Asia Stocks Post Weekly Loss on Concern About Global Recovery

July 11 (Bloomberg) -- Asian stocks fell this week, the third weekly decline in four, as concern the global recovery will falter caused commodity prices to drop and the yen to strengthen.

BHP Billiton Ltd., the world’s biggest mining company, dropped for a fifth week after copper and oil prices slumped. Honda Motor Co., which makes 51 percent of its revenue in North America, tumbled 10 percent on concern a stronger yen will hurt the value of its overseas revenue. STX Pan Ocean Co. Ltd., South Korea’s biggest bulk carrier, sank 11 percent as shipping rates declined.

The MSCI Asia Pacific Index lost 2.1 percent in the past five days, adding to last week’s 0.8 percent decline. That pared the measure’s record 28 percent in the three months ended June 30 on optimism the global economy is stabilizing.

“The market is finally returning its focus to the present, rather than looking for an eventual recovery,” said Masaru Hamasaki, a Tokyo-based strategist at Toyota Asset Management Co., which oversees $14 billion. “The economic rebound won’t be rapid. Share prices are beginning to reflect that.”

The Asian stock benchmark, which plunged by a record last year as the global economy slipped into recession, has now climbed 43 percent since reaching a more than five-year low on March 9. Stocks on the gauge now trade at 22.8 times reported earnings, compared with 15 times at the market trough in March and 14.9 for the U.S.’s Standard & Poor’s 500 Index.

Disappointing Data

Shares of Japanese exporters declined as the yen rose 3.4 percent against the U.S. dollar, the most since the five days through May 15. Honda Motor slumped 10 percent to 2,355 yen. Toyota Motor Corp., which gets about 37 percent of revenue in North America, slipped 5.8 percent to 3,430 yen. Sony Corp., a consumer electronics maker that gets almost half of sales from U.S. and Europe, slid 8.6 percent to 2,230 yen.

Disappointing economic data, including worse-than-expected U.S. unemployment figures on July 2, has fanned investor concern that stock gains had outpaced prospects for an economic recovery.

Japan’s government said on July 8 that machinery orders declined 3 percent in May. Economists had estimated a 2 percent increase. Growth in Japanese bank lending slowed to 2.5 percent last month from a year earlier, compared with 3.3 percent growth in May, the Bank of Japan said on the same day.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, declined 10 percent to 538 yen. Mizuho Financial Group Inc., Japan’s second-largest bank, dropped 11 percent to 202 yen.

Chinese Developers

Shares of Chinese property developers retreated on concern the government will restrict lending for real estate investments. China Overseas Land & Investment Ltd., a developer controlled by the country’s construction ministry, plunged 9.4 percent to HK$16.20 in Hong Kong. Shimao Property Holdings Ltd., run by billionaire Xu Rongmao, sank 10 percent to HK$14.16 in Hong Kong.

Industrial & Commercial Bank of China Ltd., the world’s largest financial company by market capitalization, dropped 5.2 percent to HK$5.06. China Construction Bank Corp., the mainland’s No. 2 lender, slipped 5.9 percent to HK$5.60.

Rapid credit growth poses a risk to the nation’s lenders and a concentration of loans to some industries may damage the financial system, a China Banking Regulatory Commission official said in a speech posted on the agency’s Web site on July 7. New loans in mainland China rose almost fivefold in June from a year earlier to 1.53 trillion yuan ($224 billion), the central bank said July 8.

“There could be some scrutiny on credit policy to prevent an overheating in the real estate market rather than an overall shift in the policy stance,” Fan Cheuk Wan, head of Asia Pacific research at Credit Suisse Private Banking, said.

Copper, Oil

Shares of commodity producers declined as copper and oil prices dropped this week. The worst recession in half a century may be prolonged because consumers see few signs job losses and declines in home prices are ending, economists Nouriel Roubini and Robert Shiller said.

“The fundamental problem, as Franklin Delano Roosevelt said in 1933, is fear,” Shiller, a Yale University professor, said July 9 on Bloomberg Radio’s “Surveillance.” The Great Depression was deepened by a “sense of lost confidence or animal spirits that was a self-fulfilling prophecy. The worry is that we will have the same kind of issue arising again,” he said.

BHP Billiton dropped 2.3 percent to A$32.65, its fifth week of decline. Rio Tinto Ltd., the world’s third-largest mining company, fell 2.5 percent to A$48.36. Jiangxi Copper Co. Ltd., China’s biggest producer of the metal, slipped 5.1 percent to HK$12.22 in Hong Kong. Copper for September delivery sank 3.7 percent, its second weekly fall.

Baltic Dry Falls

PetroChina Co., the nation’s biggest oil producer and the world’s largest company by market capitalization, slipped 6.9 percent to HK$7.94. Inpex Corp., Japan’s largest oil explorer, dropped 6 percent to 691,000 yen. Woodside Petroleum Ltd., Australia’s second-largest oil producer, fell 3.7 percent to A$39.90.

The Baltic Dry Index, which measures the cost of shipping commodities, dropped 15 percent in London this week, the most since the five days ended March 20.

STX Pan Ocean slumped 11 percent to 10,350 won in Seoul. Mitsui O.S.K. Lines Ltd., the world’s largest operator of iron- ore vessels, dropped 8.6 percent to 542 yen in Tokyo. China Cosco Holdings Ltd., the world’s largest operator of dry-bulk ships, declined 6.9 percent to HK$8.52.

The first companies to go public in China since September surged. Guilin Sanjin Pharmaceutical Co., the nation’s largest maker of herbal lozenges, surged 82 percent to 36.10 yuan. Zhejiang Wanma Cable Co., which supplies cable to the nation’s dominant electricity distributor, jumped 125 percent to 25.93 yuan.

Funds Diverted

In Hong Kong, Amber Energy Ltd. soared 63 percent to HK$2.71 on its debut, after investors subscribed for more than 1,200 times the shares offered in an initial sale.

Chigo Holdings Ltd., which makes air conditioners, will start trading on July 13 In Hong Kong. BBMG Corp., the No. 1 building materials supplier in China’s Beijing, Tianjin and Hebei areas, will start taking orders from institutional investors next week for this year’s second-largest initial public offering in Hong Kong.

“The market’s pulling back as money is tied up with new stocks,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

-- With contribution from Patrick Rial and Kotaro Tsunetomi in Tokyo. Editors: Nick Gentle, Mike Millard.