By Jonathan Burgos
July 9 (Bloomberg) -- Asian stocks fell for a seventh day, the longest losing streak since December 2007, as a stronger yen threatened the value of Japanese exports and Australian unemployment rose.
Honda Motor Co., which makes 51 percent of its revenue in North America, dropped 2.9 percent as the yen rose to a four- month high against the dollar. Wesfarmers Ltd., Australia’s second-largest retailer, sank 3 percent as the statistics bureau said the jobless rate climbed to the highest in almost six years. Hang Lung Properties Ltd., a developer with investments in China, slid 3.6 percent in Hong Kong on speculation the Chinese central bank will curb lending, damping demand for real estate.
The MSCI Asia Pacific Index lost 0.4 percent to 100.14 as of 3:10 p.m. in Tokyo, taking its seven-day decline to 3 percent. The gauge had climbed as much as 49 percent from a more than five-year low on March 9 on optimism government stimulus measures will revive global growth.
“Markets need to come off some more before people start buying,” said John Koh, who helps manage $1.1 billion at MEAG Hong Kong Ltd. “There is no real reason to come back in. Investors are waiting for earnings to show a recovery is on track.”
Japan’s Nikkei 225 Stock Average declined 1.4 percent, while Hong Kong’s Hang Seng Index lost 0.6 percent. Taiwan’s Taiex Index climbed 1.2 percent.
Taiwan Semiconductor Manufacturing Co. Ltd. climbed 2 percent after Bank of America Corp.’s Merrill Lynch unit recommended investors buy the stock. Chunghwa Picture Tubes Ltd. surged 6.8 percent as the Economic Daily News reported a partner will invest in company. Manila Electric Co. jumped 4.1 percent while CSR Ltd., Australia’s second-largest maker of building products, advanced 5.3 percent on forecasts of higher earnings.
Government Stimulus
Futures on the Standard & Poor’s 500 Index added 0.4 percent after Alcoa Inc., which kicked off second-quarter earnings announcements in the U.S. yesterday, posted a narrower loss than analysts expected. The S&P 500 fell 0.2 percent yesterday, led by telecommunications companies after Sanford C. Bernstein & Co. cut their profit estimates.
Optimism government stimulus measures will revive global growth has fueled the MSCI Asia Pacific Index’s rally since March. Group of Eight leaders said yesterday the economic recovery from the steepest recession since World War II was too fragile for them to consider reversing efforts to pump money into the economy.
The Bank of Korea left the benchmark interest rate unchanged at a record low for a fifth month today. The central bank follows counterparts in Australia and Europe, which both kept borrowing costs at historic lows in the past week to support their economies.
Stronger Yen
Japanese exporters declined as the yen rose to as high as 91.80 against the dollar, a level not seen since February, amid concern U.S. earnings will show weakness. The currency most recently changed hands at 92.98 per dollar, compared with 94.24 at the close of equity trading yesterday.
Honda dropped 2.9 percent to 2,320 yen. Toyota Motor Corp., the world’s largest automaker, fell 1.7 percent to 3,410 yen. Nissan Motor Co. Ltd., Japan’s No. 3 automaker, dropped 2.9 percent to 532 yen.
“If this level of the yen continues, we could see some exporters be forced to cut their profit outlooks,” said Fujio Ando, a fund manager at Tokyo-based Chibagin Asset Management Co. “The market is becoming cautious with regards to the outlook for earnings and the economy.”
Australian Unemployment
The number of Australians employed dropped 21,400 from May, the country’s statistics bureau said in Sydney today. The median estimate of 21 economists surveyed by Bloomberg was for a decline of 20,000. The jobless rate rose to 5.8 percent from 5.7 percent.
Wesfarmers, which runs businesses from mining to insurance, sank 3.2 percent to A$22.06. Australia & New Zealand Group Ltd. declined 2.6 percent to A$15.88.
In Hong Kong, Hang Lung fell 3.6 percent to HK$22.70. China Overseas Land & Investment Ltd., a developer controlled by the country’s construction ministry, dropped 3.5 percent to HK$16.18.
New loans in China rose almost fivefold in June, central bank figures showed yesterday. Chinese banks have extended 47 percent more loans this year than the central bank’s minimum target for 2009, after the government eased lending restrictions to counter an export collapse.
“The rise in new loans is much larger than expected,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. “People are worrying that the banks are taking too much risk now. The impact will be on banks and developers because their earnings will suffer.”
‘Apparently Improving’
Taiwan Semiconductor climbed 2 percent NT$55.5 after Merrill upgraded the stock to “buy” from “neutral.” United Microelectronics Corp., which Merrill raised to “buy” from “underperform,” was unchanged at NT$11.65 after earlier climbing 2.2 percent.
Prospects for demand in the second half of this year and for 2010 “are apparently improving,” analysts including Daniel Heyler wrote in a note dated today.
Chunghwa Picture Tubes surged 6.8 percent to NT$5.17. The company will have a strategic partner investing in the company in two months, the Economic Daily News reported, citing Chairman Lin Wei-shan. Chunghwa aims to swing to profit in the fourth quarter, the newspaper reported Lin said.
AU Optronics Corp., Taiwan’s biggest liquid-crystal display maker, climbed 5.4 percent to NT$36.15, while Chi Mei Optoelectronics Corp., Taiwan’s second-biggest liquid-crystal display maker, rose 5 percent to NT$19.05. The companies said they expect third-quarter revenue to rise from the previous three-month period on a global glass shortage.
Higher Profit?
Manila Electric jumped 4.1 percent to 176 pesos, a record high. Profit may rise to between 13 billion pesos ($270 million) and 15 billion pesos this year from 3.14 billion pesos in 2008 after the company received government approval in April to increase electricity tariffs for the first time in six years, Director Alan Ortiz said yesterday in a phone interview.
In Sydney, CSR advanced 5.3 percent to A$1.60. There is “a reasonable prospect” that earnings before interest and tax, before significant items, will be “slightly higher than last year,” in the year ending March 31, 2010, Managing Director Jerry Maycock said today in a presentation.
To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
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