Asian stocks dropped for the second straight week on concern that companies will book losses from Dubai’s plan to delay debt payments and that share sales by banks will erode the value of existing holdings.
Kajima Corp fell 16 percent after Daiwa Securities SMBC Co said Japanese builders may lose “tens of billions of yen” if Dubai’s investment fund succeeds in delaying debt payments. Bank of China Ltd (中國銀行), which said this week it’s studying options to replenish capital, dropped 13 percent. Sony Corp, the maker of the PlayStation 3 game console, slid 6 percent as the US dollar sank to a 14-year low against the yen. Santos Ltd, Australia’s third-biggest producer of oil and gas, slumped 4.6 percent as crude oil prices retreated in New York.
The MSCI Asia-Pacific Index fell 2.6 percent to 113.90 this week, dragged down the most by financial companies. The gauge has climbed 61 percent from its lowest level in more than five years on March 9, amid signs government stimulus measures are reviving economies around the world.
“People are worried about the contagion effect from Dubai,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which oversees US$75 billion. “Events like this bring back all the bad memories from the global financial crisis. The market has rallied a long way and is very sensitive to any bad news around debt default or financial problems.”
Japan’s Nikkei 225 Stock Average index lost 4.4 percent for a fifth weekly drop, even as exports last month fell at the slowest pace in a year as government spending helped bolster demand.
South Korea’s KOSPI Index sank 5.9 percent, during a week in which a central bank survey showed manufacturers’ confidence slipped to the lowest level in four months.
Hong Kong’s Hang Seng Index declined 5.9 percent, and the Shanghai Composite Index retreated 6.4 percent. Vietnam’s VN Index tumbled 12 percent as the central bank devalued the currency to curb inflation and narrow the trade deficit.
Taiwanese shares are expected to see further falls next week after Dubai’s shock call to suspend the debt of a key state firm caused new jitters over the global financial health, dealers said on Friday.
However, the government may step in to support the market and offset the pressure, wary of allowing too somber a mood ahead of local elections scheduled for Saturday, according to dealers.
For the week to Friday, the weighted index fell 192.06 points or 2.50 percent to 7,490.91 after a 0.23 percent increase a week earlier.
Average daily turnover stood at NT$120.85 billion, compared with NT$134.30 billion a week ago.
Other regional markets on Friday:
SYDNEY: Down 2.90 percent from Thursday. The S&P/ASX 200 suffered its biggest one-day fall in five months, losing 136.5 points, to end at 4,572.1.
BANGKOK: Down 0.78 percent from Thursday. The SETlost 5.36 points to close at 680.37.
MANILA: Down 1.45 percent from Thursday. The composite index shed 44.85 points to 3,044.97.
WELLINGTON: Down 1.05 percent from Thursday. The NZX-50 index fell 32.88 points to 3,094.44
MUMBAI: Down 1.32 percent from Thursday. The SENSEX fell 222.92 points to 16,632.01.
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
SECURITY: The New Zealand and Australian navies also sailed military vessels through the Strait yesterday to assert the right of freedom of navigation The Japan Maritime Self-Defense Force on Wednesday made its first-ever transit through the Taiwan Strait in response to the intrusion by a Chinese reconnaissance aircraft into Japan’s sovereign airspace last month, Yomiuri Shimbun reported yesterday. The Japanese news platform reported that the destroyer JS Sazanamisailed down through the Taiwan Strait on Wednesday, citing sources in the Japanese government with knowledge of the matter. Japanese Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on the reports at a regular briefing because they concern military operations. Military vessels from New Zealand and Australia also sailed through the Strait on the same day, Wellington’s defense ministry
SOVEREIGNTY EMPHASIZED: President William Lai said that Taiwan ‘absolutely will not sign’ an agreement with Beijing implying that the nation is part of China Taiwan hopes to join like-minded nations under the democratic umbrella and jointly counter authoritarian aggression, President William Lai (賴清德) said in a prerecorded speech during the annual Concordia Summit in New York on Tuesday. Lai addressed the summit via video at Concordia’s invitation, using the opportunity to speak on the issue of Chinese aggression toward Taiwan and Beijing’s distortion of UN Resolution 2758. Lai’s comments came on the heels of the 79th session of the UN General Assembly, which opened on Tuesday. China has “distorted” UN Resolution 2758 “in support of its ‘one China’ principle,” he said. Through its misinterpretation