Asian stocks extend weekly decline
Monday, 6 August 2007
SINGAPORE, Aug 5 (Bloomberg): Asian stocks fell for a second week, led by Macquarie Bank Ltd. and Taiwan Life Insurance Co., on concern the US subprime loans crisis is spreading to the region's financial companies.
Macquarie Bank, Australia's largest securities firm, erased its gains for the year after saying investors in some of its funds may lose as much as 25 per cent of their money. Taiwan Life had its worst week in more than three years after reporting a hedge fund loss.
``Issues once specific to America are now flowing through to the rest of the world,'' said Hans Kunnen, who helps manage $117 billion at Colonial First State Global Asset Management in Sydney. ``People are nervous because Macquarie looks and smells a lot like the companies that have been affected by this in the US''
Losses were limited after Sumitomo Realty & Development Co. and Hang Seng Bank Ltd. joined other companies in the region in reporting higher profits.
The Morgan Stanley Capital International Asia-Pacific Index dropped 1.1 per cent to 152.81. The measure plunged 3.9 per cent in the five days ended July 27, the worst weekly drop since July 14, 2006, amid a rout that wiped out $2.1 trillion in global market value.
Japan's Nikkei 225 Stock Average fell 1.8 per cent, sliding for a third straight week. Benchmarks also declined elsewhere, except in Pakistan and China, where the CSI 300 Index climbed to a record high.
Shares recovered some lost ground in the US and Europe this week as better-than-forecast earnings helped allay concerns that the subprime crisis will slow economic growth. The Standard & Poor's 500 Index lost 1.7 per cent, after shedding 4.9 per cent the previous week, its biggest weekly loss since 2002, while the Dow Jones Stoxx 600 Index slipped 0.2 per cent.
Macquarie Bank lost 7.6 per cent, adding to its 10 per cent drop last week. Macquarie Fortress Investments Ltd. was forced to sell assets and use the proceeds to reduce borrowings and comply with lending covenants, according to a company statement. Investors may lose A$300 million ($256 million), the Australian newspaper reported.
Bear Stearns, manager of two hedge funds that collapsed last month, this week said it blocked redemptions from its Bear Stearns Asset-Backed Securities Fund.
Macquarie Bank, Australia's largest securities firm, erased its gains for the year after saying investors in some of its funds may lose as much as 25 per cent of their money. Taiwan Life had its worst week in more than three years after reporting a hedge fund loss.
``Issues once specific to America are now flowing through to the rest of the world,'' said Hans Kunnen, who helps manage $117 billion at Colonial First State Global Asset Management in Sydney. ``People are nervous because Macquarie looks and smells a lot like the companies that have been affected by this in the US''
Losses were limited after Sumitomo Realty & Development Co. and Hang Seng Bank Ltd. joined other companies in the region in reporting higher profits.
The Morgan Stanley Capital International Asia-Pacific Index dropped 1.1 per cent to 152.81. The measure plunged 3.9 per cent in the five days ended July 27, the worst weekly drop since July 14, 2006, amid a rout that wiped out $2.1 trillion in global market value.
Japan's Nikkei 225 Stock Average fell 1.8 per cent, sliding for a third straight week. Benchmarks also declined elsewhere, except in Pakistan and China, where the CSI 300 Index climbed to a record high.
Shares recovered some lost ground in the US and Europe this week as better-than-forecast earnings helped allay concerns that the subprime crisis will slow economic growth. The Standard & Poor's 500 Index lost 1.7 per cent, after shedding 4.9 per cent the previous week, its biggest weekly loss since 2002, while the Dow Jones Stoxx 600 Index slipped 0.2 per cent.
Macquarie Bank lost 7.6 per cent, adding to its 10 per cent drop last week. Macquarie Fortress Investments Ltd. was forced to sell assets and use the proceeds to reduce borrowings and comply with lending covenants, according to a company statement. Investors may lose A$300 million ($256 million), the Australian newspaper reported.
Bear Stearns, manager of two hedge funds that collapsed last month, this week said it blocked redemptions from its Bear Stearns Asset-Backed Securities Fund.