Asian Stocks Drop for Second Day as Job Cuts Mount; HSBC Falls
Nov. 18 (Bloomberg) — Asian stocks fell for a second day, led by financial and technology companies, as the global economic recession drives companies to reduce employee numbers and output.
HSBC Holdings Plc fell 2.2 percent after saying it has cut 500 jobs in Asia. Taiwan Semiconductor Manufacturing Co. slid 5.4 percent after Wall Street Journal said the company halted hiring. Queensland Ores Ltd. fell by a record 67 percent after stopping production at an Australia mine. Mitsubishi Estate Co., Japan’s biggest property developer by market value, lost 6.5 percent after a newspaper said the nation’s office market is weakening.
“We’re seeing a rebasing of expectations to a much lower growth environment,” Prasad Patkar, who helps manage about A$1.3 billion at Platypus Asset Management in Sydney. “Markets can adjust to recessions, but a complete meltdown scenario, however small, remains a probability.”
The MSCI Asia Pacific Index lost 1.4 percent to 81.63 as of 11:56 a.m. in Tokyo, extending yesterday’s 0.4 percent drop. The measure is six points away from a five-year low reached at the close on Oct. 27. Almost three stocks retreated for each that rose today.
Shares on the gauge are valued at 10 times trailing earnings and fell to 8.2 times last month, the lowest level since at least 1995, Bloomberg data shows. The index has lost 48 percent this year as the collapse of the U.S. mortgage market sparked $960 billion in losses and writedowns at financial companies.
Citigroup Inc., the fourth-largest U.S. bank by market value, said yesterday it will eliminate 52,000 jobs over the next year, twice the target announced last month, as loan losses surge and the economy shrinks.
Japan’s Nikkei 225 Stock Average slumped 1 percent to 8,439.17. Sony Financial Holdings Inc. plunged after reporting a drop in earnings.
South Korea’s Kospi Index slid 2.5 percent, declining for a fifth day. Samsung Electronics Co., the world’s biggest computer- memory maker, led declines after a U.S. company moved to block imports of electronics containing Samsung chips, citing patent infringement.
Limiting losses in Australia, Macquarie Group Ltd., Australia’s biggest securities firm, advanced 17 percent after profit beat analysts’ estimates.
Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. Yahoo! Inc. rose as much as 4.4 percent in after-hours trading after saying Jerry Yang will step down from his role as Chief Executive Officer. The S&P 500 slid 2.6 percent yesterday as a record contraction in New York manufacturing and Citigroup’s plan to increase job losses spurred concern the recession will deepen.
In Hong Kong, HSBC declined 2.3 percent to HK$80.05. Some 90 percent of the job cuts will fall in the city, the bank said. Two months ago, HSBC fired another 1,100 workers in its global banking and markets division.
Taiwan Semiconductor, the world’s biggest contract chip maker by sales, dropped 5.4 percent to NT$38.6. The company has halted hiring because of deteriorating economic conditions, the Wall Street Journal reported, citing J.H. Tzeng, a company spokesman. TSMC, which has 23,000 employees worldwide, didn’t say when it set the freeze or when it expects the hiring pause to end, the report said.
Hon Hai Precision Industry Co., the world’s largest contract electronics maker, tumbled 4.1 percent to NT$58.5 in Taipei after HSBC said the company’s earnings have peaked and cut the shares to “neutral” from “overweight.”
Samsung, the world’s biggest computer-memory maker, lost 2.3 percent to 440,000 won. Spansion Inc. filed a complaint with the U.S. International Trade Commission to block the import of a 100 million electronic devices, including Apple Inc.’s iPod, saying Samsung’s chips violate its patents.
Queensland Ores plunged 67 percent to 1.1 Australian cents after stopping production at a tungsten and molybdenum mine after metal prices fell and it failed to meet ore-grade targets. The slump was the biggest since the stock began trading in May 2005.
Mitsubishi Estate dropped 6.5 percent to 1,306 yen. Mitsui Fudosan Co., the largest Japanese developer, sank 3.6 percent to 1,333 yen. Nomura Real Estate Holdings Inc. lost 8.5 percent to 1,674 yen.
Vacancy rates for offices in major cities including Osaka and Nagoya have climbed, with Osaka’s rate at a 2-year high, the Nikkei newspaper reported. Additionally, some cities are going to experience a glut of new office space in coming years that is unlikely to be filled, according the newspaper.
Sony Financial, which operates Japan’s fifth-largest insurer by value, slumped 8.3 percent to 267,200 yen, after saying net income dropped 27 percent in the six months to Sept. 30 because of losses on securities and an increase in insurance payouts.
Macquarie rallied 17 percent to A$24.19, the biggest gain on MSCI’s Asian index. The company posted a 43 percent drop in profit to A$604 million ($392 million) for the six months to Sept. 30 as falling asset prices forced writedowns. That beat the average estimate of A$592.4 million from analysts surveyed by Bloomberg.