Asian stocks declined for the first time in three days, led by financial companies, after Kookmin Bank and St. George Bank Ltd. reported profit fell amid turmoil in credit markets.
Kookmin, South Korea’s biggest bank, dropped to a one-week low, while St. George Bank, Australia’s fifth-largest, tumbled the most in three weeks. Shinhan Financial Group Ltd. retreated in Seoul on lower net income, while Cathay Financial Holding Co. declined in Taipei after UBS AG cut its rating on the stock.
``Results so far are not showing that things are turning around, especially in the financials,’’ said Leslie Phang, Singapore-based head of private client investments at Schroders Plc, which manages $275 billion. ``Earnings estimates in Asia haven’t been lowered enough to take into account the macroeconomic headwinds.’’
The MSCI Asia Pacific excluding Japan Index lost 0.2 percent to 498.29 as of 11:10 a.m. in Hong Kong, halting a two-day, 2 percent advance. Financial shares fell 0.9 percent, the biggest decline among the regional benchmark’s 10 industry groups.
Japan’s markets are closed for a holiday. Australia’s S&P/ASX 200 Index lost 0.5 percent. Benchmarks also retreated elsewhere in the region, except for South Korea, Malaysia and Hong Kong.
BHP Billiton Ltd., the world’s biggest mining company, advanced after crude oil prices surpassed a record $120 a barrel and copper futures gained. South Korea’s Posco rose after it agreed to buy a stake in Sandfire Resources NL, an Australian minerals explorer.
Banks Drop
U.S. stocks fell yesterday, sending the Standard & Poor’s 500 Index lower for the first time in three days. Macy’s Inc. led a decline among retailers on concern record oil prices will damp consumer spending and Yahoo! Inc. tumbled the most in almost two years after Microsoft Corp. abandoned its $50 billion bid for the company.
Kookmin, South Korea’s biggest bank, slipped 3.2 percent to 69,200 won, declining for the first time since April 24. The company said first-quarter net income fell 47 percent, prompting Morgan Stanley and UBS AG to cut their ratings on the stock.
Shinhan fell 4.2 percent to 56,400 won, set for its largest loss since Jan. 3. South Korea’s second-largest financial company said first-quarter profit dropped 35 percent on higher funding costs.
St. George, Maybank
``While the thinking prevalent a month ago that the world is over for the financial markets is no longer there, you’ll still see some more writedowns by banks,’’ said David Ng, who helps manage about $1 billion at Hwang-DBS Asset Management Sdn. in Kuala Lumpur. ``We don’t doubt there will still be credit weaknesses’’ in some banks, he said.
St. George dropped 3 percent to A$26.90, the biggest retreat since April 14, after saying net income declined 10 percent. Chief Executive Officer Paul Fegan cut his forecast for earnings per share growth to 8 percent to 10 percent for the full-year, from 10 percent estimated in February.
Cathay Financial, Taiwan’s largest financial-services company, declined 1.4 percent to NT$80.30 after UBS cut its recommendation to ``neutral’’ from ``buy’’ and HSBC Holdings Plc lowered its rating to ``neutral’’ from ``overweight.’’
Malayan Banking Bhd. dropped 3.8 percent to 7.70 ringgit, set for the lowest close since January 2004, after Citigroup Inc., UBS and Macquarie Group Ltd. cut their share-price forecasts for the Malaysia’s largest bank. The company said yesterday it will pay as much as 60.3 billion rupees ($916 million) for a 20 percent stake in Pakistan’s MCB Bank Ltd.
Oil, Copper
Limiting declines, BHP Billiton advanced 0.6 percent to A$44.40. Rio Tinto Group, the world’s third-biggest mining company, rose 1.3 percent to A$140.81.
Crude oil for June delivery yesterday rose to an intraday high of $120.36 a barrel after the Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the U.S. economy, grew for the first time since December, signaling higher energy use.
Meanwhile, copper prices advanced 3.3 percent yesterday in New York, while gold added 1.9 percent.
Newcrest Mining Ltd., Australia’s largest gold producer, added 2.6 percent to A$29.03. Cnooc Ltd., China’s biggest offshore oil explorer, jumped 2.8 percent to HK$13.88 in Hong Kong.
Posco, Asia’s third-biggest steelmaker, climbed 3.1 percent to 509,000 won, on course for its highest close since April 7. The company agreed to buy a 19.9 percent stake in Sandfire Resources for A$7.2 million ($6.7 million).
Shares of Sandfire surged 7.9 percent to 48 Australian cents.
Source : Bloomberg
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