Asian stocks fell for a second week for the first time since June, on concern the U.S. will attack Syria in response to the alleged use of chemical weapons by President Bashar Al-Assad against his own people.
Honda Motor Co. (7267), which gets 83 percent of its revenue abroad, lost 5 percent in Tokyo as the yen strengthened against the dollar on the week. Billabong International Ltd. (BBG) plunged 28 percent after posting a loss more than three times the market value of the Australian surfwear maker and saying its core brand was worthless. Fraser & Neave Ltd. (FNN), controlled by Thailand’s richest man, gained 2.3 percent in Singapore on plans to spin off its property business.
The MSCI Asia Pacific Index slipped 0.9 percent to 130.18, the first back-to-back weekly loss since the first week of June, widening its August retreat to 1.6 percent.
“If you get a strike on Syria that would create a lot of risk for investors,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages more than $130 billion, said by phone yesterday. “We’re getting a correction that the market needs to bring down expectations.”
The MSCI Asia Pacific Index trades at 12.7 times estimated earnings compared with multiples of 14.8 for the Standard & Poor’s 500 Index and 13.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Asia-Pacific gauge rose 0.6 percent this year, lagging a 14.5 percent surge for the S&P 500, as growth slows in China and speculation that the Federal Reserve will curb economic stimulus spurs investors to sell assets across Asia and emerging markets.
Equities across emerging markets in the region led declines this month as policy makers grappled with slowing economies, plunging currencies and an accelerating outflow of investor cash. The Philippine Stock Exchange PSEi Index fell 1.4 percent while Thailand’s SET Index tumbled 3.3 percent. Indonesia’s Jakarta Composite Index (JCI) edged up 0.6 percent.
Australia was the only developed market in the Asia-Pacific region to post an advance in August, rising 0.4 percent. Singapore’s Straits Times Index posted the largest decline, retreating 6 percent. Japan’s Topix index lost 2.3, its fourth monthly decline and longest losing streak since 2008.
Crude oil soared to a two-year high on Aug. 28, two days after U.S. Secretary of State John Kerry said President Barack Obama will hold the Syrian government accountable for the “moral obscenity” of using chemical weapons against civilians. The U.K. parliament has rejected military strikes, leaving Obama to recalculate the cost of acting in Syria now that the hands of the main U.S. ally are tied.
Japanese exporters declined this week as the yen advanced. Honda fell 5 percent to 3,545 yen. Toyota Motor Corp. (7203), Asia’s largest carmaker, slid 4.5 percent to 5,940 yen. Camera maker Canon Inc. retreated 2.4 percent to 2,948 yen.
Billabong tumbled 28 percent to 42.5 Australian cents as the firm said its 40-year-old surf brand was worthless after the company’s losses tripled amid store closures, firings and a breach of debt terms. The Gold Coast, Australia-based maker of swimwear has closed 158 stores and canceled relationships with three-quarters of its suppliers.
Fraser & Neave advanced 2.3 percent to S$5.68. The 130-year-old conglomerate will offer stockholders two shares of property company Frasers Centrepoint Ltd. for every F&N share held. F&N is spinning off a division with S$9 billion ($7 billion) of assets as of June, allowing both companies to focus on their separate expansion strategies.
Ping An Insurance (Group) Co. (2318) advanced 1.2 percent to HK$54.35 after investment income at China’s second-biggest insurer almost doubled.
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