Asian Stocks Fall for Fourth Week on Credit, Economic Concerns

By Kyung Bok Cho

Aug. 23 (Bloomberg) -- Asian stocks fell for a fourth week, dragging the region's benchmark index to the lowest since July 2006, after technology companies and banks dropped on renewed concern credit-market turmoil and higher oil prices will hurt profits.

Samsung Electronics Co., the world's biggest computer- memory maker, fell 4 percent after U.S. wholesale prices rose and housing starts decreased. Sumitomo Mitsui Financial Group Inc. lost 6.9 percent after Citigroup Inc. predicted more losses at U.S. banks. Singapore Airlines Ltd., Asia's most profitable carrier, lost 2.5 percent.

``Consumer spending is shrinking from rising oil prices and higher inflation is increasing the costs of companies,'' said Choi Min Jai, who helps manage about $5 billion at KTB Asset Management Co. in Seoul. ``It doesn't help that this is happening while the subprime problem in the U.S. seems to be getting worse.''

The MSCI Asia Pacific Index lost 2.6 percent to 121.62 this week, the lowest since July 21, 2006. It's dropped 23 percent this year as soaring food and fuel prices threatened consumer spending and corporate profits, while writedowns and credit losses at the world's largest financial companies topped $500 billion.

Japan's Nikkei 200 Stock Average dropped 2.7 percent. Benchmark indexes declined in most markets.

Samsung slipped 4 percent to 557,000 won in Seoul. Nintendo Co., the maker of the top-selling video-game console, declined 5.2 percent to 49,200 yen in Osaka.

Banks Decline

U.S. housing starts slumped 11 percent last month to the lowest level in 17 years, the government said. Prices paid to U.S. producers in July rose 1.2 percent on escalating energy costs, doubling economists' projection of 0.6 percent.

Sumitomo Mitsui, Japan's second-largest publicly traded bank, fell 6.9 percent to 637,000 yen. The four-week decline is the longest losing streak since the period ended Jan. 4. Commonwealth Bank of Australia, Australia's biggest mortgage lender, lost 5.3 percent to A$41.38.

Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. will write down a combined $6.4 billion in the third quarter, Citigroup analyst Prashant Bhatia said. Separately, HSBC Holdings Plc cut its rating on Sumitomo Mitsui shares to ``underweight'' from ``overweight.''

Banks also fell on speculation the U.S. will bail out Freddie Mac and Fannie Mae, the country's biggest home-loan financiers, after Barron's reported the government expects them to fail to raise enough equity to offset credit losses.

Babcock Plunges

A bailout ``adds to the speculation that no one really knows the extent of assets that were infected by the subprime contagion,'' said Olan Caperina, who helps manage about $6.7 billion at BPI Asset Management Inc. in Manila.

Singapore Airlines slid 2.5 percent to S$14.88, the biggest weekly loss since July 4. Korean Air Lines Co., the largest South Korean carrier, declined 7.4 percent, to 41,150 won.

Crude oil rose 0.8 percent to $114.59 a barrel in New York this week. Jet fuel is typically the biggest expense for Asian airlines.

Babcock & Brown Ltd., the worst-performing stock on the regional benchmark this year, tumbled 44 percent to A$2.48, a record low, after the appointment of Chief Executive Officer Michael Larkin failed to convince investors the company can be saved. Babcock is selling assets at a loss to reduce debt after bankers raised interest rates following a slump in the shares.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net