By Yoshiaki Nohara - Nov 16, 2011 11:50 AM GMT+0700
Nov. 16 (Bloomberg) -- Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., talks about the impact of Europe's sovereign debt crisis on global financial markets and his investment strategy. Naeimi speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Nov. 16 (Bloomberg) -- Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Bank, talks about the impact of Europe's debt crisis on Asian equity markets and her asset allocation. Roth speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Asian stocks fell for a second day after Italian bond yields rose amid concern Italy’s new government will struggle to trim its debt and keep Europe’s crisis from spreading.
Esprit Holdings Ltd. (330), a clothier that counts Europe as its biggest market, fell 4.1 percent. Sony Corp. (6758), which depends Europe for 21 percent of its sales, fell 3 percent. AviChina Industry & Technology Co. jumped 10 percent in Hong Kong after billionaire Li Ka-shing bought its shares. Olympus Corp. jumped as much as 16 percent, extending its biggest two-day gain since at least 1974, following a report the scandal-hit company may avoid delisting.
The MSCI Asia Pacific Index slipped 1.2 percent to 116.26 as of 1:48 p.m. in Tokyo, after swinging between gains and losses at least eight times. More than three stocks fell for each that rose on the gauge. The measure fell 0.9 percent yesterday.
“Italy is not terminal yet, but it will need evidence of concrete steps toward reform,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “The market will create risk-on and risk-off until evidence emerges one way or another.”
Stocks fell after Italy’s 10-year yield rose again above the 7 percent threshold that prompted Greece to seek a bailout. Italy’s prime minister designate Mario Monti prepares to meet President Giorgio Napolitano today to present his new government.
Japan’s Nikkei 225 (NKY) Stock Average dropped 0.6 percent as the Bank of Japan kept the overnight lending rate between zero and 0.1 percent and cut its economic assessment. Australia’s S&P/ASX 200 fell 0.7 percent, while South Korea’s Kospi Index declined 0.7 percent.
Exporters, Banks
Hong Kong’s Hang Seng Index slid 1.9 percent after the International Monetary Fund said Hong Kong’s “rapid” credit growth has increased the risk that banks make bad loans.
Asian exporters and banks tied to Europe declined. Sony fell 3 percent to 1,313 yen. HSBC Holdings Plc (5), Europe’s biggest lender, lost 2.1 percent to HK$60.75.
Esprit slid 4.1 percent to HK$9.63. The clothier that has lost more than 70 percent of its value this year will be removed from the MSCI Hong Kong Index at the end of the month, the gauge’s compiler said.
AviChina Industry & Technology, a Chinese developer of vehicles and civilian aircraft, jumped 10 percent to HK$3.85 in Hong Kong trading after billionaire Li Ka-shing bought 4.6 million shares of the company on Nov. 11.
Olympus Rises
Shares of Olympus, which lost 81 percent in the month to Nov. 11, advanced 9.2 percent to 699 yen. The stock rebounded by its daily limit and settled after the close for the last two trading days as investors bet declines were overdone.
“The chances are about 90 percent that the company won’t be delisted,” said Kazuyuki Terao, Chief Investment Officer of RCM Japan Co. “That means the stock is looking cheap at the current price.”
The MSCI Asia Pacific Index declined 14.5 percent this year through yesterday, compared with a 14.1 percent loss by the Stoxx Europe 600 Index. The S&P 500 is little changed for the year. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with 12.7 times for the S&P 500 and 10.3 times for the Stoxx 600.
MSCI Inc., which operates Asia’s benchmark index, will reshuffle the gauge’s members after the close on Nov. 30, it said in a report on its website dated yesterday. Japan’s Sanrio Co., the maker of Hello Kitty products, will be added. Bearing- maker Minebea Co. and Mitsui Engineering & Shipbuilding Co. will be removed.
Elpida Memory Inc. (6665) jumped 11 percent to 365 yen in Tokyo after it kept its membership of the Asia-Pacific index. The stock plunged yesterday on speculation MSCI Inc. would remove the memory-chip maker, which has lost almost two-thirds of its market value this year.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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