Asian Stocks Post Biggest Weekly Slump in 13 Months; BHP Drops

By Chen Shiyin

Sept. 6 (Bloomberg) -- Asian stocks fell, driving the region's benchmark index to its largest weekly drop in 13 months, on concern that slowing global economic growth will dent demand for raw materials and other goods.

BHP Billiton Ltd. and Cnooc Ltd. plunged more than 10 percent this week after metal and crude oil prices tumbled. LG Electronics Inc., the world's No. 3 television maker, dropped 7.4 percent after a slump in South Korea's overseas shipments sparked fears of an economic slowdown. Hon Hai Precision Industry Co. lost 11 percent, leading technology companies lower, following its first earnings decrease in seven years and as U.S. consumer spending waned and jobless claims increased.

``It's been a painful last couple of months,'' said Ivan Leung, Hong Kong-based chief investment strategist at JPMorgan Private Bank, which oversees $400 billion in assets globally. ``The economic uncertainty means there'll be massive pressure on commodity stocks in the short term.''

The MSCI Asia Pacific Index dropped 6.7 percent to 116.85, the biggest slump since the five days ended Aug. 17, 2007. All 10 industry groups retreated, with measures tracking energy and mining companies posting the biggest losses.

The regional gauge has dropped 26 percent this year to the lowest since June 13, 2006, as soaring fuel prices damped consumer spending and eroded corporate profits, while writedowns and credit losses at the world's largest financial companies topped $500 billion.

Japan's Nikkei 200 Stock Average fell 6.6 percent to 12,212.23, while the Kospi index dropped 4.7 percent in South Korea. Hong Kong's Hang Seng Index plunged 6.3 percent to close below 20,000 for the first time since April 2007. Thailand's SET Index tumbled 5.7 percent after Prime Minister Samak Sundaravej declared a state of emergency.

Metals, Oil

BHP, the world's largest mining company, tumbled 11 percent to A$37, its largest weekly loss since the five days ended March 21. Rio Tinto Group, the third-biggest mining company, retreated 14 percent to A$110.80.

A measure of six metals traded on the London Metal Exchange dropped 6.5 percent as the slowdown in the OECD deepened, adding to speculation that world demand will ease. Meanwhile, crude oil for October delivery retreated 8.0 percent this week to $106.23 a barrel in New York, the lowest since April 4.

Cnooc, China's largest offshore oil explorer, lost 13 percent to HK$10.44 in Hong Kong. Inpex Holdings Inc., Japan's biggest oil explorer, declined 13 percent to 1.03 million yen.

No Place to Hide

``There no place to hide within Asia right now,'' said Beat Lenherr, who oversees more than $20 billion of assets as Singapore-based chief global strategist at LGT Capital Management. ``We're cautious on the commodities sector given there is an intermediate peak in oil prices, which will put a lid on energy-related stocks.''

LG Electronics fell 6.8 percent to 94,600 won, its third straight weekly retreat. South Korean exports, which make up more than half of gross domestic product, rose 20.6 percent in August from a year earlier, missing the 23.3 percent median estimate of economists surveyed by Bloomberg News.

Speculation that investors are avoiding the nation's assets as economic growth falters sent South Korea's won down by 2.6 percent this week, its biggest weekly loss since August 1998. The rout in share prices and the currency prompted finance ministry officials to say that rumors the country is facing a financial crisis are groundless.

Kookmin Bank, South Korea's largest bank, fell 6.5 percent to 56,000 won. Woori Finance Holdings Co., which controls the nation's second-largest bank, plunged 9.3 percent to 13,100 won.

Hon Hai, Elpida

Hon Hai, the world's largest contract manufacturer for customers including Apple Inc. and Dell Inc., tumbled 11 percent to NT$143, its biggest weekly loss since a similar period ended Dec. 14. Second-quarter profit fell 24 percent from a year earlier and missed all eight analyst estimates in a Bloomberg News survey, prompting analysts at Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley to cut their price estimates for the stock.

The shares also fell after the U.S. Commerce Department said last week that consumer purchases rose in July at a third of the previous month's pace, while prices surged the most in 17 years.

The number of people staying on jobless rolls rose to 3.435 million in the U.S., the highest since November 2003, in the week ended Aug. 23, the Labor Department said on Sept. 4. European central bank President Jean-Claude Trichet said on the same day the economy is undergoing an ``episode of weak activity.''

Elpida Memory Inc., Japan's largest memory-chip maker, plunged 19 percent to 1,934 yen, a record low. Nomura Securities Co. cut on Sept. 2 its rating for the shares to ``neutral'' from ``buy'' on concern a slump in demand for the devices will be longer than expected.

Bangkok Bank Pcl fell in Thailand after anti-government demonstrators defied the emergency decree and continued their occupation of the prime minister's office. Samak said this week he would not resign to end the impasse.

Shares of Bangkok Bank, the nation's biggest lender, fell 6 percent to 110 baht.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net.