Sun, Oct 26, 2003 page10

• Asian stocks post biggest weekly loss since January

  • BLOOMBERG
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  Asian stocks fell this week, with Japan's Topix index posting its biggest slide in almost three years, while benchmarks in Hong Kong and Singapore had their first weekly drops in six.

  Japan's Mizuho Financial Group Inc, Softbank Corp and other shares that led the Topix's 29 percent advance in the past six months slid after earnings forecasts from US companies sparked concern about the pace of a global economic recovery.

  The slide is "a natural response to the very strong rally," said Peter Rawle, who helps manage US$400 million in Japanese equities at EN Asset Management, a hedge fund based in the UK. "What you saw was a reaction to an external shock, to worries on Wall Street."

  The Topix dropped 6.4 percent to 1024.99, its biggest weekly drop since Dec. 22, 2000. The Nikkei 225 Stock Average also plunged 6.4 percent to 10,335.70, its biggest weekly decline since March 2, 2001. The 1,525 companies represented in the Topix lost a combined US$186 billion in value. Both benchmarks slumped more than 5 percent on Thursday.

  The Morgan Stanley Capital International Asia-Pacific Index which tracks more than 800 companies, slid 4.6 percent, its biggest weekly drop since Jan. 31. South Korea's Kospi Index and Taiwan's TAIEX had their first weekly declines this month.

  Thailand's SET Index was the best performing stock benchmark in the region, rising 4.1 percent. Bangkok Bank Pcl, the country's largest lender by assets, posted third-quarter profit that was the highest in six years, beating some analyst estimates.

  On Thursday, the Topix and Nikkei had their biggest drops since the day after the Sept. 11, 2001, terrorist attacks. The Topix Banks Index was the biggest decliner on the benchmark this week, sliding 13 percent, its biggest since Aug. 28, 1998.

  Mizuho, Japan's largest bank by assets, tumbled 18 percent to ¥258,000 this week. Even with that slide, the stock is worth two-and-a-half times its price three months ago.

  Softbank, whose shares have almost quadrupled since the beginning of the year, was the biggest decliner on the Morgan Stanley's Asia Pacific index in percentage terms this week. The company, Japan's second-largest supplier of high-speed Internet access services, slid 26 percent to 5,210 yen, its biggest weekly drop since March 10, 2000.

  The Japanese currency has been the second best-performing versus the dollar in the past three months, surging 7.8 percent.

  "The recent gains have been too rapid and too much, so as investors focus on the actual earnings announcements, the market will come down to a level where it would actually reflect the fundamentals," said Yasuhiko Sato, who helps manage the equivalent of US$3.2 billion in global assets as a senior fund manager at Dai-Ichi Kangyo Asset Management Co in Tokyo.

  Sony Corp, the world's second-biggest consumer electronics maker, dropped 9.1 percent to ¥3,780 this week, its biggest drop since the five days ended May 2. The company lowered its full-year operating profit forecast because of increased competition and the yen's gains.

  Hong Kong's Hang Seng Index shed 2.6 percent to 11,736.37, its first weekly decline since Sept. 12.

  Johnson Electric Holdings Ltd, the world's second-biggest maker of small electric motors, slumped after saying first-half sales increased 5 percent, lagging its "double-digit" growth target. The stock was the top loser in the Hang Seng this week, dropping 8.9 percent to HK$10.20.

  Singapore's Straits Times tumbled 2.2 percent to 1732.96 in a holiday-shortened week. That was also the first weekly drop since the five days ended Sept. 12.

  Chartered Semiconductor Manufacturing Ltd, the world's fourth-largest supplier of made-to-order chips, plunged 7.4 percent to S$1.76 for the week, its biggest drop in three months.

  The stock's gained 68 percent in the past three months.

  The company said on Thursday it had a loss of US$75.9 million in the third quarter, from a US$89.4 million loss a year ago. The company also estimates a fourth-quarter loss of about US$50 million.

  "Chartered's numbers were good, but of course part of that news has been discounted by the market already," said Steven Lim, who helps manage the equivalent of US$270 million at Daiwa SB Investments in Singapore, including Chartered shares.

  South Korea's Kospi index fell 2.6 percent to 748.17. LG Electronic Inc, which owns half of the world's second-biggest flat-panel display maker, slid 8.4 percent to 58,000 won. The company on Thursday said third-quarter operating profit slipped.

  Asian computer-related shares such as South Korea's Samsung Electronics Co and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) also completed a losing week as Microsoft, the world's largest software maker, reported a first-quarter sales gain that was the smallest since June 2000, while net income dropped after it overestimated sales.

  Samsung Electronics, the world's biggest memory-chip maker, dropped 3.3 percent to 437,000 won this week. Hynix Semiconductor Inc, the world's No. 3 maker of computer memory chips, shed 9.1 percent to 7,000 won. The company gets more than 90 percent of sales overseas.

  TSMC, the world's biggest supplier of made-to-order chips, dropped 5.2 percent to NT$64.50. The company also said it plans to give NT$8 billion (US$235 million) worth of stock options to its workers, which may dilute its earnings per share.

  The TAIEX dropped 2.1 percent to 5918.14.
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