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Most Asian Stocks Retreat as Japanese Shares Decline

By Kana Nishizawa
January 21, 2013 5:46 AM EST 2 Comments

Most Asian stocks fell from the highest since August 2011 amid speculation shares may have risen too far, too fast. Japanese equities dropped as the yen climbed against the dollar after hit a 2 1/2-year low.

Fanuc Corp. (6954) slid 3.9 percent in Tokyo after the factory- robotics company’s rating was cut at Citigroup Inc. Kong. Axiata Group Bhd., a Malaysian mobile-phone carrier, slumped 5.1 percent in Kuala Lumpur, leading losses on speculation the government may call an early election. China Vanke Co., the country’s biggest publicly traded property developer, surged 10 percent in Shenzhen on plans to move trading of its foreign- currency denominated shares to Hong

The MSCI Asia Pacific Index dropped 0.2 percent to 132.42 as of 7:45 p.m. in Tokyo after rising less than 0.1 percent. About 11 stocks declined for every eight that rose. The gauge rallied 11 percent from Nov. 14 through Jan. 18 as Japanese shares jumped on optimism Prime Minister Shinzo Abe will pursue more aggressive stimulus to boost the economy.

“Markets are at highs and some investors are becoming cautious after everyone turned bullish on stocks,” said Koji Toda, chief fund manager at Tokyo-based Resona Bank Ltd., which oversees about $174 billion. “Most investors are still optimistic on the equity market. Just because markets are falling today doesn’t mean they will continue to drop.”

The Asian gauge traded at 14.3 times average estimated earnings on Jan. 18, compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

BOJ Easing

Japan’s Nikkei 225 Stock Average fell 1.5 percent as a Bank of Japan policy meeting started today. The central bank will need to slow monetary easing if the effects on prices and the yen go too far, said Koichi Hamada, an adviser to Abe on choosing a new BOJ chief.

Australia’s S&P/ASX 200 Index (AS51) rose 0.1 percent after swinging between gains and losses. Sims Metal Management Ltd. (SGM), the world’s largest scrap metal recycler, dropped 5 percent in Sydney, the second-biggest slide on the Asia-Pacific gauge, as an internal investigation revealed potential fraud at two of its U.K. businesses.

South Korea’s Kospi Index dropped 0.1 percent, and Singapore’s Straits Times Index gained 0.3 percent. Hong Kong’s Hang Seng Index (HSI) fell 0.1 percent and China’s Shanghai Composite Index advanced 0.5 percent.

The FTSE Bursa Malaysia KLCI Index sank 2.4 percent, the biggest drop since September 2011. Prime Minister Najib Razak must dissolve the nation’s parliament by April 28. Najib’s approval rating fell to the lowest level in 16 months, the Merdeka Center for Opinion Research said in a statement on Jan. 10. Najib is overseas and couldn’t comment on the election timing, a government spokesperson said today.

BOJ Meets

Japan’s exporters dropped as the yen rebounded against the dollar. The currency earlier traded at its weakest level since June 2010. Abe, who came to power in elections last month on a campaign of increased fiscal and monetary stimulus, is pressuring the BOJ to double its 1 percent inflation goal and accelerate cash infusions to end deflation.

Nissan Motor Co. (7201), an automaker that gets about a third of its revenue from North America, slid 1.5 percent to 865 yen in Tokyo. Sharp Corp., which gets about 12 percent of its sales from the Americas, dropped 3.8 percent to 331 yen. The company slowed a Japanese production line making screens for Apple Inc. iPads to a minimum level as the U.S. company manages inventory, Reuters reported Jan. 18, citing two people it didn’t identify.

“Expectations for the Bank of Japan and its easing measures have been priced into stocks,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “The speed at which Japanese shares rose was very fast, so we’re seeing some adjustments as the yen also corrects.”

Fanuc slumped 3.9 percent to 14,350 yen after Citigroup cut its rating to neutral. The company may miss estimates for its third-quarter and full-year earnings on weaker than expected sales, according to the report.

Gome Drops

Gome Electrical Appliances Holding Ltd. (493) slipped 3 percent to 96 Hong Kong cents after confirming a report it is closing Gome-branded stores in the city and saying it won’t have an impact on operations of the listed company. The company’s six branded shops will be closed in Hong Kong by March, the Hong Kong Economic Journal reported today, citing a statement from the operator.

Korea Petrochemical Industrial Co. slumped 3.7 percent to 48,450 won in Seoul after the chemical products maker reported a loss of 10.4 billion won ($9.82 million) in 2012, compared with a 28.4 billion won profit a year earlier.

Sims Metal dropped 5 percent to A$9.48 in Sydney. The carrying value of inventory at its units at Long Marston and Newport may be overstated by about A$60 million ($63 million), New York-based Sims said today in a statement.

U.S. markets are closed for a public holiday. Standard & Poor’s 500 Index futures climbed 0.1 percent.

China Vanke Shares

Among stocks that rose, China Vanke’s yuan-denominated A shares rose 10 percent to 11.13 yuan in Shenzhen, and its Hong Kong dollar-denominated B-shares also surged 10 percent to HK$13.75. The company plans to convert all 1.3 billion B-shares into Hong Kong-listed H shares, according to a filing to the Shenzhen stock exchange.

Sony Corp. (6758), an exporter of consumer electronics, climbed 3.3 percent to 1,187 yen in Tokyo after its mobile unit said it will introduce new tablet in Japan this spring.

Fraser & Neave Ltd. (FNN), a Singapore-based company with businesses ranging from beverages and shopping malls, rose 1.7 percent to S$9.74. Thai billionaire Charoen Sirivadhanabhakdi’s TCC Assets raised its bid on Jan. 18 to S$9.55 a share, topping a Nov. 15 offer of S$9.08 a share from a group led by Overseas Union Enterprise Ltd., according to statement to the Singapore Stock Exchange. Overseas Union increased 0.4 percent to S$2.73.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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