Asian Stocks Slump the Most in Six Weeks on Recovery Concerns

Oct. 3 (Bloomberg) -- Asian stocks fell by the most in six weeks on concern a seven-month rally has outpaced the prospects for an economic recovery.

Mitsubishi UFJ Financial Group Inc., Japan’s largest listed bank, fell 9.7 percent after booking charges for an affiliate. Toyota Motor Corp., which gets 31 percent of sales from North America, sank 8.9 percent as it reported a decline in U.S. sales, and U.S. manufacturing and unemployment claims missed economists’ estimates. Glorious Property Holdings Ltd., a real- estate developer, sank 15 percent in its trading debut yesterday in Hong Kong, the fifth new listing in two weeks to plunge.

The MSCI Asia Pacific Index fell 2.8 percent to 114.46 this week, its biggest drop since the week ended Aug. 21. The gauge has climbed 62 percent from a five-year low on March 9 as stimulus measures worldwide dragged economies out of recession. It has dropped 3.7 percent from a one-year high on Sept. 17.

“There seems to be growing consensus that the pace of the recovery will slow,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $56 billion. “There is a question mark over a further rebound in consumption and production.”

Japan’s Nikkei 225 Stock Average slumped 5.2 percent to 9.731.87, its first weekly close below 10,000 since July 24. Japanese large enterprises plan to cut capital spending by 10.8 percent in the year ending next March, more than the 9.4 percent reduction foreseen three months ago, according to the Bank of Japan’s quarterly Tankan survey released on Oct 1. Economists estimated a 9 percent decrease.

China’s benchmark Shanghai Composite Index dropped 2.1 percent in a shortened trading week. The market was shut from Oct. 1 for the National Day holidays. Trading resumes Oct. 9.

IPO ‘Massacre’

Glorious Property dropped 15 percent to HK$3.76 yesterday, its first day of trading. The company had raised HK$9.9 billion ($1.28 billion) in the largest initial public offering in Hong Kong by a Chinese property company in two years.

The developer joins four other companies, including China South City Holdings Ltd., in falling on their first day of trading over the past two weeks. The declines have heightened investors’ concerns that the market’s appetite for offerings is waning. China South, which debuted on Sept. 30, dropped 25 percent since its IPO.

“It’s a massacre,” said Francis Lun, general manager at Hong Kong-based brokerage Fulbright Securities Ltd. “Right now investors have lost all confidence in new shares and I can’t see this changing in the near term.”

Hong Kong Exchanges & Clearing Ltd., the operator of Asia’s third-biggest stock market, declined 6.3 percent to HK$134.10 on speculation companies may be postponing listing plans due to the poor reception recent offerings have received.

Mitsubishi, Yen, Won

Wilmar International Ltd., the world’s biggest palm-oil trader, sank 9.5 percent to S$6.11 in Singapore after FinanceAsia reported on its Web site that Wilmar China Ltd.’s initial public offering in Hong Kong has been delayed.

Mitsubishi UFJ declined 9.7 percent to 445 yen. The company will book a 28 billion yen ($313 million) charge on its stake in Acom Co., whose shares plunged 50 percent in the six months through Sept. 30.

The stronger yen and won dragged down shares of Japanese and South Korean exporters. The yen strengthened to as much as 88.24 per dollar this week from 90.65 at the close of Tokyo trading last week. The won added as much as 1.8 percent. That reduces the value of overseas sales when converted into the companies’ domestic currencies.

U.S. Economy

Toyota, Japan’s biggest automaker, sank 8.9 percent to 3,380 yen. Canon Inc., the world’s biggest maker of office equipment, fell 6.5 percent to 3,430 yen. All but two of the 33 industry groups in Japan’s Topix index declined this week. Hyundai Motor Co., South Korea’s largest carmaker, tumbled 11 percent to 102,500 won.

Stocks also declined after U.S. data released on Oct. 1 showed manufacturing and claims for unemployment benefits missed economists’ estimates. Last week, reports showed orders for goods made to last several years unexpected dropped in August, while sales of new homes last month rose less than estimated.

Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping company, fell 6.2 percent to 517 yen after widening its loss forecast.

StarHub Ltd., Singapore’s biggest pay-television operator, slipped 7.4 percent to S$2. DBS Group Holdings Ltd. and Citigroup Inc. cut their investment ratings for the stock after the company lost its rights to broadcast sports channels.