By Malcolm Scott and Saeromi Shin
Nov. 24 (Bloomberg) -- Asian stocks fell on mounting signs the credit crisis is hurting profits at financial companies as recessions in the world’s biggest economies deepen.
Suncorp-Metway Ltd., Australia’s third-largest insurer, dropped 3 percent in Sydney after increasing its forecast for bad loans. Standard Chartered Plc lost 6.4 percent in Hong Kong after the London-based lender said it will sell stock to bolster its finances. Banking shares fell even as Citigroup Inc. won a U.S. government guarantee on $306 billion of troubled assets. BHP Billiton Ltd., Australia’s largest oil company, climbed 6.4 percent after crude climbed.
“Investors doubt whether fundamental solutions to the Citi problem will be provided,” said Park Se Girl, who helps oversee $2 billion of assets at Meritz Asset Management Co. in Seoul. “Until bad assets are cleared up at financial institutions, we may not see the bottom of the market.”
Most Asian markets fell today, with Japan shut for a holiday. The MSCI Asia Pacific excluding Japan Index lost 0.9 percent to 204.57 as of 4:35 p.m. in Hong Kong. Financial stocks were the biggest drag. The gauge is down 61 percent this year, leaving it at 8.6 times estimated profit, about half its valuation at the start of 2008.
South Korea’s Kospi Index slid 3.4 percent, Singapore’s Straits Times Index retreated 2.5 percent and Hong Kong’s Hang Seng Index declined 1.6 percent. Air China Ltd. tumbled in Hong Kong after losses on hedging contracts tripled.
Thailand’s SET Index fell 2.9 percent, led by Bangkok Bank Pcl, after economic growth slowed more than expected in the third quarter as exports cooled and violent political protests curbed domestic spending.
Citigroup Rescue
Stocks have fallen this year as almost $1 trillion of credit-related losses dragged on economies worldwide. The International Monetary Fund forecasts global growth of 2.2 percent next year, a level it has called the “equivalent to a global recession.” The U.S., Japan and the euro region will all contract, the IMF predicts.
U.S. stocks rallied Nov. 21, pushing the Standard & Poor’s 500 Index up 6.3 percent, after President-elect Barack Obama picked New York Federal Reserve Bank chief Timothy Geithner to head the Treasury.
December futures on the S&P 500 lost 1 percent, after the U.S. government agreed to inject $20 billion into Citigroup from the Treasury’s $700 billion Troubled Asset Relief Program and protect $306 billion of loans and securities on the bank’s books against losses. Citigroup shares tumbled 60 percent last week.
Banks Decline
“Financial stocks are out of favor and their earnings will continue to be under pressure due to the credit crisis,” said Paul Joseph Garcia, who helps manage $1.5 billion as chief investment officer at ING Investment Management Ltd.’s Manila unit. “Citigroup has been an issue hanging over the market.”
Suncorp, Australia’s fifth-largest bank, fell 3 percent to A$6.70 after saying bad debts may reach 0.4 percent of total loans in the year ended June 30, 2009.
The company is among banks owed up to A$2 billion ($1.25 billion) by Babcock & Brown Ltd., a Sydney-based manager of wind farms and real estate that’s firing staff and selling assets to repay debt.
Babcock & Brown, the worst performer on the MSCI Asia- Pacific Index in 2008, extended a trading halt today as it tries to resolve a dispute with one of its bankers.
Rising Borrowing Costs
Standard Chartered, the third-biggest U.K. bank, fell 6.4 percent to HK$88 before a trading suspension. The company said it’s seeking 1.8 billion pounds ($2.7 billion) from a rights offer that prices the Hong Kong-listed stock at HK$45.11.
Financial shares also fell as the rate Australian banks charge each other for three-month loans rose 3.8 basis points to 4.47 percent in Sydney. The cost of borrowing in dollars for three months in London gained for the first time in four days on Nov. 21 as concern about credit losses and writedowns increased.
Commonwealth Bank, Australia’s largest mortgage lender, lost 2.4 percent to A$30.22. Shinhan Financial Group Co., which controls South Korea’s third-biggest bank, sank 8.6 percent to 26,050 won. DBS Group Holdings Ltd., Singapore’s largest bank by assets, declined 2.8 percent to S$9.33.
Commodities producers rose as oil rebounded. BHP Billiton, the world’s largest mining company and Australia’s biggest oil producer, gained 6.8 percent to A$23.38. Woodside Petroleum Ltd., Australia’s No. 2 oil producer, advanced 3.7 percent to A$30.07.
Hedging Losses
Oil climbed as much as 2.8 percent to $51.34 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Gold for immediate delivery jumped 7.4 percent on Nov. 21. The precious metal dropped 0.7 percent today.
Newcrest Mining Ltd., the biggest Australian gold producer, jumped 10 percent to A$23.60 and Sino Gold Mining Ltd. increased 12 percent to A$3.
In Hong Kong, Air China slumped 10 percent to HK$1.59. The Beijing-based carrier’s loss on hedging contracts widened to 3.1 billion yuan ($454 million) as of Oct. 31, from 1 billion yuan disclosed in the third quarter, it said in a Nov. 21 statement.
China Southern Airlines Co. and China Eastern Airlines Co., which did not make statements on their fuel hedging, fell more than 13 percent in Hong Kong trading.
Suning Appliance Co., China’s biggest electronics retailer by market value, advanced 1.8 percent to 14.90 yuan, after Caijing magazine reported today that the chairman of rival Gome Electrical Appliances Holdings Ltd. had been detained. Gome, China’s biggest electronics retailer by stores, halted trading in its shares pending a statement.
Thai Economy
Bangkok Bank, Thailand’s biggest lender, dropped 3.1 percent to 63.5 baht. Siam Commercial Bank Pcl, the country’s No. 2 lender, slid 1.5 percent to 48.5 baht.
Thailand’s gross domestic product grew 4 percent in the third quarter from a year earlier, lower than 4.3 percent median estimate in a Bloomberg News survey of economists. The country’s economy may expand as little as 3 percent next year, the slowest pace in eight years, the government’s National Economic and Social Development Board said today. That’s less than the central bank’s lowest estimate of 3.8 percent.
To contact the writer on the story: Malcolm Scott in Sydney at Mscott23@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net.
Posts
No comments:
Post a Comment