Asian Stocks Post 1st Decline in Three Weeks; Commodities Fall

Sept. 26 (Bloomberg) -- Asian stocks declined for the first time in three weeks as commodities prices slumped and companies took advantage of the recent rally to sell new shares.

Aluminum Corp. of China, the nation’s biggest producer of the metal, slumped 8 percent in Hong Kong. BHP Billiton Ltd., the world’s largest miner, fell 3 percent. Nomura Holdings Inc., Japan’s biggest brokerage, slumped 17 percent after announcing a record $5.6 billion share sale. Guoyuan Securities Co. slumped 11 percent after regulators approved its plan to sell additional equity.

“I wouldn’t be surprised if we’d seen the peak of the market for this year because the economic news isn’t going to improve very much,” investor Marc Faber, the publisher of the Gloom, Boom & Doom report said in a Sept. 25 interview with Bloomberg Television. “The correction in the market has been overdue for quite some time.”

The MSCI Asia Pacific Index dropped 0.5 percent this week to 117.77. Asian markets have rallied 67 percent since the MSCI benchmark dropped to a five-year low on March 9.

Japan’s Nikkei 225 Stock Average fell 1 percent, while China’s benchmark Shanghai Composite Index tumbled 4.2 percent for the region’s steepest decline. Vietnam, Thailand and Indonesia were among markets that posted gains this week.

Geely Automobile Holdings Ltd. surged 28 percent after saying it will raise HK$2.59 billion ($334 million) selling convertible bonds and warrants to a fund managed by Goldman Sachs Group Inc. Japan Airlines Corp. plunged 22 percent as it sought aid to avoid a bankruptcy filing.

Asia Outperformance

MSCI’s Asian index has recovered to levels last seen before the collapse of Lehman Brothers Holdings Inc. a year ago the previous week. The ensuing credit crisis sparked more than $1.6 trillion in losses and writedowns at financial institutions and helped send economies globally into recession.

The 31 percent advance this year by the Asian gauge tops a 16 percent rise by the Standard & Poor’s 500 Index and 20 percent climb by Europe’s Stoxx 600 Index.

The MSCI Asia Pacific Index’s six-month rally has been driven by better-than-estimated economic reports and corporate earnings. Of 646 companies on the gauge that reported net income for the latest quarter, 256 beat analyst predictions, compared with 168 that missed.

Aluminum Corp. retreated 8 percent to HK$8.63 in Hong Kong. BHP lost 3 percent to A$37.55. PetroChina Co., the country’s biggest oil company, declined 3.1 percent to HK$9.02.

A measure of six metals traded in London slid 3.1 percent this week, the biggest drop since July. Crude oil slumped 8.4 percent.

Share Sales

Nomura plunged 17 percent to 573 yen. The company will sell about 800 million shares, equivalent to almost 30 percent of the stock outstanding, to fund expansion outside Japan.

Guoyuan Securities declined 11 percent to 18.51 yuan. China’s regulator granted approval for the company’s plan to sell as many as 500 million new shares, raising as much as 10 billion yuan ($1.46 billion.)

Chinese companies raised at least 96.1 billion yuan in local initial public offerings since a nine-month moratorium on sales ended in June. In a sign that rising supply may be overwhelming investor demand, Metallurgical Corporation of China Ltd. rose 28 percent in its first day of trading in Shanghai on Sept. 21, less than half this year’s average debut gain of 68 percent.

Investor Caution

Metallurgical’s Hong Kong listing on Sept. 24, in which its shares fell 12 percent, was the weakest first-day performance for a newly listed company in the city this year. Of the three companies that listed in Hong Kong this week, only one, Sinopharm Group Co., gained.

“Investors will become more cautious about buying into IPOs following the debuts this week,” said Louis Wong, a fund manager at Phillip Securities HK Ltd. in Hong Kong.

Geely rallied 28 percent to HK$2.29. The company plans to raise HK$2.59 billion selling convertible bonds and warrants to a fund managed by Goldman Sachs Group Inc.

Japan Airlines retreated 22 percent to 133 yen. The nation’s largest carrier will be reorganized under a government plan designed to avert a bankruptcy. JAL posted a 99 billion yen loss in the first quarter, the most in at least six years, as business and leisure travel plummeted during the country’s worst postwar recession.