Asian Stocks Fall on Capital-Raising Concerns, Dollar Decline

By Shani Raja

Nov. 26 (Bloomberg) -- Asian stocks fell, led by banks and Japanese automakers, amid capital-raising concerns and as the dollar slumped to a 14-year low against the yen.

Bank of China Ltd., which this week said it’s studying options for replenishing capital, lost 2.9 percent in Hong Kong. Asahi Glass Co. slumped 7.9 percent on plans to sell convertible bonds. Investment group PT Bakrie & Brothers, which said two days ago it will sell bonds, sank 8 percent in Jakarta. Honda Motor Co. lost 1.1 percent on concern the stronger yen will hurt the value of U.S. revenue.

The MSCI Asia Pacific Index slipped 0.6 percent to 117.59 as of 7:54 p.m. in Tokyo, with about two stocks declining for each one that rose. The gauge, which swung between gains and losses at least 18 times, has climbed 67 percent from a more than five-year low on March 9 amid signs government stimulus measures were reviving economies around the world.

“Markets tend to consolidate after a very strong performance,” said Paul Xiradis, who manages $10 billion at Ausbil Dexia Ltd. in Sydney. “It’s a bit of a patience game from here. What we want to see is ongoing confirmation that things are improving, and then that being translated into improved earnings.”

Japan’s Nikkei 225 Stock Average fell 0.6 percent as Finance Minister Hirohisa Fujii said the government needs to take action on abnormal currency movements. The yen strengthened today to 86.30 per dollar, the highest since July 1995.

Lower Confidence

China’s Shanghai Composite Index sank 3.6 percent, while Hong Kong’s Hang Seng Index fell 1.8 percent. China Minsheng Banking Corp. lost 3.1 percent on its debut in Hong Kong after raising HK$30.1 billion ($3.88 billion) in the city’s biggest public share sale since April 2007.

South Korea’s Kospi Index fell 0.8 percent as a central bank survey showed manufacturers’ confidence slipped to the lowest level in four months. Australia’s S&P/ASX 200 Index declined 0.3 percent. Among stocks that gained, BHP Billiton Ltd., the world’s largest mining company, added 1.5 percent in Sydney as copper prices climbed in New York.

Futures on the U.S. Standard & Poor’s 500 Index lost 1.4 percent. U.S. markets are closed today for Thanksgiving. The S&P 500 added 0.5 percent yesterday as reports on new home sales, jobless claims and consumers spurred optimism the economic recovery is strengthening.

The MSCI Asia Pacific Index has gained 31 percent this year, more than the S&P 500’s 23 percent rise, amid confidence Asian growth will outpace the rest of the world. Shares in the MSCI gauge trade at 1.5 times book value, rising from 1.03 at the gauge’s low this year on March 9, according to data compiled by Bloomberg.

Capital Concerns

Bank of China lost 2.9 percent to HK$4.35, while China Construction Bank Corp., the nation’s No. 2 bank by market value, declined 3.6 percent to HK$6.89. Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market capitalization, slid 2.8 percent to HK$6.61.

China’s five largest banks have submitted preliminary plans for boosting capital to the country’s banking regulator, people familiar with the matter said this week.

“It’s not surprising that the authorities in China are wanting to make sure that the loans go to the right places and banks are not becoming too stretched,” Geoff Lewis, Hong Kong- based head of investment services at JPMorgan Asset Management, told Bloomberg Television today. “We might see some gradual measures to withdraw some liquidity.”

China’s excess industrial capacity is “wreaking far- reaching damage on the global economy,” stoking trade tensions and raising the risk of bad loans, the European Union Chamber of Commerce in China said.

Minsheng Bank

Minsheng Bank, the nation’s first privately owned lender, fell 3.1 percent to HK$8.80, becoming the first Chinese bank in four years to fall on its Hong Kong trading debut.

Asahi Glass, Japan’s biggest glass producer, slumped 7.9 percent to 739 yen. The stock posted the largest drop on the MSCI Asia Pacific Index after the company filed to sell as much as 100 billion yen ($1.1 billion) of convertible bonds for investments and to repay maturing debt.

Bakrie sank 8 percent to 92 rupiah. The company said on Nov. 24 that it plans to raise as much as $250 million of bonds by January to help fund expansion and refinance debt. The Jakarta Composite Index slipped 2.8 percent to 2,393.52.

PT Energi Mega Persada, a Bakrie affiliate, slumped 6.4 percent to 220 rupiah after saying yesterday it plans to raise 4.8 trillion rupiah ($509 million) in a rights offer in January.

“The market is confused with the massive fundraising by the group,” Sunny Yoon, president director of PT Citigroup Indonesia said in Jakarta today. “When will it end?”

Japan Exporters Fall

Honda lost 1.1 percent to 2,765 yen and Isuzu Motors Ltd. slumped 4.7 percent to 142 yen as the dollar extended its seven- month decline against the Japanese currency. Sony Corp., the maker of the PlayStation 3 game machine, retreated 1.9 percent to 2,370 yen.

BHP added 1.5 percent to A$41.80. Oil and metals prices advanced as the weaker dollar boosted the appeal of commodities as an alternative investment. Crude oil futures in New York rose 2.6 percent to $77.96 a barrel yesterday, the highest settlement since Nov. 18, while copper futures gained 1.7 percent.

Newcrest Mining Ltd. surged 2.8 percent to A$38, as gold climbed to a record for the third time this week. Rival St. Barbara Ltd. jumped 4.4 percent to 35.5 Australian cents.

Commodity-related shares are the MSCI Asia Pacific Index’s best performers this year on speculation the revival in global growth will fuel demand for raw materials. The Organization for Economic Cooperation and Development on Nov. 19 raised its forecast for growth in the leading developed economies next year to 1.9 percent from 0.7 percent previously, as China powers a global recovery.

Taiwan Economy

Data from Taiwan’s statistics bureau today showed the island’s economy shrank 1.29 percent in the third quarter, less than economists estimated, amid rising Chinese demand for electronics.

In Seoul, Samsung C&T Corp., South Korea’s second-biggest builder, slumped 6.5 percent to 47,300 won as state-run Dubai World, with $59 billion of liabilities, sought to delay debt payments. Samsung C&T won a $350 million bridge contract from a Dubai World unit in April 2007.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.