Asian Stocks Drop This Week as Banks Fall; Chip Shares Climb
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By Shani Raja and Jonathan Burgos
Dec. 12 (Bloomberg) -- Asian stocks fell for the third week in four, led by Japanese banks, after the nation’s economy grew more slowly than estimated. Technology shares rose on optimism a U.S. economic recovery will bolster demand.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, sank 8.3 percent. Santos Ltd., Australia’s third-biggest oil and gas producer, fell 7.7 percent after saying output next year may drop. Elpida Memory Inc., a chipmaker, surged 9.8 percent in Tokyo as U.S. jobless claims fell to a one-year low. Maanshan Iron & Steel Co., the No. 2 Chinese mill listed in Hong Kong, climbed 9.8 percent after China’s industrial production increased.
“Emerging markets will continue to lead growth in the world economy next year, and companies that can make money in those markets will remain in the spotlight,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees the equivalent of $96 billion.
The MSCI Asia Pacific Index fell 0.4 percent this week to 119.68. The gauge’s 5.5 percent gain the previous week was its steepest climb in seven months. Japan’s Nikkei 225 Stock Average added 0.9 percent this week, while South Korea’s Kospi Index climbed 2 percent.
Hong Kong’s Hang Seng Index fell 2.7 percent and the Shanghai Composite Index retreated 2.1 percent. Australia’s S&P/ASX 200 Index lost 1.4 percent, even after a government report showed the country’s jobless rate dropped.
Global Recovery
The MSCI gauge has climbed about 34 percent this year, set for its biggest annual gain since 2003, on signs government spending and lower interest rates bolstered economies. Stocks in the benchmark trade at 22 times estimated earnings, compared with 18 times for the Standard and Poor’s 500 Index in the U.S. and 15 times for the Dow Jones Stoxx 600 Index in Europe.
The S&P 500 added 0.4 percent yesterday as the China industrial production report and better-than-estimated data on U.S. consumers bolstered optimism the global economic recovery is strengthening. U.S. retail sales rose 1.3 percent in November, the Commerce Department said, while the Reuters/University of Michigan index of consumer confidence climbed to 73.4.
Concerns about the health of the global economy had dragged on Asian stocks this week. Japan’s Cabinet Office said the economy expanded less than initially estimated in the third quarter. Downgrades to Greece’s credit rating exacerbated credit-market concerns sparked by Dubai World’s plan to reschedule its debt payments.
Growth Revision
Mitsubishi UFJ dropped 8.3 percent to 455 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest bank by value, lost 6.6 percent to 2,710 yen. Mizuho Financial Group Inc., the No. 3, sank 5.9 percent to 159 yen.
Japan’s gross domestic product rose at an annual pace of 1.3 percent, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said on Dec. 9. The revised figure was also lower than the predictions of all but one of the 17 economists surveyed by Bloomberg News.
Fitch cut Greece’s credit rating by one notch to BBB+, the third-lowest on the investment-grade scale, and said the outlook for the rating is negative. Standard & Poor’s put the country’s rating on watch for a downgrade.
In Hong Kong, Standard Chartered Plc declined 5.4 percent to HK$188.20. CLSA Asia-Pacific Markets cut its recommendation on the stock to “sell” from “underperform.” It was CLSA’s second downgrade of Standard Chartered in two weeks after Dubai World attempted to reschedule its debt.
Santos, Woodside
“People are becoming more sensitive to risks and they are reconsidering investments,” said Mitsushige Akino, who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co.
Santos plunged 7.7 percent to A$13.75 in Sydney. The energy company said output may slip next year and spending may rise by 75 percent as it develops liquefied-natural-gas projects in Australia and Papua New Guinea. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, sank 3.9 percent to A$47.18.
Newcrest Mining Ltd., the nation’s largest gold producer, fell 8.6 percent to A$35.02 as the metal’s price dropped for the second week. In Hong Kong trading, Zijin Mining Group Co., China’s largest gold producer, declined 5.8 percent to HK$8.24.
Elpida Memory, Japan’s biggest computer memory-chip maker, advanced 9.8 percent to 1,331 yen. A U.S. government report this week showed the four-week average number of Americans filing for jobless benefits declined to a one-year low.
Increased Appetite
Hitachi Kokusai Electric Inc. surged 16 percent to 779 yen, as Nomura Holdings Inc. also boosted its rating on Japan’s semiconductor-production-equipment industry to “bullish” from “neutral.” Samsung Electronics Co., the world’s largest maker of computer-memory chips, rose 3 percent to 785,000 won in Seoul.
“Exporters will benefit at the margin from a more robust U.S. economy and its perceived increased appetite for imports,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne.
Maanshan Iron & Steel advanced 9.8 percent to HK$5.96 in Hong Kong. Angang Steel Co., China’s largest Hong Kong-listed steelmaker by market value, jumped 8.2 percent to HK$17.74.
China’s industrial production rose 19.2 percent in November from a year earlier, exceeding the 18.2 percent estimated by economists. New lending grew month-on-month, the People’s Bank of China said yesterday, while economists had forecast a decline.
To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
Last Updated: December 11, 2009 22:13 EST
