Asian Stocks Fall for Fourth Week as Global Recession Deepens

By Jonathan Burgos

March 7 (Bloomberg) -- Asian stocks fell for a fourth week, led by finance companies and automakers, amid mounting concerns that losses from the financial crisis will increase.

HSBC Holdings Plc, Europe’s largest bank, slumped 24 percent, the most since Oct. 24, after announcing a $17.7 billion stock sale. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, tumbled 12 percent as Citigroup Inc.’s stock fell below $1 for the first time. Honda Motor Co., which makes half of its revenue in North America, sank 10 percent after U.S. auto sales tumbled.

“People haven’t yet understood the full depth of the financial crisis,” said Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., which oversees about $96 billion of assets. “Should regulators assess banks’ assets under stricter conditions, quite a few of these companies may be effectively insolvent.”

The MSCI Asia Pacific Index lost 4.3 percent to 71.95 in the past five days. The four-week drop is the longest series of declines since October. The gauge, which has slumped 19 percent this year, on March 3 fell to its lowest level since August 2003.

The Nikkei 225 Stock Average fell 5.2 percent this week, while Australia’s S&P/ASX 200 Index dropped 6 percent. Hong Kong’s Hang Seng index slumped 7 percent.

AMP Ltd., Australia’s biggest pension-plan provider, tumbled 21 percent this week as it sought to raise funds. Manila Electric Co. climbed 40 percent on speculation its major shareholders are vying for control of the utility. Elpida Memory Inc., Japan’s biggest memory-chip maker, dropped 8 percent on concern a possible rescue plan for the company may be delayed.

Government Support

Governments from China to the U.S. and Australia have sought to introduce policies this year to ease the financial crisis and revive growth. Central banks in India and the Philippines cut rates this week.

China’s Shanghai Composite Index gained 5.3 percent as Premier Wen Jiabao said the country’s economic growth target of 8 percent for this year is within reach. He pledged to increase spending to bolster the world’s third-largest economy.

“The global recession demands rapid responses,” said Hiroshi Morikawa, a strategist at Tokyo-based MU Investments Co., which manages about $14 billion. “China is one of the few spots in the world where we can see signs of recovery.”

MSCI’s Asian index slumped by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to cut jobs amid falling profits. Earnings estimates for companies in the gauge have been slashed by 48 percent since the beginning of 2009, data compiled by Bloomberg shows.

Fund Raising

HSBC slumped 24 percent to HK$43.50, the lowest since September 1996. The company fell the most in 20 years on March 3 after announcing a $17.7 billion share sale to strengthen its balance sheet after earnings last year tumbled.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank, dropped 12 percent to 401 yen as bank of Japan Deputy Governor Hirohide Yamaguchi said the central bank may need to expand its purchases of corporate debt to prevent a credit shortage as the recession deepens.

Shares of Citigroup, once the world’s biggest bank by value, tumbled to as low as 97 cents in the week in New York trading amid concern the shares can recover after more than $37.5 billion in losses and a government rescue.

“Citi below $1 shows we are still far from the exit of this U.S.-originated global financial crisis,” Kiyoshi Ishigane, a senior strategist at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $61 billion., said in an interview with Bloomberg Television.

Bright Spots

Honda Motor dropped 10 percent to 2,150 yen after its U.S. sales fell 38 percent last month. Toyota Motor Corp., the world’s largest automaker, slumped 8.8 percent to 2,900 yen. The company, facing the first loss in 59 years, suffered a record 40 percent drop in sales last month to the U.S., its biggest market.

AMP tumbled 21 percent to A$3.83, the lowest since August 2003. The company said on March 3 it’s seeking to raise A$300 million ($192 million) through a notes offer.

Manila Electric Co. climbed 40 percent 126 pesos. San Miguel Corp. Vice Chairman Ramon Ang said this week his company hasn’t added to the stake it agreed to buy last year. San Miguel said it would purchase 27 percent of the utility in October and took four seats on its board in January.

Elpida Memory Inc., Japan’s biggest memory-chip maker, slumped 8 percent to 544 yen after the Nikkei newspaper said a possible rescue package involving Taiwan’s government may be arranged later than the company projected.

Elpida had hoped to gain a package with Taiwan’s government by the end of March, the Nikkei reported today.

To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net;