistan stuck their hands out for assistance.

IMF membership has grown since World War II to include many more secondary and emerging economies. However voting rights are still very much biased toward the founding members, with the US firmly in control. Even before the GFC hit, the IMF had petitioned the US on several occasions to be allowed to sell some of its extensive gold holdings. The last time the IMF sold gold was in 1999 following the Asian Currency Crisis.

But each time the US refused. The reason it refused was because the IMF had become fat and lazy, building up a substantial cost base without increasing its activities to match. The Fund did not need to sell gold to fund some economic bail-out or other, it needed money to cover its expense account. The US instructed the IMF that it would only be granted permission to sell gold if and when it got its house in order. And under a new director, it did.

Which was just as well. No sooner had the new director taken up office but the GFC hit and the switchboard lit up like a Christmas tree. Again the IMF asked for permission to sell gold, and this time it was granted. Clearly the money was now needed for its intended purpose. The announcement was made earlier in the year that the IMF would sell 403t of gold, or one eighth of its holdings, and sale permission was ratified by members only last month.

The amount of 403t initially sparked some nervousness in the gold market, which feared the IMF would dump gold on a volatile market. But under the rules, the IMF could only sell gold in a phased manner over time in the general market, or sell it off-market to central banks. In the latter case, sales still had to be at market prices irrespective of volume, so not to upset gold prices and subsequently currencies.

In order to ensure the "phased manner" of sales, the 403t amount was to be included within the 400t per year quota of allowable gold sales under the Washington Agreement. The European central banks – collectively the world's largest holders of gold – are signatories to the Agreement. This meant it might even take five years for the IMF to ease out its 403t.

But speculation was soon rife that the 403t might simply go in one hit. China surprised the world earlier this year by revealing that since 2003, when its reported gold reserves were 600t, the central bank had acquired a further 454t without anyone knowing by buying only from domestic sources. China only recently became the world's biggest producer of gold. What's more, China's desire to buy gold did not stop there.

Despite the increase, China's gold reserves still only represent around 1% or so of total foreign reserves, of which around 70% are held in US dollar-denominated assets such as Treasury bonds and agency debt. Since the GFC hit, China has been the most vocal critic of excessive US government debt and its effect on the value of the dollar. But with so much invested in US dollars, China cannot afford just to pull the pin.

Instead, it has attempted to diversify away from the US dollar by buying assets in other currencies such as the euro when reinvesting its export receipts. It has also enacted cross-currency deals with the likes of Brazil and Russia for long term energy supply, cutting out the reserve currency altogether. And it has bought gold.

China would like to buy more gold. That's why the gold market fairly quickly assumed China would simply stick up its hand for all of the IMF's 403t in one hit. The race would indeed be on, because Russia had publicly stated its intention to increase its ratio of gold reserves from 2% to 10% and Brazil was sniffing about as well. But in the end it was the forgotten BRIC that moved first.

The announcement last night that the Reserve Bank of India had purchased 200t of the IMF's 403t suddenly sparked up a gold market previously very nervous about a bounce in the US dollar. Gold has recently rushed back through the US$1000/oz mark and beyond on ongoing US dollar weakness, but most recently it has wavered as the dollar has stalled. Last night's revelation saw gold shoot up around US$30 to around US$1085/oz – its highest ever nominal price. (Note that the 1980 previous high of US$850/oz represents more than US$2000/oz in today's dollars.)

India is no stranger to gold, being the world's largest private commercial buyer of the metal for the purpose of jewellery making, which in turn is driven by India's two annual gold-giving festivals. Of all the gold produced in the world each year, around 80% becomes jewellery. While 200t is a lot of gold, and certainly a very large volume to exchange hands in one hit, it still only represents 8% of average annual global production.

Indeed, at US$6.7bn in value the amount pales in comparison to the sort of money governments across the globe have been throwing at bank rescues. Only last night Royal Bank of Scotland accepted another injection of US$31bn from the UK government. Warren Buffet's Berkshire Hathaway offered to buy the Burlington Northern Santa Fe Railroad for US$34bn. As Gold Anti-Trust Action Committee secretary Chris Powell suggested this morning, the amount "seems like peanuts".

That hasn't stopped the world speculating on what might happen next.

The general opinion is that the transaction is positive for the gold price going forward as it crystallises the intentions of the BRICs and other countries beyond that which to date has been mostly chatter in relation to gold purchase plans. The bulk of the world's gold lies in the "Old World" of Europe and with the WWII saviour, the USA. Countries elsewhere across the globe have either sold a lot of the gold they once had, such as the UK and Australia, or simply never had much in the first place. The latter includes Asia, the Middle East and, ironically, South America (which had a lot once but had it stolen). With the reserve currency threatening to continue into a long devaluation phase, gold is the perfect foil.

