By Anna Kitanaka and Shani Raja
Jan. 20 (Bloomberg) -- Asian stocks fell, dragging the MSCI Asia Pacific Index down for the third straight day, after regulators told some of China’s banks to limit lending. Finance and energy companies led the decline.
China Construction Bank Corp. sank 3.1 percent and PetroChina Co. dropped 1.7 percent in Hong Kong. The chief Chinese banking regulator, Liu Mingkang, said some banks were asked to curb lending after failing to meet capital requirements. Nomura Holdings Inc. fell 3.8 percent after Credit Suisse Group AG downgraded Japan’s brokerages. Astellas Pharma Inc. climbed 2.7 percent, leading drugmakers higher on speculation President Barack Obama’s healthcare reform plan will be derailed.
The MSCI Asia Pacific Index lost 0.7 percent to 124.45 at 7:35 p.m. in Tokyo, extending a two-day, 1.2 percent drop. The measure has jumped 50 percent in the past 12 months as growth in China helped the global economy emerge from the worst slowdown since World War II. Stocks on the gauge are priced at 1.63 times book value, near the highest level since September 2008.
“China is a critical factor in the recovery process,” said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which holds about $135 billion. “China’s tightening policy is telling us that growth is quite strong. If they can get more balance in their growth, that’s a positive thing.”
China’s Shanghai Composite Index slumped 2.9 percent, while Hong Kong’s Hang Seng Index lost 1.8 percent as Chinese Premier Wen Jiabao yesterday said the country will manage the pace of credit growth. Japan’s Nikkei 225 Stock Average lost 0.3 percent.
Toyota Tsusho, KT
Among stocks that rose today, Toyota Tsusho Corp., an affiliate of Toyota Motor Corp., surged 6 percent in Tokyo after agreeing on a venture with Australian mineral explorer Orocobre Ltd. KT Corp., South Korea’s largest phone and Internet company, jumped 6.8 percent after Shinhan Investment Corp. raised its share-price forecast.
Futures on the U.S. Standard & Poor’s 500 Index lost 0.3 percent. The gauge added 1.3 percent yesterday, led by health and technology companies.
China Construction Bank, the nation’s second-largest lender, sank 3.1 percent to HK$6.22 in Hong Kong and was the biggest drag on the MSCI Asia Pacific Index. Bank of China Ltd. lost 3.4 percent to HK$3.95.
Wen’s speech yesterday excluded references to a proactive fiscal policy and relatively loose monetary policy, marking the “official” end of the nation’s emergency measures to boost the economy, Lu Ting, a Hong Kong-based economist at Bank of America-Merrill Lynch wrote in a note.
‘Desired Effect’
“With the prospect of inflation starting to rear its ugly head, central bankers are now trying to tighten policy,” Arjuna Mahendran, chief investment strategist for Asia at HSBC Private Bank, said in a Bloomberg Television interview from Tokyo. “Monetary tightening is having the desired effect, which is to see that the stock market doesn’t get too exuberant.”
Hong Kong stocks also fell after Shanghai’s government said a Caijing magazine report that the city may allow individuals to invest abroad is “pure fabrication.” The report drove the Hang Seng Index up by 1 percent yesterday.
Insurers declined after the China Insurance Regulatory Commission said the companies should improve their assessment of profitability of sales made through banks and avoid price wars. The regulator may limit or revoke licenses of insurers found to have engaged in such practices to boost sales.
Ping An Insurance Group Co., China’s second-biggest insurer, slipped 2.3 percent to HK$66.05 in Hong Kong. China Life Insurance Co. lost 1.5 percent to HK$36.50.
Japanese Brokerages
Nomura Holdings, Japan’s biggest investment bank, fell 3.8 percent to 711 yen. Daiwa Securities Group Inc. dipped 2.4 percent to 482 yen and Matsui Securities Co. sank 3.7 percent to 654 yen. Credit Suisse lowered its rating on the Japanese brokerage sector to “market weight” from “overweight.”
“We favor shifting from the brokerage sector to the bank sector, for which the risk of further capital increases is gradually receding,” Azuma Ohno, a Tokyo-based Credit Suisse analyst, wrote in a report yesterday.
A gauge of energy stocks on the MSCI Asia Pacific Index lost 1.5 percent, the most of 10 industry groups, as oil futures in New York dropped 1.3 percent to $78.00 in after-hours trading.
PetroChina, China’s No. 1 oil producer, retreated 1.7 percent to HK$9.40 in Hong Kong, while Cnooc Ltd., the country’s largest offshore oil company, declined 1.2 percent to HK$12.08.
A measure of health-care companies on the MSCI Asia Pacific climbed 1.4 percent, after Scott Brown won a U.S. Senate seat in Massachusetts. The victory gives Republicans enough members to block votes on an overhaul of the U.S. health-care system, President Barack Obama’s top legislative goal.
Sweeping Revamp
If passed, the health-care legislation would be the most sweeping revamp of the medical system in 45 years and is aimed at extending health coverage to millions of uninsured Americans by expanding the Medicaid program for the poor and setting up online insurance-purchasing exchanges.
The proposed bill “basically limits the price of drugs,” said Takeru Ogihara, who helps oversee $27 billion as chief strategist at Mizuho Trust & Banking Co. in Tokyo. “If the health-care bill is put aside, it’ll help the U.S. health stocks and the big Japanese health companies that are doing business there too.”
Astellas, which derives 27 percent of its revenue from North America, climbed 2.7 percent to 3,565 yen. Takeda Pharmaceutical Co., Asia’s biggest drugmaker, added 1.7 percent to 4,000 yen. The company gets 41 percent of sales in North America.
Toyota Tsusho surged 6 percent to 1,489 yen in Tokyo. The trading company will establish a joint venture with Orocobre to develop a lithium and potash mine in Argentina. Orocobre, based in Australia, surged 32 percent to A$1.85 in Sydney.
In Seoul, KT Corp. jumped 6.8 percent to 48,700 won, the highest close since April 17, 2008. Shinhan Investment raised its share-price estimate by 18 percent to 57,000 won and maintained its “buy” rating, according to a report today.
To contact the reporters for this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
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