Most Asian Stocks Decline on Earnings Concern; ICBC Advances

By Jonathan Burgos and Ian Sayson

Nov. 13 (Bloomberg) -- Most Asian stocks dropped, paring the MSCI Asia Pacific Index’s first weekly advance in four, as commodity prices fell and Japanese glassmakers posted losses.

BHP Billiton Ltd., the world’s biggest mining company and Australia’s largest oil producer, sank 1.4 percent in Sydney. Central Glass Co. and Nippon Sheet Glass Co. dropped more than 6 percent in Tokyo after reporting losses. Industrial & Commercial Bank of China Ltd. climbed 2 percent after its chairman predicted loan profitability among Chinese lenders will improve.

Five stocks fell for every four that rose on the MSCI Asia Pacific Index. The gauge was little changed at 117.87 as of 5:12 p.m. in Tokyo, on course for a 1.3 percent gain for the week. The measure has dropped 2.8 percent from a 13-month high on Oct. 20 amid concern governments will withdraw stimulus efforts.

“There are still skeptical investors out there who don’t think the global recovery will be sustained and this is tempering the advance in equities,” said Allan Yu, who helps manage $4 billion at Manila-based Metropolitan Bank & Trust Co.

Japan’s Nikkei 225 Stock Average dipped 0.4 percent to 9,770.31. Leopalace21 Corp., a real-estate company, slumped 7.5 percent after Mitsubishi UFJ Securities downgraded the stock.

Australia’s S&P/ASX 200 Index sank 0.9 percent as Paladin Energy Ltd. dropped 2.6 percent after its loss in the September quarter widened. The Shanghai B-Share Stock Price Index, a gauge of dollar-denominated Chinese shares, rallied 9.4 percent to its highest since May 2008 after regulators increased the amount of foreign currency individuals can exchange.

Oil, Metal Prices

Futures on the Standard & Poor’s 500 Index were little changed. The gauge slid 1 percent yesterday from a 13-month high, dragged down by energy producers.

Crude-oil futures fell 3 percent to $76.94 a barrel in New York yesterday, the lowest settlement since Oct. 14. The Energy Department reported that supplies of crude oil rose 1.76 million barrels to 337.7 million last week. Analysts surveyed by Bloomberg News forecast a 1 million-barrel gain.

The London Metals Index, a measure of six metals including copper and zinc, dropped 0.8 percent yesterday, its steepest slump this week.

BHP Billiton dropped 1.4 percent to A$39.01. Rio Tinto Ltd., the world’s third-biggest mining company, slipped 0.5 percent to A$69.52. PetroChina Co., the nation’s largest oil producer, lost 1.3 percent to HK$9.95 in Hong Kong. Jiangxi Copper Co. Ltd., China’s biggest producer of the metal, declined 1.4 percent to HK$18.30.

In Manila, Philex Mining Corp. slumped 14 percent to 16.75 pesos. Philex said yesterday third-quarter profit fell 42 percent to 617.5 million pesos ($13 million) while First Pacific Co. said it’s in no hurry to boost its 21 percent stake in the miner.

Justifying Valuations

The MSCI Asia Pacific Index has climbed 67 percent from a more than five-year low on March 9. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Dow Jones Stoxx 600 Index.

“We’ll have to see whether corporate earnings will continue to surprise positively,” said Michiya Tomita, who helps manage $67 billion at Mitsubishi UFS Asset Management Co. in Hong Kong. “That will help justify valuations.”

The MSCI gauge fell 1.3 percent in October, the first monthly decline since February, as Australia’s central bank raised interest rates, while India shifted policy focus toward stemming inflation.

China, World

China will take further steps to boost domestic demand, President Hu Jintao said. The International Monetary Fund doesn’t expect the world to experience a double-dip recession, though the economic recovery is fragile and sluggish, IMF Managing Director Dominique Strauss-Kahn said. Hu and Strauss- Kahn spoke in Singapore.

Paladin Energy declined 2.6 percent to A$4.12. The uranium producer said its loss widened to $20 million in the three months ended in September from a loss of $5.1 million a year earlier.

In Tokyo, Central Glass tumbled 6.8 percent to 370 yen after posting first-half net loss of 451 million yen ($5 million). Nippon Sheet Glass, which posted a first-half net loss of 26.2 billion yen, declined 8.2 percent to 261 yen, the steepest decline in the MSCI Asia Pacific Index.

Leopalace21 slumped 7.5 percent to 410 yen after it was cut to “underperform” from “market perform” by Kouki Ozawa, an analyst at Mitsubishi UFJ Securities.

Nintendo Co. declined 1.4 percent to 22,980 yen. Sales of the company’s Wii console fell for the eighth straight month in the U.S., as a 20 percent price reduction failed to lift purchases of the world’s leading video-game platform.

In Hong Kong, Industrial & Commercial Bank advanced 2 percent to HK$6.80. China Construction Bank Corp., China’s No. bank by market value, added 1.4 percent to HK$7.13.

ICBC Chairman Jiang Jianqing said this year’s record lending won’t lead to an increase in bad debts in 2010, and predicted loan profitability among Chinese banks will improve. Jiang also said he expects China to maintain its current monetary policy.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net.