Asian Markets Struggle

123jump.com Staff
07 Aug, 2007
New York City

Asian markets remaied weak on declining trading volume. Most markets in Asia traded lower but Australia and Philippines managed to climb higher. Shanghai continued to climb higher inthe face of global markets volatility emanating from the U.S. mortgage bonds weakness. Hong Kong Land reported first half profit rise of 32% on strong commercial rents in business districts. Macquarie Bank in Sydney managed to rebound. Indonesia left the key bank rate unchaged.

[R]8:30AM New York, 9:30PM Tokyo – Asian markets make a feeble attempt to climb. Japan lost most of the day’s gain at the close.[/R]

Asian markets closed lower but select emerging markets managed to close higher. Philippines led the region with a gain of 2.8% followed by 1.1% rise in Australia and fractional gains in India, Japan, and Korea. Taiwan with a loss of 0.9% led the decliners in the region followed by 0.7% in Indonesia, followed by fractional losses in Thailand, Singapore, and Hong Kong. The Shanghai Composite gained 0.5% bucking the regional trend of lower markets for the last one week.

In Hong Kong trading insurance companies fell. China Life and Ping An lost nearly 0.7% dragged by weakness in financial and banking sector across the region. The regional commercial property developer Hong Kong Land reported first half profit increase of 32% to $155 million. The commercial property vacancy rates fell to 3% in Hong Kong but residential market remained relatively soft. The company is enjoying a rising demand from financial services segment. When counting the property valuations gain the profit in the first half jumped to $1.2 billion from $924 million a year ago. Diluted earnings per share jumped to 50.49 cents from 39.92 cents.

Indonesia Central Bank left the key interest rate unchanged to 8.25% meeting the expectations of the most economists. Food and energy prices have been stubbornly high and continue to rise. In July the prices gained 6.1% after rising 5.8% in June. The bank is targeting inflation between 5% and 7%. Rising prices of palm oil and crude oil have forced the government to reduce exports of palm oil. Indonesian currency rupiah edged a fraction lower at close to 9,316 to a dollar.

In Sydney trading Macquarie Bank recovered with a gain of 6.4% after falling more than 15% in the first week of this month. Novo Energy jumped 8% after a takeover offer from Toro Energy valuing the company at A$276 million. Primary Healthcare and Hills Industry edged up a fraction after reporting earnings. Australian Agriculture fell 7% after reporting first half profit decline of 31%. Casino operator, Publishing & Broadcasting jumped 4% and Austar United fell 2% on broker rating revisions.


[R]7:00AM New York, 8:00PM Tokyo – Market opened higher but steadily lost its gain the afternoon trading.[/R]

Nikkei 225 closed 7.31 or 0.04% higher to close at 16,921.77. The index opened nearly 1% higher but gave up most of its gains on weakness in banking and commodities related stocks. Topix index fell 0.5% or 7.8 to close at 1,660.01

Toyota is planning to increase its global of production of vehicles to 10.5 million vehicles. According to a report in local business newspaper, the Nikkei Weekly, in a recent meeting with parts suppliers the company is targeting higher global sales to meet rising demand. Toyota last week reported 32% rise in quarterly earnings on 16% gain in sales and planned to produce 8.9 million vehicles in the fiscal year ending in March 2008.

According to Bloomberg news Shinsei Bank Ltd reported accumulated losses from subprime lending in the U.S. of $30 million and has exposure of $200 million to mortgage bond market. After the news the stock jumped 8% but closed 3.3% higher at 430 yen.

Trend Micro, Internet security and software provider, jumped 14% or 500 yen to close at 4,100 yen. The company revised its guidance for the second quarter sales to 25 billion from 22.5 billion yen and earnings to 6.2 billion yen from 3.7 billion yen. The sales were revised up 11% and earnings were revised up 67%.

Japan Steel Works soared 5.8% to close at 1,926 after reporting 300% increase in earnings to 7.9 billion yen.

Softbank said that it has added 224,000 mobile users in the month of July.

Nomura Holdings lost its gain of 3% in the morning trading to close up 0.5% to 2,145 yen. The brokerage company in the previous week had reported a sharp rise in earnings on higher trading and brokerage revenue. Mizuho Financial after reversing from an earlier gain of 2.2% to close 2% lower at 687,000 yen. In the last week the company reported lower that expected earnings.

Oil closed sharply lower in the international markets with a loss of 5% dragging energy and trading companies. Inpex, oil explorer, fell 8% to 90,000 yen. Mitsui & Company fell 5.2% and Mitsubishi dropped 4.5%.