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Asia Stocks Post Biggest Weekly Drop Since November; Japan Soars

Asian stocks fell the most since November this week as Apple Inc. suppliers declined after the iPhone maker reported its weakest sales since 2009 and some investors speculated shares may have risen too far, too fast.

AAC Technologies Holdings Inc. (2018), which makes speakers for Apple, dropped 3.9 percent in Hong Kong. Samsung Electronics Co. fell to the lowest in almost two months in Seoul as the world’s largest maker of mobile phones said the strengthening won may cut operating profit by at least 3 trillion won ($2.8 billion) this year. Sony Corp. (6758) soared in Tokyo trading as the Topix Index posted its longest streak of weekly gains since January 1973, boosted as the yen weakened against the dollar.

The MSCI Asia Pacific Index fell 0.7 percent to 131.74. Gains in Japanese shares limited declines on the broader pan- Asian benchmark as speculation the new government will take steps to end deflation pushed the Topix higher for an 11th week. The MSCI Asia Pacific excluding Japan Index dropped 0.8 percent.

“Markets are at highs and some investors are becoming cautious after everyone turned bullish on stocks,” said Koji Toda, chief fund manager at Tokyo-based Resona Bank Ltd., which oversees about $174 billion. “Most investors are still optimistic on the equity market. Just because markets are falling today doesn’t mean they will continue to drop.”

The MSCI Asia Pacific index (MXAP), the benchmark regional equities gauge, surged to the highest level in 17 months on Jan. 22. That left the measure trading at 14.3 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

International investors are the most bullish on stocks in at least 3 1/2 years, with close to two-thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey published Jan. 22. As the global financial and business elite gathered in Davos for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also said equities will offer the highest return in the next year.

Australia’s S&P/ASX 200 Index (AS51) rose 1.3 percent this week, to the highest level since April 2011. The gauge advanced for the past eighth days, its longest streak of advances in almost three years. Consumer prices last quarter rose less-than- estimated a report showed Jan. 23, pushing down the local dollar and giving the central bank scope to reduce interest rates further.

Hong Kong’s Hang Seng Index fell 0.1 percent and China’s Shanghai Composite Index slid 1.1 percent. Singapore’s Straits Times Index gained 1.8 percent and Taiwan’s Taiex Index slid 0.8 percent.

Japan’s Topix gained 0.6 percent, marking its longest weekly winning streak since 1973. The Bank of Japan this week said it would shift to Federal Reserve-style open-ended asset purchases and the yen weakened as falling consumer prices added to the case for further easing. Exporters climbed. Sony climbed 12 percent to 1,290 yen and Panasonic Corp., the producer of Viera televisions, increased 1.7 percent to 604 yen.

AAC Technologies declined 3.9 percent to HK$28.35. Hon Hai Precision Industry Co., which assembles iPhones, slid 2.3 percent to NT$83.40. Apple reported its slowest profit growth since 2003. Initial iPhone 5 sales were lower than some investors expected due to supply shortages, while consumers criticized new mapping software.

Samsung fell 4.3 percent to 1.417 million won, dragging the Kospi index down 2.1 percent for the week. The phone maker’s comments on its 2013 forecast overshadowed a better-than- expected 76 percent jump in fourth-quarter profit to 7.04 trillion won. Samsung accounts for 19 percent of the Kospi and is the heaviest-weighted company in the MSCI Asia Pacific Index.

Thai Beverage Pcl rose 2.3 percent to 44.5 Singapore cents. Overseas Union Enterprise Ltd. said Jan. 21 that it won’t match Thai billionaire Charoen’s S$13.8 billion ($11.2 billion) offer for Fraser & Neave Ltd., ending the bidding war for the Singapore-based company. Overseas Union added 4.8 percent to S$2.85 and Fraser & Neave slipped 0.3 percent to S$9.55.

China Vanke Co., the country’s biggest publicly traded property developer, surged 29 percent to HK$16.16 in the southern Chinese city of Shenzhen, on plans to move trading of its foreign-currency denominated B shares to Hong Kong. The company’s shares resumed trading on Jan. 21 after being suspended since Dec. 25 pending the transfer decision.

Karoon Gas Australia Ltd. gained 16 percent to A$6.15 after the explorer said it discovered oil in Brazil. The discovery provides “confidence in the other prospects within Karoon’s blocks,” the Mt. Martha, Victoria-based company said.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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