Headline shares of the Asia Pacific market closed mostly lower on
Monday, 19 May 2014, as on-going jitters about a slowdown in the world's
second-largest economy offset Friday's positive lead from Wall Street.
Chinese economic growth slowdown concerns rekindled after official data released over the weekend indicated property prices in China rose in April in the fewest cities in 18 months, and average new home prices continued to slow.
The National Bureau of Statistics stated that average new home prices in 70 major cities rose 6.7% in April from a year earlier, easing from the previous month's 7.7% rise. In month-on-month terms, prices rose 0.1% in April, slowing from March's rise of 0.2%.
Additionally, Beijing announced new regulations for interbank lending late on Friday in an attempt to crack down on shadow banking. The People's Bank of China, along with the country's bank, insurance, securities and foreign exchange regulators, issued a set of regulations Friday governing how institutions are to lend and borrow in the interbank market. Friday's regulations included long-standing curbs on how funds raised are used and called on financial institutions to ensure that the duration of borrowing and lending is more properly matched. It reminded institutions that they aren't allowed to provide credit guarantees for third parties in interbank borrowing and lending.
Among Asian bourses, Japanese market declined for fourth consecutive session on Monday, 19 May 2014, with Japanese export related companies' and financials led losses due to the yen's gains against the dollar. The benchmark Nikkei 225 index dropped 0.64% to finish at 14006.44, while the Topix index of all first-section shares was down 0.78% to 1150.07. The index has slipped almost 3.0% over the four sessions and is now down 14% for the year.
The Tokyo market opened higher on tracking Friday's positive lead from Wall Street and upbeat Japanese machinery orders. Just before the market opened, Japanese government data showed machinery orders, a leading indicator of corporate capital spending, jumped 19.1% on-month in March. The reading far exceeded a median market prediction of 6.2% growth.
But selling pressure grew in the afternoon, which swept away early gains and sent the Nikkei temporarily below the 14,000 mark, as the market's prospects remain uncertain, some players trimmed their long positions by cashing in on earlier gains.
The yen's strength against the dollar played a major factor behind today's decline, as it makes exporters less competitive abroad and erodes repatriated profits. Meanwhile the deflationary effect of a stronger yen on banks, insurers, brokerages, and real estate developers hurts the values of their asset portfolios. In currency markets, the dollar bought 101.29 yen, weakening from 101.54 yen in New York Friday.
Among major market movers, Sumitomo Mitsui Financial Group lost 0.9%, non-bank lender Credit Saison shed 4.9%, insurer Tokio Marine Holdings dropped 0.9%, and real estate developer Mitsui Fudosan slipped 1.8%. Auto parts maker Denso and car maker Fuji Heavy Industries led exporters down, falling 2.5% and 3.0%, respectively.
Tokyo Electron jumped 5.3% to 6,187 yen. Applied Materials Inc., which will acquire the Japanese industrial-electronics maker in a stock swap, forecast fiscal third-quarter sales that topped the low end of analysts' estimates.
Grocery store chain Maruetsu closed up 9.5% after the Nikkei said that the company will be one of three stores to be merged with retail giant Aeon under a joint venture with Marubeni.
In Australia, Australian share market finished steep lower today, dragged down by big selloff across the sectors, with mining, energy and banking stocks leading declines. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 1.3% to 5409 and 5390.30, respectively.
The Sydney market opened lower today, on growing concern over China's property market and fears of a further drop in the iron ore price. The bulk metal's spot price came within a whisker of $US100 per tonne on Friday night, closing at $100.70 following a dive in Chinese steel rebar futures to a new record low. Leads from Dalian iron ore futures indicated to further falls, which could see the price for the bulk commodity fall below $US100 per tonne for the first time since September 2012.
Materials & resources stocks fell down on fears that the spot iron ore price to drop below $100 a tonne overnight as futures fell, pressured by rising supply and a weaker Chinese steel market. The spot price for the bulk commodity dropped 2% to $US100.70 a tonne on Friday, the lowest since September 11, 2012. It's down 25% since the beginning of the year. Among miners, Fortescue Metals was hit hardest, losing 4.6% to finish at a 2014 low of A$4.37. Rio Tinto plunged 3% to A$60.10, while rival BHP Billiton slumped 1.7% to A$37.43, Junior iron ore miners were not spared any pain, as BC Iron dropped 4.5% to A$3.63, while Atlas Iron finished 1.3% lower at A$0.74.
