Asian indexes fall, led by Softbank, as dollar drops

Asian fell this week, led by Japan's Softbank Corp and Malaysian builder Gamuda Bhd. The declining dollar, which fell to a three-year low against the yen, raised concern about the region's exports becoming costlier.

The Morgan Stanley Capital International Asia Pacific Index, which includes more than 800 companies in the region, fell 0.5 percent, its first weekly decline in three. Benchmark indexes in Japan, Taiwan, Australia and Singapore slid.

"The biggest worry in the market is the movement in the currency, which may prompt companies to slash their forecasts," said Hiroichi Nishi, a manager at Nikko Cordial Securities Inc, said this week in Tokyo.

The Nikkei 225 Average and the Topix index each lost 2 percent, their first declines in three weeks. South Korea's Kospi and the Hang Seng Index in Hong Kong both rose about 2 percent, with the Hang Seng benefiting from investor interest in China-related commodity stocks such as oil producer CNOOC Ltd.

In the US, the Dow Jones Industrial Average, added 34, or 0.3 percent, to 10,042.16 on Friday, bringing its gain for the week to 1.8 percent.

The Standard & Poor's 500 Index rose for the third straight week, while the NASDAQ Composite Index had its second weekly gain in four.

The Nikkei closed down 203.8 on the week at 10,169.66.

Shares Softbank plunged almost 28 percent to ?3,110 on investor concern about share values after Japan's second-largest provider of high-speed Web access said it would sell as much as ?229 billion (US$2.1 billion) in new shares and convertible bonds.

The company yesterday pared the size and price of the sale.

Malaysian Gamuda sank 16 percent to 6.15 ringgit, its biggest weekly drop in three years, after the government scrapped a 14.5 billion ringgit (US$3.8 billion) electric rail project the company earlier won the contract to construct.

The benchmark index rose 0.6 percent on the week to 791.9.

The Hang Seng China Enterprise Index, which tracks China company shares that trade in Hong Kong, was the best performing index in Asia this week in dollar terms, gaining 9 percent to 4462.72.

Investors betting that China's industrial production, which surged a record 18 percent in November, will increase demand for oil, metals and other raw materials.

Aluminum Corp of China surged 18 percent to HK$5.55, its biggest weekly gain since May, after the company was reported to have bought a refinery in Shanghai. Sinopec Beijing Yanhua Petrochemical Co, China's largest plastics maker, rose 16 percent to HK$2.43.

"We see continuous strong demand for China-related stocks," said Cheung Ka Ming, general manager of Hang Seng Investment, which manages more than US$6 billion.

The yen strengthened to its highest against the dollar in more than three years on Tuesday. Sales of the currency by the Bank of Japan dragged the yen 0.2 percent lower for the week to ?107.88.

Nissan Motor Co, which expects the yen to average ?110 against the dollar in the second half, lost 5.1 percent to ?1,210 this week.

A one-yen change versus the dollar will reduce its operating profit this year by ?10 billion.

Still, the stronger yen, which makes exports more expensive, hasn't damped business confidence, the Bank of Japan's Tankan survey, which polls 8,204 companies on their economic outlook, showed confidence is at a 6 1/2-year high and large manufacturers plan to increase investment spending.

The Nikkei climbed almost 1 percent after the report was released yesterday.

Japan's is certainly in a recovery stage, and the Tankan survey gives investors a catalyst to invest in the market," said Ku Shin, who manages about US$2 billion in global stocks at Banc One Investment Advisors Corp in Columbus, Ohio.

A bigger-than-expected 0.9 percent rise in U.S. retail sales in November helped counter pessimism about the weaker dollar. Samsung Electronics, South Korea's biggest consumer- electronics maker, rose 0.8 percent this week to 455,000 won, and LG Electronics Inc, its nearest rival climbed 1.2 percent to 59,700 won.

"Domestic consumption is a big component of the US economy and the retail report is positive because it shows that consumers are spending," said Teo Chon Kiat, who helps manage about US$1.4 billion in Asia, excluding Japan, at DBS Asset Management Ltd. in Singapore.

The US "will tend to import more from Asia and that will help the electronics sector." In Australia, News Corp., which relies on advertising to boost sales at its Fox television network and its New York Post newspaper, rallied 1 percent to A$11.66 for the week. News Corp makes three-quarter of its earnings in the US. The benchmark S&P/ASX 200 Index fell 0.5 percent.

Singapore's Times Index fell 0.3 percent this week to 1727, led by chipmaker Chartered Semiconductor Manufacturing Ltd.