Asian stocks fall for second week, Chinese developers lead drop
Monday, 21 December 2009
HONG KONG, Dec 20 (Bloomberg): Asian stocks fell for a second week, led by Chinese developers on concern the nation will step up measures to curb property speculation. Japanese banks rose on optimism they'll have at least a decade to implement stricter capital rules.
Greentown China Holdings Ltd, a real estate developer in the country, tumbled 18 per cent. Mongolia Energy Corp sank 22 per cent on speculation the Hong Kong-listed exploration company will report a first-half earnings loss next week. Mizuho Financial Group Inc., Japan's third-largest bank by market value, soared 13 per cent. Axa Asia Pacific Holdings Ltd rallied 12 per cent after National Australia Bank Ltd offered A$13.3 billion ($11.8 billion) to buy unit of French insurer Axa SA.
"China's asset markets are a ponzi scheme," former Morgan Stanley chief Asian economist Andy Xie said in a Bloomberg Television interview in Hong Kong. "Property is heading for one huge bust that will take a year and a half to unfold."
The MSCI Asia Pacific Index fell 1.8 per cent this week to 117.52, adding to a 0.4 per cent drop last week. Japan's Nikkei 225 Stock Average added 0.4 per cent this week, while South Korea's Kospi Index slid 0.6 per cent.
Hong Kong's Hang Seng Index declined 3.3 per cent, and the Shanghai Composite Index retreated 4.1 per cent. Australia's S&P/ASX 200 Index added 0.3 per cent.
The MSCI gauge has climbed 31 per cent this year, set for its biggest annual gain since 2003, on signs government spending and lower interest rates bolstered economies. Stocks in the benchmark trade at 22 times estimated earnings, compared with 17.6 times for the Standard and Poor's 500 Index in the US and 15.5 times for the Dow Jones Stoxx 600 Index in Europe.
Concerns about asset bubbles and expectations that the US Federal Reserve will raise interest rates next year dragged Asian stocks this week. China's lenders declined after a regulatory official said bad loans pose a long-term risk.
Greentown China plunged 18.4 per cent to HK$12.06. Sino-Ocean Land Holdings Ltd, a Beijing-based developer of residential, office and commercial property, slumped 17 per cent to HK$6.83. Hopson Development Holdings Ltd, a Hong Kong-based developer of real estate in China, sank 17 per cent to HK$10.66.
China's government set the deposit requirement for land purchases at a minimum of 50 per cent of the total price, according to a statement issued by the ministry of finance, the People's Bank of China and other agencies.
The new down-payment level is an increase, said Zhou Hu, a real estate analyst at Bohai Securities Co in Beijing. China didn't previously have a standard deposit rule for land purchases, Zhou said.
The Xinhua News Agency said the government will target "excessive" property prices in some cities, and plans to "speed the construction of low-cost housing" and strengthen supervision of the real-estate market.
Mongolia Energy plunged 22 per cent to HK$4.14, paring its gains this year to 74 per cent, on speculation the company will report a first-half earnings loss next week.
"Investors are taking profit ahead of a possible loss in their results," said Timothy Kwai, an analyst at Quam Securities in Hong Kong. "It's quite a volatile stock as the company is investing a lot ahead of going into production next year."
Mizuho soared 13 per cent to 179 yen. Mitsubishi UFJ Financial Group Inc, Japan's largest bank by market value, climbed 1.5 per cent to 462 yen. Sumitomo Mitsui Financial Group Inc, the No 2, advanced 4.8 per cent to 2,840 yen.
Greentown China Holdings Ltd, a real estate developer in the country, tumbled 18 per cent. Mongolia Energy Corp sank 22 per cent on speculation the Hong Kong-listed exploration company will report a first-half earnings loss next week. Mizuho Financial Group Inc., Japan's third-largest bank by market value, soared 13 per cent. Axa Asia Pacific Holdings Ltd rallied 12 per cent after National Australia Bank Ltd offered A$13.3 billion ($11.8 billion) to buy unit of French insurer Axa SA.
"China's asset markets are a ponzi scheme," former Morgan Stanley chief Asian economist Andy Xie said in a Bloomberg Television interview in Hong Kong. "Property is heading for one huge bust that will take a year and a half to unfold."
The MSCI Asia Pacific Index fell 1.8 per cent this week to 117.52, adding to a 0.4 per cent drop last week. Japan's Nikkei 225 Stock Average added 0.4 per cent this week, while South Korea's Kospi Index slid 0.6 per cent.
Hong Kong's Hang Seng Index declined 3.3 per cent, and the Shanghai Composite Index retreated 4.1 per cent. Australia's S&P/ASX 200 Index added 0.3 per cent.
The MSCI gauge has climbed 31 per cent this year, set for its biggest annual gain since 2003, on signs government spending and lower interest rates bolstered economies. Stocks in the benchmark trade at 22 times estimated earnings, compared with 17.6 times for the Standard and Poor's 500 Index in the US and 15.5 times for the Dow Jones Stoxx 600 Index in Europe.
Concerns about asset bubbles and expectations that the US Federal Reserve will raise interest rates next year dragged Asian stocks this week. China's lenders declined after a regulatory official said bad loans pose a long-term risk.
Greentown China plunged 18.4 per cent to HK$12.06. Sino-Ocean Land Holdings Ltd, a Beijing-based developer of residential, office and commercial property, slumped 17 per cent to HK$6.83. Hopson Development Holdings Ltd, a Hong Kong-based developer of real estate in China, sank 17 per cent to HK$10.66.
China's government set the deposit requirement for land purchases at a minimum of 50 per cent of the total price, according to a statement issued by the ministry of finance, the People's Bank of China and other agencies.
The new down-payment level is an increase, said Zhou Hu, a real estate analyst at Bohai Securities Co in Beijing. China didn't previously have a standard deposit rule for land purchases, Zhou said.
The Xinhua News Agency said the government will target "excessive" property prices in some cities, and plans to "speed the construction of low-cost housing" and strengthen supervision of the real-estate market.
Mongolia Energy plunged 22 per cent to HK$4.14, paring its gains this year to 74 per cent, on speculation the company will report a first-half earnings loss next week.
"Investors are taking profit ahead of a possible loss in their results," said Timothy Kwai, an analyst at Quam Securities in Hong Kong. "It's quite a volatile stock as the company is investing a lot ahead of going into production next year."
Mizuho soared 13 per cent to 179 yen. Mitsubishi UFJ Financial Group Inc, Japan's largest bank by market value, climbed 1.5 per cent to 462 yen. Sumitomo Mitsui Financial Group Inc, the No 2, advanced 4.8 per cent to 2,840 yen.