Bradken (BKN) shares fell 7.7% to A$3.62. The troubled heavy engineering company is hoping to reduce its operating costs by A$27 million a year by reorganising its manufacturing operations and shedding 10% of its workforce. BKN reported an 18% fall in 1H profit in February to A$38.1 million.
UGL slumped 9.7% to A$6.86. The Australian Financial Review reported the construction company has received just one fully financed offer its DTZ property unit.
Gaming company Tabcorp (TAH) closed down 2.6% to A$3.41. The company fears potential changes to race fields fees by Racing Victoria could eat into its profits.
Agribusiness Elders (ELD) rose 8.7% to A$0.125 after narrowing its 1H loss to A$10.2 million. No interim dividend will be paid to shareholders.
Paint maker DuluxGroup (DLX) rose 0.5% to A$5.76 after increasing its 1H profit by 33.6% to A$56 million. Shareholders will receive an interim dividend of 10 cents per share.
Australian Bureau of Statistics has released merchandise import data for April on Monday, showing April 2014 imports on an international merchandise trade basis were A$20,226m, a rise of A$506m (3%) on the revised March 2014 merchandise imports of A$19,720m.
In China, Mainland China share market closed the session at its lowest level in two months today, as concerns about a slowdown in the world's second-largest economy after data released over the weekend showed further signs of distress in China's property market. The benchmark Shanghai Composite finished 21.32 points lower at 2005.18, after briefly dropping below 2000 mark.
Financials fell on Beijing's new interbank lending rules, which includes capping the size and maturity of loans. China Minsheng Bank Corp declined 3.4% to 7.42 yuan, Industrial Bank Co 2.8% to 9.69 yuan and China Merchants Bank 1.7% to 9.86 yuan.
Property developers were hit following April's home price data. China Merchants Property Development Co declined 1.6% to 16.39 yuan and Poly Real Estate Group Co eased 0.9% to 7.42 yuan.
In Hong Kong, shares in the city's market finished marginally lower after clawing back most of intraday losses due to bargain buying following early selloff triggered by concerns about a slowdown in the world's second-largest economy. The benchmark Hang Seng Index declined 8.41 points to 22704.50 on turnover of HK$47.15 billion. The benchmark index fell nearly 157 points at one point but recovered most of its losses by market close.
Chinese lenders were lower as the PBoC, CBRC, CSRC, CIRC and SAFE, jointly released new guidelines on regulating interbank business on Friday. CCB (00939) and ABC (01288) fell 0.2% and 0.9%. CM Bank (03968), Minsheng Bank (01988), CEB Bank (06818) and BCQ (01963) all dipped in a range between 0.7% and 1.6%.
Lottery counter bucked the market trend on talks that the authorities may issue internet lottery licenses before the World Cup races. China Lotsyn (01371) soared 13.33% to HK$0.68. Rexlot (00555) jumped 8.64% to HK$0.88. China Netcom Technology (08071) shot up 7.25% to HK$0.37. However, HSBC (00005) was up 0.8% to HK$82, rising for six consecutive days, lending support to the market.
Property developers declined after data showed a spreading slowdown in China's housing market. China Resources Land dropped 1.2% to HK$15.12. China Overseas Land & Investment Ltd. lost 1.4% to HK$18.98.
Hong Kong's composite interest rate, measure the average cost of funds of banks, increased by 2 basis points from March to 0.43% at the end of April 2014. The rise in the composite interest rate in April reflected increases in the weighted funding cost for both deposits and interbank funds.
Census and Economic Department of the Hong Kong said on Monday that Hong Kong's seasonally adjusted unemployment rate stood at 3.1% in February - April, same as that in January - March. The underemployment rate increased from 1.2% in January - March to 1.4% in February – April.
In India, key benchmark indices edged higher in choppy trade, with the market sentiment boosted by Narendra Modi's comments in his victory speeches in his home state of Gujarat on Friday, 16 May 2014, where he stressed on the country's development and good governance. The market sentiment was also boosted by a statement from global credit rating agency Moody's Investor Service that BJP's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges. The market sentiment was also boosted by data showing that foreign funds made massive purchases of Indian stocks on Friday.
As per provisional closing, the S&P BSE Sensex was up 195.35 points or 0.81% to 24,317.09. The CNX Nifty was up 50.05 points or 0.69% to 7,253.05.
India index heavyweight Reliance Industries (RIL) rose 3.13% to Rs 1,114.35. RIL after market hours on Friday, 16 May 2014, said that its board has recommended the appointment of Nita M. Ambani, the Chairperson of Reliance Foundation, as a director on the board of RIL. She is being nominated to the board in place of Ramnik H. Ambani, who is retiring at the age of 90 years.
