Asian Stocks Decline, Led by Shipping, Commodities Companies

By Chua Kong Ho and Ian C. Sayson

Sept. 4 (Bloomberg) -- Asian stocks fell for a fourth day, led by shipping and commodities companies, after marine transport rates slumped on concern demand for raw materials will slow.

Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping company, dropped 7.3 percent while Newcrest Mining Ltd. lost 6.5 percent. Asahi Glass Co., the world's No. 2 maker of glass used in liquid-crystal displays, slipped 3.4 percent after U.S. rival Corning Inc. cut its earnings estimates. China Communication Construction Co., a port builder, slumped 14 percent after CLSA Ltd. and Citigroup Inc. lowered their rating to ``sell.''

``The signs are there that demand and growth are slowing,'' said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion in assets worldwide. ``That's having a dampening effect on the market.''

The MSCI Asia Pacific Index lost 1 percent to 119.39 at 3:24 p.m. in Tokyo, adding to a three-day, 3.7 percent decline. The measure is headed for its lowest since July 19, 2006. Nine of the 10 industry groups on the index fell, with about three stocks declining for every one that rose.

Asia's benchmark stock index has retreated 24 percent this year, almost twice the S&P 500 Index's decline, as a slowdown in global growth threatens profitability for the region's exporters. Australia's trade balance unexpectedly turned to a deficit in July as oil imports surged and exports fell, data today showed.

Japan's Nikkei 225 Stock Average fell 1 percent to 12,557.66. Hino Motors Ltd., Japan's largest maker of heavy-duty trucks, sank 8.4 percent after Lehman Brothers Holdings Inc. cut its rating on the company.

Shipping Rates

South Korea's Kospi Index was little changed. Hanjin Heavy Industries & Construction Co., the first South Korean yard to build vessels for overseas customers, surged 6.7 percent after winning a $339 million contract to build two oil tankers.

Most markets open for trading in Asia fell.

U.S. stocks fell for a third day, sending the S&P 500 to a 0.2 percent decline. S&P futures were little changed today.

Mitsui O.S.K. declined 7.3 percent to 1,116 yen, the most since Feb. 6, after the Baltic Dry Index, a measure of commodity shipping rates, tumbled 5 percent yesterday on concern China's demand for imports of iron ore will weaken.

UBS AG cut its outlook today for container shipping stocks to ``negative,'' citing ``decelerating demand growth, excessive supply, and aggressive price competition.''

Nippon Yusen KK, Japan's largest shipping line by sales, fell 5 percent to 787 yen. China Cosco Holdings Co., the world's largest operator of iron-ore and coal vessels, tumbled 6.4 percent to HK$12.38, extending yesterday's 9.5 percent drop.

Asahi Glass

Asahi Glass slumped 3.4 percent to 1,068 yen. Corning, the biggest maker of glass for flat-panel displays, cut its third- quarter earnings and sales estimates as TV makers trim orders. Nippon Electric Glass Co., the world's No. 3 maker of glass for flat-screen televisions, dropped by the 14 percent maximum to 1,225 yen. LG Display Co., the No. 2 maker of LCDs, yesterday said it will extend a reduction in flat-panel production.

``With wage growth stagnant, people are holding back from replacing their TVs with new ones,'' said Hisakazu Amano, head of fund management at T&D Asset Management Co., which oversees the equivalent of $39 billion. ``Once sentiment turns sour, investors can't stop focusing on negative factors in the market.''

China Communications Construction tumbled 14 percent to HK$10.74, the most since Jan. 22, after CLSA cut its rating to ``sell'' from ``buy.'' Citigroup reduced its price estimate by 23 percent and also downgraded the stock to ``sell'' from ``neutral,'' citing a slowdown in investment growth and higher raw materials costs.

Hino, Hanjin

Hino Motors tumbled 8.4 percent to 488 yen, after Lehman Brothers Holdings Inc. cut its rating to ``equal-weight'' from ``overweight,'' citing a cutback in production of sport-utility vehicles in North America.

Hanjin Heavy gained 6.7 percent to 27,200 won, the third- biggest percentage gain on the MSCI Asia Pacific Index, after receiving a contract to build two so-called Very Large Crude Carriers from the United Arab Emirates.

Newcrest Mining, Australia's largest gold mining company, declined 6.5 percent to A$21.14, the lowest since July 4, 2007. Zijin Mining Group Co., which owns China's largest gold mine, lost 1.1 percent to HK$4.47.

Gold futures for December delivery fell $2.30, or 0.3 percent, to $808.20 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing price for a most- active contract since Aug. 18.

Samsung, Ito En

Samsung Electronics Co., Asia's largest flat-panel maker, lost 2.5 percent to 514,000 won, after the Korea Economic Daily said the company won't buy back its own shares this year for the first time since 2001, citing an unidentified company official.

Ito En Ltd., Japan's biggest maker of green-tea beverages, had the biggest percentage decline on the MSCI World Index, slumping 16 percent to 1,422 yen. Profit for the three months ended July 31 fell 59 percent to 1.08 billion yen ($9.97 million), due to weak drink sales and high materials costs, the company said yesterday. Mizuho Securities Co. cut its rating to ``reduce'' from ``hold.''

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net