Asian Stocks Drop a Second Day as Chinese Developers Fall

By Jonathan Burgos 

Asian stocks fell for a second day as Chinese developers declined and amid concern shares rose too fast in a three-week rally that drove the regional benchmark index to a 19-month high.

State-owned China Resources Land Ltd. sank 3.3 percent in Hong Kong after the southern city of Shenzhen banned homebuilders from raising new home prices. Canon Inc. (7751), the world’s biggest camera maker, slipped 2 percent as the yen strengthened, cutting the outlook for overseas income at Japanese exporters. National Australia Bank Ltd. (NAB) lost 1.7 percent as the country’s largest lender by assets announced plans to cut costs after full-year profit fell for the first time since 2009.

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A pedestrian walks past an electronic stock board outside a securities firm in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

9:12

March 12 (Bloomberg) -- Bill Blain, a strategist at Mint Partners Ltd., talks about the euro-zone economy, Japanese equities and U.S. credit markets. He also speaks about Italian and Spanish bonds with Mark Barton and Caroline Hyde on Bloomberg Television's "Countdown." (Source: Bloomberg)

5:40

March 11 (Bloomberg) -- Michael Kurtz, global head of equity strategy at Nomura Holdings Inc. in Hong Kong, talks about the outlook for Japan's economy, government and central bank policies, and stock market. He also discusses the economies of the U.S. and Europe with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)

5:29

March 13 (Bloomberg) -- Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, talks about global stocks, bonds, and his investment strategy. He also discusses the outlook for the yen and Bank of Japan monetary policy. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

The MSCI Asia Pacific Index (MXAP) dropped 0.3 percent to 135.82 as of 1:22 p.m. in Tokyo, with more than two shares falling for each that rose. The gauge rallied 2.1 percent in the past three weeks amid signs the U.S. and China economies are recovering. The Shanghai Composite Index (SHCOMP) is poised for its biggest monthly decline since July after the Chinese government on March 1 imposed its toughest curbs on property transactions in a year.

“There’s a slight possibility China might overdo tightening measures in the property market,” said Yoji Takeda, who oversees about $1.2 billion as Hong Kong-based head of Asian equities at RBC Investment Management (Asia) Ltd. “An asset bubble is one potential problem for China, but if they really push down property prices, that’s also bad for the economy.”

Stronger Yen

Japan’s Nikkei 225 Index slipped 0.3 percent after gaining as much as 0.2 percent. Exporters declined as the yen rose against most major peers after the opposition said it wouldn’t support a pro-stimulus nominee for central bank deputy governor. A stronger yen reduces the value of Japanese companies’ overseas income when repatriated.

The Japanese benchmark index last week erased losses from the 2008 collapse of Lehman Brothers Holdings Inc. amid speculation the Bank of Japan will step up efforts to stimulate the world’s third-largest economy.

“The market has run very, very hard and it is due for a pullback,” Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $160 billion, told Bloomberg Television. “You wouldn’t expect us to be back to pre-crisis levels any time soon, given that we know we’re going to get sluggish growth going forward.”

China’s Shanghai Composite Index slid 1.2 percent and Hong Kong’s Hang Seng Index dropped 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.5 percent, while New Zealand NZX 50 Index dropped 0.9 percent. Singapore’s Straits Times Index lost 0.6 percent, while South Korea’s Kospi Index slipped 0.1 percent.

U.S. Futures

Shares on the MSCI Asia-Pacific Index traded yesterday at 14.9 times estimated earnings compared with 14 for the Standard & Poor’s 500 Index and 12.7 for the Stoxx Europe 600, according to data compiled by Bloomberg.

Futures on the S&P 500 Index added 0.1 percent today. The equity gauge fell 0.2 percent yesterday, snapping a seven-day rally that drove the benchmark to within nine points of its record high.

Chinese developers fell after news portal Sina.com reported Shenzhen’s land authorities won’t approve the sale of property projects with higher prices. China Resources Land slipped 3.3 percent to HK$20.50 in Hong Kong. China Overseas Land & Investment Ltd. (688), the biggest Chinese developer trader in Hong Kong, dropped 2.7 percent to HK$21.70. Guangzhou R&F Properties Co. decreased 4 percent to HK$11.42.

Keppel Corp. (KEP), the world’s biggest maker of oil platforms, fell 1.8 percent to S$11.65 in Singapore after saying its $1.2 billion contract to build two semi-submersible drilling rigs for Ukraine’s Naftogaz won’t take effect because certain conditions weren’t met.

Canon, Panasonic

Japanese exporters declined. Canon slid 2 percent to 3,480 yen. Panasonic Corp., Japan’s second-largest television maker, decreased 2.6 percent to to 683 yen. Fanuc Corp. (6954), a supplier of factory automation equipment that gets 76 percent of sales from overseas, fell 2.2 percent to 14,050 yen.

National Australia Bank slipped 1.7 percent to A$30.99. The lender said it plans to cut annual costs by A$800 million ($825 million) within five years after full-year profit fell for the first time since 2009.

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

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