As long as you can buy some without moving the market too dramatically. China was able to do this by buying only domestically, and sellers were no doubt under pain of death not to divulge. India has now been able to do so as well because the IMF hasn't a decent load to sell off-market. But while conducted off-market, the 200t was sold to India over a two-week settlement period which ultimately achieved a price average of US$1045/oz – the market price required by the IMF for such transactions.

In the week ending October 23, Bloomberg reports, India's foreign exchange reserves increased by US$684m to US$285.5bn, including currency assets of $268.3bn and gold reserves of US$10.3bn. At 3.6%, India's gold ratio would appear to have more room to move. And that's just what some are speculating.

A senior Indian finance ministry official told the Wall Street Journal the RBI may seek to buy more gold from the IMF directly. "It makes sense to buy gold as it will appreciate against the US dollar," he said. But an economist noted that India had little need to enact a major rebalancing of its US dollar asset holdings given most of India's external debt is also denominated in dollars.

If India was going to buy more from the IMF, why did it stop at 200t? Is it because China, Russia, Brazil or anyone else might also be negotiating for the balance? The IMF will not comment. Either way, given India's move it is unlikely the remaining 203t will last long.

But GATA's Chris Powell will not rule out another motive for India's gold purchase, beyond that of simple foreign reserve diversification. It "must be suspected", suggests Powell, that India intends to use the gold in an emergency intervention into currency markets in order to prop up the US dollar or the rupee. The Indian rupee is partially pegged to the dollar, which brings with it inflation implications.

In such a case the RBI would directly sell into the market the gold it bought indirectly in the off-market, thus affecting the gold price and currency movements. But again we note that US$6.7bn is not exactly a staggering amount, as Powell previously noted.

So the world is more likely to assume India's purchase is part of a greater world-wide shift back towards gold as a storage of wealth. Indeed, the seventh greatest holder of gold in the world, one place ahead of Switzerland, is now "the world", at least as far as the SPDR gold exchange traded fund holdings represent. The popularity of gold ETFs has surged in recent times.

It's a gold rush.

"In the market, perception is reality".

(BTIG Chief Market Strategist, Mike O'Rourke)

As far as market symbolism goes, one would be hard pressed to find a better example than Tuesday's announcement that Warren Buffett's investment vehicle, Berkshire Hathaway, wants to gain full ownership of US railway company Burlington Northern Santa Fe Corp. As far as symbolism goes for the much doubted US economic recovery, a company that facilitates goods transports across the US must be pretty much in the bulls eye of the discussion. And as far as investment nouse goes, Warren "the Oracle of Omaha" Buffett is pretty much the Champion amongst Champions in our life time.

Buffett's status was again confirmed in a poll conducted by Bloomberg last month, when professional investors voted him number one in the world as "the best assessor of financial markets", beating Bill Gross, the founder of bond manager Pimco, billionaire investor George Soros and reputed market bear Nouriel Roubini.

As far as Buffett's target is concerned, The Los Angeles Times reports "Burlington Northern is the nation's largest rail transporter of coal and grain and provides a vital link for consumer goods from Asia to the Midwest".

At a time when equity and commodity markets look very vulnerable, America's number two richest man (only preceded by Microsoft founder Bill Gates) is prepared to spend some US$27bn on an old school rail-transport company that will only flourish if the US economy heals from its present wounds.

Note: the widely reported US$34bn is the total value that reflects back on the company as a result of the public offer made. Berkshire Hathaway already owns a sizeable equity stake, so it only has to fork out US$27bn to achieve full ownership. You can blame the confusion on lazy journalism and the fact that nobody in the finance sector seems to have a natural urge to check such details, it's all just copy and reproduce these days.

In fact, digging down into the finer details of the deal teaches us that Berkshire Hathaway's intention is to only pay US$9bn in hard cold cash from its own funds. If the deal goes through, Berkshire would assume US$10 billion of BNSF debt, leaving it to pay some US$17 billion in cash, of which US$8bn would come from debt.

The symbolism doesn't stop here, not yet. The deal, if successful, will be Buffett's biggest-ever acquisition. Some commentators have already started to speculate that, because this deal is so big, it may prompt Berkshire Hathaway to sell some of its other investments. The statement issued to announce the deal stated "It's an all-in wager on the economic future of the United States".

There you have it, all the symbolism you ever wanted at this point of the cycle in one sentence to explain the "why" behind what one commentator described as the "greatest investor of the past half century placing the biggest bet of his career".

