Bloomberg News

Most Asia Stocks Rise as Shippers, Olympus Rebound; Esprit Falls

December 29, 2011

Dec. 29 (Bloomberg) -- Most Asian stocks rose with China Shipping Container Co. leading shippers higher and Olympus Corp. rebounded. China Mengniu Dairy Co., the country’s biggest milk producer, dropped for a second day after a batch of tainted milk was found.

China Shipping Container gained 2.8 percent after saying it would raise rates. Olympus, the endoscope maker that has lost half of its value amid an accounting scandal, gained 5.4 percent to lead advancing shares on the MSCI Asia Pacific Index. Canon Inc., a camera maker whose biggest market is Europe, slid 0.4 percent in Tokyo after the euro dropped to a 10-year low against the yen, clouding the earnings outlook for Asia’s exporters. China Mengniu slid 7.4 percent after hackers broke into its website.

The Asia-Pacific gauge fell 0.2 percent, to 112.60 as of 8:02 p.m. in Tokyo, with about eight stocks rising for every seven that fell.

Shares dropped as much as 0.8 percent after the publication of record lending figures by the European Central Bank highlighted the magnitude of the debt crisis. Asia’s benchmark index has fallen 18 percent in 2011, its first full-year decline since 2008. For the month, MSCI Asia Pacific Index is set to slip 0.7 percent.

“Europe can’t avoid an economic slowdown,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “I don’t think the market has priced that in. The ECB isn’t taking drastic action, but it’s better than doing nothing.”

The Standard & Poor’s 500 Index lost 1.3 percent yesterday in New York after the ECB said its balance sheet ballooned to a record following last week’s lending to banks. The loans were meant to encourage banks to buy government bonds. Futures on the S&P 500 rose 0.2 percent today.

Shippers Climb

Japan’s Nikkei 225 Stock Average fell 0.3 percent. Trading volume was about half the 100-day average. Australia’s S&P/ASX 200 lost 0.4 percent, while South Korea’s Kospi Index was little changed before a market holiday tomorrow. Hong Kong’s Hang Seng Index slid 0.7 percent.

Among stocks that advanced today, China Shipping Container Co. gained 2.8 percent to HK$1.82 after the company said it will charge additional cargo fees from next month. Taiwan’s Wan Hai Lines Ltd. rose 2.5 percent. A gauge of maritime transport companies, the worst performing industry in Japan’s Topix Index, climbed 0.6 percent today.

PetroChina Co., Asia’s biggest company by market value, added 0.4 percent to HK$9.71 after it started delivering gas to a Chinese pipeline from its terminal in Dalian.

Exporters declined after the euro weakened against the yen to its lowest level since June 2001. Canon, which makes almost a third of its sales in Europe, lost 0.4 percent to 3,400 yen. Esprit Holdings Ltd., a clothier that counts the market as its biggest, slid 1.8 percent to HK$10.02 in Hong Kong. The stock plunged 72 percent this year through yesterday.

No Concrete Progress

“European policy makers have introduced various measures to ease concern about the financial system as we pass Christmas and enter the next year, but they failed to make concrete progress,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. “It’s highly uncertain how the euro will move beyond year-end, and some people may try to get ahead of the curve and sell the currency.”

China Mengniu Dairy Co., which this week said excessive levels of a toxin were found in its milk, slid after hackers broke into its website. The shares lost 7.4 percent to HK$18.52, the biggest drop on the MSCI Asia Pacific Index.

Elpida Memory Inc. lost 5.1 percent to 351 yen. The Japanese chipmaker may seek to delay repayment of a 30 billion yen ($386 million) government bailout received in 2009, the Asahi newspaper reported, without saying where it got the information.

Rare Earths

Lynas Corp., an Australian miner of rare earths, 5.3 percent to A$1.065 after JPMorgan Chase & Co. said rare-earth prices may fall. The Chinese government said this week it will keep export quotas for the materials virtually unchanged next year. That, coupled with planned increases in production by Lynas and a U.S-based miner, will “will put additional downward pressure” on prices, JPMorgan said.

Olympus rose 5.4 percent to 1,005 yen. The stock has fallen about 60 percent since Oct. 13 amid a $1.7 billion accounting scandal.

The Asia Pacific gauge has lost about $1.79 trillion this year amid concern Europe’s three-year-old debt crisis will drag the global economy into recession. Stocks on Asia’s benchmark are valued at 12.6 times estimated earnings on average, compared with 12.6 times for the S&P 500 and 10.4 times for the Stoxx Europe 600 Index.

Utilities have lost 27 percent this year, falling the most among the 10 industry groups on the Asian gauge. Japanese power producers tumbled amid a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. Tepco, as the utility is known, has lost 91 percent this year, the biggest drop on the MSCI All Country World Index, which includes both emerging and developed markets.

--With assistance from Masaaki Iwamoto in Tokyo. Editors: Nick Gentle, Jason Clenfield

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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