Asian stocks slumped for a third week amid mounting concern the financial crisis is “reigniting” as the deepening global recession cut into corporate profits.
HSBC Holdings PLC, Europe’s largest bank, lost 11 percent for the week after the UK and US governments were forced to provide new bailouts for banks and New York University professor Nouriel Roubini said credit losses could surpass US$3 trillion. Sony Corp plunged 13 percent after forecasting a record loss, while Samsung Electronics Co, the world’s largest liquid-crystal display TV maker, dropped 5.8 percent after posting its first quarterly loss.
The MSCI Asia Pacific Index slid 5.2 percent last week to 80.32, the lowest level since Dec. 5. The benchmark measure fell for a third consecutive week, the first time since October it has done so.
Financial companies posted the biggest declines on the benchmark index, which slumped by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to cut jobs amid slumping profits.
Japan’s Nikkei 225 Stock Average lost 5.9 percent in the week as the yen’s climb to the highest since 1995 against the dollar added to exporters’ woes. Most benchmark indexes retreated across the region, except in China, where the central government unveiled additional measures to support the economy.
Concerns banks will be nationalized weighed on shares of lenders throughout the world. The UK government moved to raise its stake in Royal Bank of Scotland Group PLC, while Bank of America Corp received a bailout and was forced to slash its dividend to US$0.01.
HSBC tumbled 11 percent to HK$57.45 (US$7.40). Morgan Stanley and Goldman Sachs Group Inc have predicted the bank, which gets about a fifth of its revenue in North America, may have to raise additional capital.
US financial losses from the credit crisis may reach US$3.6 trillion, suggesting the banking system is “effectively insolvent,” Roubini, who predicted last year’s economic crisis, said on Tuesday. Institutions worldwide have so far reported writedowns and losses of more than US$1 trillion.
Mizuho Financial Group Inc, Japan’s second-largest listed lender, dropped 15 percent to ¥212 (US$2.39). National Australia Bank Ltd., the country’s biggest by assets, slumped 12 percent to A$16.94.
Sony, the maker of PlayStation3 game consoles, lost 13 percent to ¥1,802. The company said it expects a record ¥260 billion operating loss for the year ending in March amid falling demand, the strong yen and costs to restructure its business.
“Sony’s loss forecast was an order of magnitude greater than what some analysts had estimated,” Soichiro Monji, chief strategist at Daiwa SB Investments Ltd, which manages the equivalent of US$53 billion, said in an interview with Bloomberg Television. “The bad news about earnings and economies is accumulating.”
China last week reported its slowest rate of growth in seven years as the economy grew at an annualized 6.8 percent pace in the fourth quarter. South Korea’s central bank also said the country’s economy shrank a 5.6 percent last quarter, the biggest decline since the Asian financial crisis.
Samsung lost 5.8 percent to 442,000 won (US$323) as it reported a fourth-quarter net loss amid slumping demand for its computer chips, televisions and mobile-phone handsets.
TAIPEI
The TAIEX closed up 0.13 percent to 4,247,97 on Wednesday before the Lunar New Year holiday. Markets will reopen on Feb. 2.
Other regional markets:
KUALA LUMPUR: Down 0.7 percent. The Kuala Lumpur Composite Index fell 6.33 points to close at 872.69 points with a turnover of 277.13 million shares worth 388.36 million ringgit (US$107.43 million).
JAKARTA: Down 0.9 percent. The Jakarta Composite Index dropped 11.74 points to 1,315.59 in thin volume.
MANILA: Down 0.3 percent. The composite index lost 6.18 points to 1,857.34, while the all shares index shed 0.5 percent to 1,202.41.
WELLINGTON: Down 1.07 percent. The NZX-50 index fell 29.33 points to close at 2,705.09. Turnover was NZ$92.4 million (US$48.8 million).
MUMBAI: Down 1.58 percent. The benchmark 30-share SENSEX index was 139.49 points
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
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