Shares decline in markets across Asia

Asian stocks fell for the first time in three days, led by developers, on concern US credit-market losses will spread and damp demand for real estate.

Mitsubishi Estate Co dropped to a 17-month low after Credit Suisse Group said US mortgage defaults may prompt overseas investors to sell property holdings in Japan. Esprit Holdings Ltd paced retailers lower on signs consumer spending is slowing in Europe.

"Global investors are reducing their real-estate investments across the board," said Hitoshi Yamamoto, who manages the equivalent of $5.5 billion in Japanese equities as chief executive officer of Fortis Asset Management in Tokyo.

The MSCI Asia Pacific Index fell 1.2 percent to 153.13 as of 3:43 pm in Tokyo, snapping a two-day, 1.3 percent advance. A measure of financial stocks including property developers was the biggest drag on the benchmark.

Japan's Nikkei 225 Stock Average lost 1.5 percent to 14,388.11, the lowest close since June 2006, after Goldman Sachs Group Inc cut its economic growth estimate for the country and said there's a 50 percent chance of a recession in the world's second-largest economy.

Gilead Sciences Inc and Pfizer Inc. climbed in the United States, helping the Standard & Poor's 500 Index to its biggest advance in more than two weeks.

Property shares fall

Mitsubishi Estate, Japan's biggest property developer by market value, fell 5.7 percent to 2,330 yen, its lowest close since August 7, 2006. Sumitomo Realty & Development Co, Japan's third-largest developer, slumped 5.4 percent to 2,480 yen, a level not seen since February 20, 2006.

"Foreign investors who actively invested in Japanese real estate could decide to sell their Japanese real estate holdings," Yoji Otani, an analyst at Credit Suisse, wrote in a note to clients. "In 2008, we are likely to see a situation in which only real estate firms with a genuine understanding of real estate survive."

Japanese developers also slid after the Nikkei newspaper said banks are curbing their lending to property funds in the wake of subprime defaults, cooling the market for acquisitions.

Centro Properties Group, the Australian owner of US malls, plunged after the Australian newspaper said the country's securities regulator questioned the company about accounting for its debt.

The stock dropped 23 percent to 86 Australian cents, the second-biggest decliner on the MSCI World Index by percentage. Centro Retail group had the steepest drop.

Korea Zinc Co, the world's second-biggest zinc refiner, dropped 7.9 percent to 137,500 won, snapping a five-day, 20 percent surge, after the company forecast profit for this year that is 30 percent below analyst estimates for 2007.

Index rises

The MSCI Asia-Pacific Health Care Index rose 0.07 percent, adding to its 2.2 percent surge on Wednesday and the only one of 10 industry groups in the MSCI Asia Pacific index to climb. CSL, an Australian drugmaker, advanced 2.4 percent to A$35.85, while Takeda Pharmaceutical Co, Japan's largest, rose 1 percent to 6,550 yen.

Goldman recommended buying shares of Gilead, the largest US maker of HIV drugs, and Pfizer, the biggest US drugmaker by sales.

Healthcare companies, along with utilities and makers of consumer staples, have been the best performers in the US so far this year.

"The market's moving back into healthcare and biotech," said Michael Birch, who helps manage the equivalent of $140 million at Wallace Funds Management in Sydney. "They're seen as safer."

Dainippon Sumitomo Pharma Co jumped 3.7 percent to 840 yen, the biggest gain in four months. KBC Securities raised its rating for the Japanese drugmaker to "buy" from "hold". Takara Bio Inc added 5.7 percent to 279,000 yen after saying it will start gene therapy research with the US National Cancer Institute.

Meanwhile, shares of Casio Computer Co surged 3.9 percent to 1,233 yen after Mizuho Securities Co raised its rating on the stock to "buy" from "neutral", saying earnings will recover next fiscal year.

Agencies

(China Daily 01/11/2008 page17)