Asian Exporter Stocks Fall on U.S. Spending Concern

Asian exporter stocks fell on concern a slump in U.S. housing will curb spending in the world's biggest economy.

Sony Corp., which made 70 percent of its sales overseas last year, and Hon Hai Precision Industry Co., whose customers include Apple Inc., led declines after sales of previously owned homes fell to the lowest in almost four years.

``We had news the past few days suggesting the U.S. housing sector is coming back to haunt all markets,'' said Jason Teh, who helps manage about $4.3 billion at Investors Mutual Ltd. in Sydney. ``We stay away from all investments that are directly linked to that industry.''

China's CSI 300 Index gained, reversing earlier losses, as investors judged as excessive a tumble of as much as 12 percent from its closing high a week ago.

The dollar-denominated Morgan Stanley Capital International Asia-Pacific Index added 0.1 percent to 152.98 at 7:40 p.m. in Tokyo. More than three stocks declined for every two that rose.

SK Corp., South Korea's biggest oil refiner, surged after Samsung Securities Co. raised its stock-price estimate by 29 percent. Sun Hung Kai Properties Ltd. jumped after Goldman, Sachs & Co. increased its rating on the Hong Kong developer's shares to ``buy.''

Japan's Nikkei 225 Stock Average lost 0.1 percent to 18,066.11. Benchmarks fell also fell in Australia, New Zealand, Hong Kong, South Korea, Taiwan, Malaysia and Singapore, whose Straits Times Index slid 1.5 percent, the most in the region.

`Very Worrying Situation'

U.S. stocks slid yesterday after a report showed purchases of previously owned homes declined 0.3 percent in May, while the supply of unsold houses jumped to a record, the National Association of Realtors said. Shares also dropped on speculation Bear Stearns Cos. may have to salvage a second hedge fund that incurred losses linked to subprime, or high risk, mortgages.

Sony, the world's biggest maker of game consoles, lost 0.9 percent to 6,400 yen. Taiwan's Hon Hai, the largest contract- manufacturer of electronics for customers including Apple Inc., dropped 1.9 percent to NT$282.50. James Hardie Industries NV, the No. 1 supplier of home siding in the U.S., slid 1 percent to A$8.87 in Australia.

Subprime defaults may eventually affect U.S. consumption, and ``the market is only just now factoring in that possibility,'' said Allan Conway, who oversees about $10 billion as head of emerging-market equities at Schroder Investment Management Ltd. in London. ``The complacency is starting to disappear and it's a very worrying situation,'' he said at a seminar in Seoul.

China Reverses Loses

Citic Securities Co., the country's most profitable brokerage, rose 1.5 percent to 56.10 yuan. The stock, which fell as much as 3.8 percent earlier today, slumped 13 percent in the past five days. Founder Technology Group Corp., the second- largest computer maker, jumped the 10 percent daily limit to 12.86 yuan, snapping a four-day, 23 percent decline.

China's CSI 300 gained 1.3 percent, snapping a two-day 7.6 percent slide. The measure was lower for most of the day as investor demand for stocks slowed.

Investors opened a daily average of 271,000 brokerage accounts for investments in mainland shares and mutual funds this month, down from an average 440,000 in May, according to the China Securities Depository & Clearing Corp.

``The sharp decline provides a good buying opportunity for investors chasing short-term profits,'' said Wei Wei, an analyst at West China Securities Co. in Shanghai.

SK, Sun Hung Kai

SK Corp. surged 8.7 percent to 125,000 won. Samsung Securities Co. raised its six-month stock-price estimate to 152,000 won from 118,000 won.

The company's full-year operating profit, or sales minus the cost of goods sold and administrative expenses, may be 1.64 trillion won, 13 percent higher than Samsung Securities' previous estimate. Investors should buy the stock before trading is halted for one month starting June 28 prior to the company's split into holding and operating companies, wrote Thomas Yi, an analyst.

Sun Hung Kai, Hong Kong's second-biggest developer by market value, advanced 2.5 percent to HK$93.70, the most since Jan. 15.

Goldman Sachs raised its recommendation on the shares to ``buy'' from ``neutral.'' The company may acquire more land in China, analysts at the brokerage, including Anthony Wu, wrote in a research note today.

Cosco, Posco

China Cosco Holdings Co. plunged in Hong Kong as some investors judged the stock's recent gains excessive, while its Shanghai-listed shares doubled on their debut.

China Cosco, Asia's largest container line, slid 2.3 percent to HK$11.74. The stock's 14-day relative strength index was at 74 yesterday, above the 70 mark that some analysts take as a sign the shares may fall. China Cosco surged 19 percent in the five days to June 22.

The company sold 15.1 billion yuan ($1.98 billion) of shares to buy new ships and a stake in a logistics company. The stock surged 93 percent to 16.38 yuan in Shanghai.

Posco, the world's fourth-biggest steelmaker, lost 1.1 percent to 443,000 won in South Korea. CJ Investment & Securities Co. said the ``weakness'' in global steel prices may continue for longer than expected.

Steel consumption in China has slowed by ``a large degree'' and the Beijing Olympics-related boost in demand may peter out this year, wrote Chung Ji Yun, an analyst at CJ Investment, in a report.

China Cosco Holdings Co. (1919 HK)
Citic Securities Co. (600030 CH)
Founder Technology Group Corp. (600601 CH)
Hon Hai Precision Industry Co. (2317 TT)
James Hardie Industries NV (JHX AU)
Posco (005490 KS)
SK Corp. (003600 KS)
Sony Corp. (6758 JT)
Sun Hung Kai Properties Ltd. (16 HK)

source:bloomberg.com