Asian Markets, Fundamentals

Stocks in Asia/Pacific Tumble amid Concerns that Banks May Have to Raise Further Capital

Asia Session Key Developments

• BOJ Says Consumer Spending is Picking Up On Stimulus
• Japan Supermarket Sales Tumble for an 11^th Straight Month
• Australian Conference Board Leading Index Rises 0.3%
  

Stocks in Asia/Pacific Tumble amid Concerns that Banks May Have to Raise Further Capital

The Asian equities market tumbled on Tuesday led by Japanese and Chinese banks amid concern that they may be forced to raise further capital. In Australia, the conference board leading index which uses previously reported statistics and estimates of economic indicators rose 0.3% to mark its fourth straight monthly gain as building approvals and stocks rise, while Japanese supermarket sales tumbled for an 11^th consecutive month. At the same time, Japanese bonds rose on speculation that the governments about deflation may spur the central bank to raise its debt purchases. In particular,   Japan’s Finance Minister, Hirohisa Fujii urged the central bank to approach the issue on deflation more aggressively as “deflation is a problem which should be addressed from the monetary side,” he added.

Nikkei 225                          9,401.58

The Japanese equity markets pushed lower on Tuesday after being closed yesterday in observance for Labor Thanksgiving Day, leading the Nikkei 225 to shed 96.10 points (1.01%) and close at 9,401.58. Oil & gas plunged 1.87% to lead the decline followed by a 1.71% pull back in financials, while utilities climbed 1.06% to taper the advance. Shares of Mitsubishi UFJ Financial Group, Japan’s biggest lender by market value, and Resona Holdings plummeted 2.8% and 6% respectively after the Nikkei newspaper stating that major banks are preparing another round of share sales. Meanwhile, Mori Seiki tumbled 11% to mark its largest drop since October of 2008 as the company announced that it plans to raise as much as 18.2 billion yen from a sale of new shares to purchase a Sony Corporation business, while Nihon Kohden Corporation slumped 7.3% as the company said it will recall 107,309 devices used in analyzing electro-cardiograms due to a warning it received from the products’ manufacturer in the U.S. that some of the devices may malfunction.

Hang Seng                        22,423.14

Hong Kong shares closed to the downside on Tuesday, marking its largest decline in 3 weeks, leading the benchmark equity index to shed 348.25 points (1.53%) and end the trade at 22,423.14 as 8 of the 9 components traded lower on the day. Shares of Bank of China, the nation’s No. 3 lender pushed 4% lower as the country’s 5 largest banks submitted preliminary plans for raising capital to the industry regulator, while China Agri-Industries climbed 9.7% as Goldman Sachs lifted the company’s stock rating from “neutral” to “buy.”At the same time, China Resources Enterprise and China Petroleum & Chemical slumped 1.38% and .75% correspondingly on the back of lower commodity prices.

S&P/ASX 200 Index           4,685.00

Stocks in Australia pushed lower on Tuesday on the back of lower commodity prices, leading the S&P/ASX 200 to fall 32.00 points (0.68%) and close at 4,685.00, with 9 of the 10 components sliding on the day. Shares of Harvey Norman Holdings, Australia’s largest electronics retailer gained 0.7% after the company stated that first-half profit before tax and minority interest will soar more than 40% after sales increased, while Toll Holdings rose 1.6% subsequent to the company announcing that it ended talks with the Australian Department of Defense and expects to sign an initial 5-year contract followed by a four one-year extension. At the same time, Minor Resources rallied 4.3% on the back of the nickel advancing 1.85 in London yesterday.