Berkshire Hathaway's takeover proposal offers a premium of 31.5% over BNSF's closing stock price on Monday, valuing the railroad at US$34bn. According to Thomson Reuters, this equals close to 20 times estimated 2010 earnings. More importantly, maybe, is that the offer trumps the mean price target set by some 18 stockbrokers covering the stock in the US. Most of them rated the shares Hold/Neutral. No doubt, all this will help to convince the likes of Capital Research, Vanguard, Barclays, UBS and State Street to hand in their shares in exchange for an unexpected, quick double digit-profit.

Some more details to lend more insight into Buffett's thinking: Burlington Northern has a fiscal year that runs until late December. So it is still in its fiscal 2009 year. On this year's forecasts, the Price-Earnings Ratio is 15.3. For 2010 it is a little less than 20 (19.8) – in other words, company profits are likely to take another dive first. On 2011 estimates Buffett is still paying 17.5 times consensus earnings per share. The number drops to 15.2 in FY12.

Note the similarity between PERs in 2009 and 2012.

Warren Buffett is a value-investor. The Bloomberg poll confirmed him as "the best assessor of financial markets", not as the world's greatest market timer. In October last year Buffett wrote a personal statement for the Op-Ed page of the New York Times. It was titled "Buy American. I Am."

I remember many stockbrokers in Australia sent it around to their databases in order to convince their clients that sitting on cash was not the smart thing to do. I doubt whether these stockbrokers had any success with their intentions at the time. After a brief uptick -some people called it a rally- the US share market tanked once again during the first two months of calendar 2009.

But we all know what happened after that.

Buffett's Op-Ed contribution last year starts with the sentence: "The financial world is a mess, both in the United States and abroad." But, continues Buffett, I have been buying American equities. Why?

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful."

"Fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now."

"Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month – or a year – from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."

Those who want to read the whole piece, they can at: http://www.nytimes.com/2008/10/17/opinion/17buffett.html.

Because of its wider-reaching symbolism, it is probably fitting that Warren Buffett announced the deal of his life, with the usual inherent characteristics, at the same time as Dalbar Inc released the results of its annual Quantitative Analysis of Investor Behavior in the US. It is my understanding that each and every survey since 1994 has shown that investors are by far not achieving the returns that market indices suggest they should, simply because they don't have the nerve to sit tight and wait for time to perform its wonders on sound investment decisions made. Instead, most cannot help but jump from momentum to momentum and collect so many costs in the process, or become one of the Johnny-come-latelies, they end up achieving lousy returns.

The financial sector had ultra-conveniently gone well overboard in its short-USD, long everything else market positioning. Global equity markets are at present paying the price for this. Investors should ask themselves whether this is the right message to take guidance from?

With these thoughts I leave you all this week,

Till next week!

Your editor,

Rudi Filapek-Vandyck

(as always firmly supported by the Ab Fab team at FNArena)

P.S. I – The no longer weakening US dollar remains the main game in town, as again illustrated by the chart below (thanks to BTIG Chief Market Strategist, Mike O'Rourke). To read more about the how and what about the US dollar's devastating role this time around, see various of my Weekly Insights and Rudi On Thursday-editorials over the past months in the FNArena archive on the website.

P.S. II – I note that on Wednesday's closing share prices, ANZ Bank ((ANZ)) shares are trading at 11.2 times FY11 consensus earnings per share, CommBank ((CBA)) is at 12.5, and National ((NAB)) is at 10.4. Westpac's ((WBC)) forecasts will rise over the next few days post its FY09 report. BHP Billiton ((BHP)) is at 13.9 at today's AUD/USD value. Bradken ((BKN)) is at 10.2. Orica ((ORI)) is at 11.6. Downer EDI ((DOW)) at 12.6. For more insights see Stock Analysis and R-Factor on the FNArena website.

P.S. III – This one is for the momentum seekers among you. Analysts at RBS Morgans are keeping a close eye on any announcements by Silex Systems ((SLX)). At present, their price target of $8.11 is well above the share price, but… a decision on the commercialisation of the company's Uranium Enrichment program by Global Laser Enrichment (GLE) is expected before Christmas. If positive, RBS Morgans expects the shares to re-rate well past its present target. As always, no guarantees are included. Only investors with a big appetite for risk need to consider.

P.S. IV – The TechWizard confided to me on Wednesday morning he's concerned investors in the share market may miss out on the end of year rally for a third year in a row. From a technical point of view, says the Wizard, the Dow Jones Industrial Average has now tried to puncture four times through a support line that dates from August this year.

This seems to indicate that the bears will continue trying and that at some point technical support will give in. Such event will trigger a wave of selling, predicts the Wizard, not only because many short term traders will instantly reverse their attitude towards the direction of market, but so too will all automated trading programs that have been supporting US equities throughout the post-March rally. This could get ugly, says the Wizard.

For good measure: the Wizard believes one more rally that will take the market to a new high seems the most plausible scenario, but after that it might get really ugly.

