Bloomberg News

Asian Stocks Drop as Panasonic Plunges on Loss Forecast

November 01, 2012

Asian stocks fell as Panasonic Corp. led declines among Japanese electronics makers after forecasting a loss 30 times bigger than analysts estimated, overshadowing a report China’s manufacturing output expanded for the first time in three months.

Panasonic plunged 19 percent, the most since at least 1974, to lead a retreat on the MSCI Asia Pacific Index. (MXAP) Arrium Ltd. tumbled 13 percent after a consortium that includes Noble Group Ltd. and Posco dropped an attempt to buy the Australian steelmaker. Sands China Ltd. climbed 2.9 percent, pacing gains among Macau casino operators, as gaming revenue in the Chinese city rose to a record last month.

The MSCI Asia Pacific Index fell 0.1 percent to 121.82 as of 7:09 p.m. in Tokyo, paring losses of as much as 0.8 percent. The benchmark index slid 0.4 percent last month as more than half the companies that reported earnings missed analyst estimates, according to data compiled by Bloomberg News.

“While we’ve been seeing improving economic data, it’s too early to get positive on the market given the profit warnings,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Banking, which oversees about $207 billion. “Most indices have done quite well and investors are now focusing on fundamentals.”

Asia’s benchmark index rose 5.2 percent as of yesterday since Sept. 6 when European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-purchase program and the U.S. Federal Reserve announced a week later a third round of quantitative easing. Stocks on the gauge traded at an average of 12.9 times estimated earnings, compared with 13.5 for the S&P 500 Index and 12.1 for the Stoxx Europe 600 Index.

China PMI

Australia’s S&P/ASX 200 declined 1.3 percent as a report showed the nation’s manufacturing output contracted for an eighth month and National Australia Bank Ltd. dropped for a second day. South Korea’s Kospi Index dropped 0.7 percent, Singapore’s Straits Times Index lost 0.4 percent.

Japan’s Nikkei 225 Stock Average (NKY) added 0.2 percent, erasing losses of as much as 0.6 percent, after the yen depreciated. A weaker currency boosts earnings of Japanese exporters when repatriated.

Hong Kong’s Hang Seng Index gained 0.8 percent, while the Shanghai Composite Index climbed 1.7 percent. China’s Purchasing Managers’ Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That matched the median forecast in a Bloomberg News survey of 30 economists. A reading above 50 indicates expansion.

Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. Most U.S. stocks rose yesterday as equity markets reopened after Hurricane Sandy caused a two-day closure, the longest weather-related shutdown since 1888.

Panasonic, Sony

Gauges tracking electronics makers and raw material producers posted the biggest declines among the 10 industry groups in the MSCI Asia Pacific Index.

Panasonic slumped 19 percent to 414 yen in Tokyo. Japan’s second-biggest television maker said it may post a net loss of 765 billion yen ($9.6 billion) in the year ending March, scrapping its May projection of 50 billion yen in net income.

Sharp (6753) Corp. and Sony Corp. declined ahead of the release of their results. Sharp, which widened its full-year loss forecast to 450 billion from 250 billion yen after the Japanese market closed, slid 1.7 percent to 169 yen. Sony (6758), which unexpectedly posted a loss for the seventh straight quarter, sank 4.1 percent to 915 yen.

United Microelectronics Corp., the world’s second-largest contract maker of chips, slid 2.8 percent to NT$10.55 in Taipei after posting third-quarter profit that missed estimates.

Bad Debts

Arrium tumbled 13 percent to 68.5 Australian cents. A consortium that included Noble Group and Posco dropped a takeover attempt after the steelmaker rejected an improved offer of A$1.2 billion ($1.24 billion).

National Australia Bank dropped for a second day, losing 3 percent to A$25.02, after yesterday reporting full-year earnings fell for the first time since 2009 as a weaker U.K. economy forced it to set aside more money for bad debts.

Among stocks that advanced, Macau casino operators rose as a report showed gaming revenue in the city climbed 3.2 percent to 27.7 billion patacas ($3.5 billion) in October, topping a record 26.85 billion patacas in the same month a year earlier.

Sands China climbed 2.9 percent to HK$30. Galaxy Entertainment Group Ltd. (27), the casino operator founded by billionaire Lui Che-Woo, rose 1.3 percent to HK$27. Wynn Macau Ltd. jumped 2.7 percent to HK$22.22.

Softbank Corp., the first Japanese carrier to offer Apple Inc.’s iPhone, gained 3.6 percent to 2,618 yen in Tokyo after posting higher operating profit.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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


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