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Sun, Dec 28, 2008 - Page 10 News List

Asia snaps two-week win streak

BLOOMBERG AND AFP , HONG KONG

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Asian stocks fell for the first week in three on mounting signs the deepening global recession is hurting corporate profits.

PetroChina Co (中石油), the nation’s largest oil producer, lost 9.3 percent as crude prices plunged amid mounting signs of weakness in global economies. Toyota Motor Corp’s forecast for its first-ever operating loss dragged South Korean rivals Hyundai Motor Co and Kia Motors Corp more than 16 percent lower on concern automobile demand is plummeting.

“The global economic situation is continuing to deteriorate,” said Karma Wilson, Sydney-based head of Asian equities at AMP Capital Investors, which manages about US$61 billion.

The MSCI Asia Pacific Index fell 2.4 percent to 87.40 this week. Gauges of energy stocks and raw-material producers posted the biggest declines among the benchmark index’s 10 industry groups last week.

The MSCI Asia Pacific has slumped 45 percent this year, the worst annual performance in its two-decade history, as the most severe financial crisis since the Great Depression dragged economies worldwide into recessions. Losses and writedowns tied to the collapse the US subprime-mortgage market rose above US$1 trillion last week.

Analysts have cut their average earnings-per-share estimate for companies on the index by 29 percent since the beginning of the year, data compiled by Bloomberg shows.

Japanese government reports in the week showed that factory output tumbled last month, while unemployment rose and exports plunged the most on record.

TAIPEI

Taiwan shares are expected to trade in a strict range this week ahead of the upcoming four-day New Year holiday, dealers said on Friday.

With many foreign institutional investors away for their holidays, daily turnover was expected to remain low, keeping the market quiet, they said.

Mid and small cap stocks may have a better chance to turn active, while electronic and financial heavyweights are likely to remain mired in low liquidity, they added.

The market is expected to face strong technical resistance at about 4,500 points this week, while there may be a floor at around 4,300 points, dealers said.

For the week to Friday, the weighted index fell 269.44 points or 5.74 percent to 4,425.08 after a 4.76 percent increase a week earlier.

Average daily turnover stood at NT$44.08 billion (US1.34 billion), compared with US$71.38 billion dollars a week ago.

Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said consolidation was a good way for the market to digest remaining selling pressure after recent heavy losses.

“The pre-holiday sessions with many investors sidelined could not come at a better time to facilitate narrow fluctuations and make the market technically healthier,” Shih said.

Shih said small and medium-sized shipping, cement and chemical stocks may attract more market attention after they were recently hit hard.

Other regional markets:

KUALA LUMPUR: Malaysian shares closed 0.3 percent lower.

The Kuala Lumpur Composite Index lost 2.27 points to close at 867.35 with a thin volume of 178 million shares worth 156.34 million ringgit.

JAKARTA: Indonesian shares ended 0.3 percent higher.

The Jakarta Composite Index rose 4.28 points to 1,340.89.

Bank Mandiri closed 1.3 percent higher at 2,025 rupiah while Bank Negara ended three percent up at 680.

Cellular provider Indosat rose 3.7 percent to 5,600 rupiah.

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