Directors' Interest Notices
6 November 09

* Exercise of Unlisted Options

Substantial Shareholder Changes 
06 November 09

All movements are percentage changes

For Director Changes click here.

Wall Street made ground Friday on hopes the unemployment rate has peaked at a 26-year high. Analyst upgrades and gains from energy heavyweights boosted the broader indices. 

In economic news, according to the Labor Department 190,000 jobs were cut in October. Expectations were for 175,000 jobs to be lost after 219,000 were cut in September. The unemployment rate increased from 9.8% to 10.2% in October.

The Dow Jones added 17.46 points, or 0.17%, to 10,023.42, the S&P 500 put on 2.67 points, or 0.25%, to 1,069.30 and the NASDAQ gained 7.12 points, or 0.34%, to 2,112.44.

Heavyweight banks weakened. Bank of America, Wells Fargo and JPMorgan lost between 0.5% and 0.9%.

American International Group slumped 9.7% despite reporting its second consecutive quarterly profit. The major concern with the result was weaker than expected revenue from its main insurance businesses.

Fannie Mae tumbled 7.1% after reporting a quarterly loss of almost $19 billion and revealing it requires further assistance from the Treasury.

General Electric climbed 6.2% following to broker upgrades on the conglomerates stock.

Amazon.com rallied 4.6% on a broker upgrade.

All of the tech majors were within 1% of the gain line, including Apple and Microsoft which put on 0.2% each.

Energy stocks defied a fall in the price of crude. Exxon Mobil, ConocoPhillips and Chevron added between 0.1% and 0.4%.

NYMEX light crude oil for December delivery fell US$2.19 to settle at US$77.43 a barrel.

COMEX gold for December delivery climbed US$6.40 to settle at US$1,095.70 an ounce.

European Markets

European markets ended the week higher after being in the black for three consecutive days. A strong lead from banks led markets higher Friday. 

The UK benchmark FTSE 100 added 17.08, or 0.33% to 5,142.72. The French CAC40 dipped 1.44 points, or 0.04% to 3,707.29, while the German DAX gained 7.33, or 0.13% to 5,488.25.

Royal Bank of Scotland climbed 5.3% after it revealed third-quarter losses had more than halved due to a drop in impairments.

Standard Chartered and HSBC put on 2.5% and 2.1%, while in Germany Commerzbank advanced 1.2%.

Société Generale and BNP Paribas rallied 2.1% and 1.5%.

UK miners bounced. Rio Tinto, Antofagasta and Anglo American were between 1.5% and 1.8% higher.

BHP Billiton and Xstrata added 0.2% and 0.8%.

Energy heavyweights BG Group, Royal Dutch Shell and BP shed 1.6%, 0.7% and 0.6% respectively. Total edged 0.3% lower.

British Airways jumped 6.7% after posting a better than expected first-half loss. Air France gained 1.2%.

Daimler rose 1.7% after the automaker reported a 7% jump in sales during August at its Mercedes-Benz brand.

Volkswagen added 1.3% and Renault fell 1.1%.

Japanese Markets

Japan’s Nikkei closed higher at the end of a mixed day. Falls within the financials sector were countered by gains among exporters.

The Nikkei 225 gained 71.91, or 0.74% to 9,789.35.

Pioneer Corp spiked 9% following a broker upgrade. NEC Corp climbed 10.1%.

Heavyweight banks Mizuho Financial Group and Sumitomo Mitsui Financial Group lost 1.1% and 0.3%.

Sumitomo Trust and Banking Co and Chuo Mitsui Trust Holdings Inc shed 0.8% and 2.2% amid talks of a merger.

T&D Holdings sank 10.1% after the insurer revealed it would need to raise capital as a means of repaying debt.

Exporters rallied on the back of positive economic data out of the US Thursday. Canon and Sony gained 1.8% and 1.6%.

Bridgestone weakened 3.3% after the tyremaker said it expects to report a loss for the year following recent plant closures.

Hong Kong Markets

The Hang Seng closed higher Friday following gains from both the mainland index and US markets. Banks and oil stocks all added to gains.

The Hang Seng rose 350.64, or 1.63% to 21,829.72.

Bank of China rose 1.6%. Bank of Communications added 2.5%, while ICBC rose 1.7%.

HSBC put on 1.9%.

Among retail clothing manufacturers, shoemaker Yue Yuen climbed 2.4%. Li & Fung put on 0.5%.

China Unicom added 3.3% after announcing it had signed up more than one million new subscribers.

Industrial heat materials manufacturer Greens spiked 12% after selling new shares.

CNOOC, China’s offshore oil giant, added 3.7% as it continues it climb following its foray into US oil assets.