Asian stocks fell this week as the deepening global recession slashed consumer demand, driving commodity prices lower and dragging down materials companies and oil drillers.
BHP Billiton Ltd, the world’s biggest mining company, dropped 16 percent after oil fell more than US$100 a barrel from its record in July and copper prices slumped. Honda Motor Co sank 21 percent as last month’s US sales plunged the most since 1981. Surfwear maker Billabong International Ltd tumbled 25 percent in Sydney after cutting its earnings forecast as its US customers deferred deliveries amid the economic contraction.
“The world is in recession and earnings will fall next year for most companies the world over, including Asia,” said Hugh Young, managing director at Aberdeen Asset Management Ltd in Singapore, overseeing about US$45 billion. “Asia is in pretty good shape for surviving, not in great shape for growing.”
The MSCI Asia-Pacific Index fell 3.8 percent to 79.52 this week. Raw-materials producers had the biggest percentage decline among the 10 industry groups.
MSCI’s Asian index has plunged 50 percent this year as global financial companies’ losses and writedowns from the collapse of the US subprime-mortgage market neared US$1 trillion. Shares on the MSCI gauge are now valued at 9.7 times trailing earnings after falling to as low as 8.2 times last month. That’s half the 19.5 times on Nov. 11 last year, when the measure hit a peak of 172.32. Prior to the current market turmoil, the price-earnings ratio never dropped below 10, according to Bloomberg data.
TAIPEI
Taiwanese share prices are expected to face further volatility next week amid uncertainty over electronics as global economic weakness compromises the sector’s profitability, dealers said.
Investors have turned more cautious after the high-tech sector was hard hit this week with several heavyweights having lowered their fourth quarter earnings outlook, they said.
They are looking into the sector’s sales data for last month, which are due by Wednesday, for a clear indication amid falling global consumption, they added.
However, financials may offset the impact from the high-tech sector’s losses as investors have hopes that Taiwan and China will sign a deal next year to increase banking exchanges, they said.
The market is expected to test the key 4,000-point support level in the week ahead, while any technical rebound may face stiff resistance at around 4,400 to 4,500 points, dealers said.
For the week to Friday, the weighted index lost 235.42 points, or 5.28 percent, at 4,225.07 after a 6.94 percent rise a week earlier.
Average daily turnover stood at NT$54.83 billion (US$1.64 billion), compared with NT$53.51 billion the previous week.
Other regional markets:
TOKYO: The benchmark Nikkei-225 index dropped 6.73 points, or 0.08 percent, to 7,917.51. The broader TOPIX index of all first section issues slipped 2.86 points, or 0.36 percent, to 786.02. Major bank stocks remained under pressure.
KUALA LUMPUR: Malaysian shares closed 1 percent lower. The Kuala Lumpur Composite Index lost 8.58 points to close at 838.28.
JAKARTA: Indonesian shares ended 0.3 percent lower. The Jakarta Composite Index closed 2.98 points lower at 1,202.34.
MANILA: Philippine share prices closed 0.1 percent lower. The composite index lost 1.93 points to 1,888.96.
WELLINGTON: New Zealand shares closed 0.88 percent lower. The benchmark NZX-50 index fell 23.96 points to 2,706.72.
MUMBAI: Indian shares fell 2.87 percent as investors locked in gains ahead of an economic stimulus package expected from India’s central bank on yesterday. The benchmark 30-share SENSEX fell 264.55 points to 8,965.2.
REMINDER: Of the 6.78 million doses of flu vaccine Taiwan purchased for this flu season, about 200,000 are still available, an official said, following Big S’ death As news broke of the death of Taiwanese actress and singer Barbie Hsu (徐熙媛), also known as Big S (大S), from severe flu complications, the Centers for Disease Control (CDC) and doctors yesterday urged people at high risk to get vaccinated and be alert to signs of severe illness. Hsu’s family yesterday confirmed that the actress died on a family holiday in Japan due to pneumonia during the Lunar New Year holiday. CDC Deputy Director-General Tseng Shu-hui (曾淑慧) told an impromptu news conference that hospital visits for flu-like illnesses from Jan. 19 to Jan. 25 reached 162,352 — the highest
COMBINING FORCES: The 66th Marine Brigade would support the 202nd Military Police Command in its defense of Taipei against ‘decapitation strikes,’ a source said The Marine Corps has deployed more than 100 soldiers and officers of the 66th Marine Brigade to Taipei International Airport (Songshan airport) as part of an effort to bolster defenses around the capital, a source with knowledge of the matter said yesterday. Two weeks ago, a military source said that the Ministry of National Defense ordered the Marine Corps to increase soldier deployments in the Taipei area. The 66th Marine Brigade has been tasked with protecting key areas in Taipei, with the 202nd Military Police Command also continuing to defend the capital. That came after a 2017 decision by the ministry to station
TRIP TO TAIWAN: The resumption of group tours from China should be discussed between the two agencies tasked with handling cross-strait tourism, the MAC said President William Lai (賴清德) yesterday reassured China-based businesspeople that he would follow former president Tsai Ing-wen’s (蔡英文) cross-strait policy to facilitate healthy and orderly exchanges with Beijing and build a resilient economy. “As president, I have three missions. First, I will follow president Tsai’s ‘four commitments’ to ensure that the country continues to exist and survive,” Lai told participants at a Lunar New Year event in Taipei hosted by the Straits Exchange Foundation (SEF). Lai said his second mission is to uphold the “four pillars of peace” by bolstering national defense, developing a growing and resilient economy, building partnerships with
‘INVESTMENT’: Rubio and Arevalo said they discussed the value of democracy, and Rubio thanked the president for Guatemala’s strong diplomatic relationship with Taiwan Guatemalan President Bernardo Arevalo met with US Secretary of State Marco Rubio in Guatemala City on Wednesday where they signed a deal for Guatemala to accept migrants deported from the US, while Rubio commended Guatemala for its support for Taiwan and said the US would do all it can to facilitate greater Taiwanese investment in Guatemala. Under the migrant agreement announced by Arevalo, the deportees would be returned to their home countries at US expense. It is the second deportation deal that Rubio has reached during a Central America trip that has been focused mainly on immigration. Arevalo said his
RSS