ONGC surged 8.07% to Rs 416 after scaling a record high of Rs 419.70 in intraday trade. ONGC on Sunday, 18 May 2014, said that the company has scaled its highest-ever market capitalization of Rs 3.56 lakh crore in intra-day trade on 16 May 2014, indicating its hidden potential to its investors. In intra-day trade on 16 May 2014, ONGC scrip logged a new peak of Rs 416.35 (on National Stock Exchange), taking its market capitalization to highest ever value. ONGC said its market capitalisation is 51% higher than the next highest valuable company among the listed CPSEs. ONGC said that the company remains committed to create more value for all its stakeholders.
Crompton Greaves advanced 13.79%. With reference to the news item appearing in leading news channel titled "Crompton Greaves $15 - million deal with Spanish Company", Crompton Greaves during market hours clarified that the company follows a policy of disclosing material price sensitive events. In this context, the order mentioned in the abovementioned email is less than 1% of Crompton Greaves' consolidated turnover for the year ended 31 March 2013, and hence, is not considered for disclosure under Clause 36 of the Listing Agreement., Crompton Greaves said in a statement.
DLF surged 7.57%. DLF during market hours said that the Hon'ble COMPAT has pronounced the order today, 19 May 2014, upholding certain findings of the earlier orders of CCI. The company is yet to examine the detailed order and therefore the company at this stage will not be in a position to make any further comments. The company shall be challenging this order passed by the Hon'ble COMPAT in the Hon'ble Supreme Court for which COMPAT has given us 60 days time, DLF said. The realty major said that the company wishes to point out that it has successfully delivered Park Place, Belaire and Magnolia projects which were the subject matter of the above appeals. The company has respected in true letter and spirit the customer commitments made by it, DLF said. In testament thereof, out of over 2,600 apartments, over 2,200 have been handed over and more than 1,800 families are already residing therein, DLF said.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index rose 0.13%. South Korea's KOSPI index was up 0.08%. New Zealand's NZX50 fell 0.35%. Singapore's Straits Times index fell 0.16 point. Indonesia's Jakarta Composite Index fell 0.33%. Malaysia's KLSE Composite added 0.2%.
Chinese economic growth slowdown concerns rekindled after official data released over the weekend indicated property prices in China rose in April in the fewest cities in 18 months, and average new home prices continued to slow.
The National Bureau of Statistics stated that average new home prices in 70 major cities rose 6.7% in April from a year earlier, easing from the previous month's 7.7% rise. In month-on-month terms, prices rose 0.1% in April, slowing from March's rise of 0.2%.
Additionally, Beijing announced new regulations for interbank lending late on Friday in an attempt to crack down on shadow banking. The People's Bank of China, along with the country's bank, insurance, securities and foreign exchange regulators, issued a set of regulations Friday governing how institutions are to lend and borrow in the interbank market. Friday's regulations included long-standing curbs on how funds raised are used and called on financial institutions to ensure that the duration of borrowing and lending is more properly matched. It reminded institutions that they aren't allowed to provide credit guarantees for third parties in interbank borrowing and lending.
Among Asian bourses, Japanese market declined for fourth consecutive session on Monday, 19 May 2014, with Japanese export related companies' and financials led losses due to the yen's gains against the dollar. The benchmark Nikkei 225 index dropped 0.64% to finish at 14006.44, while the Topix index of all first-section shares was down 0.78% to 1150.07. The index has slipped almost 3.0% over the four sessions and is now down 14% for the year.
The Tokyo market opened higher on tracking Friday's positive lead from Wall Street and upbeat Japanese machinery orders. Just before the market opened, Japanese government data showed machinery orders, a leading indicator of corporate capital spending, jumped 19.1% on-month in March. The reading far exceeded a median market prediction of 6.2% growth.
But selling pressure grew in the afternoon, which swept away early gains and sent the Nikkei temporarily below the 14,000 mark, as the market's prospects remain uncertain, some players trimmed their long positions by cashing in on earlier gains.
The yen's strength against the dollar played a major factor behind today's decline, as it makes exporters less competitive abroad and erodes repatriated profits. Meanwhile the deflationary effect of a stronger yen on banks, insurers, brokerages, and real estate developers hurts the values of their asset portfolios. In currency markets, the dollar bought 101.29 yen, weakening from 101.54 yen in New York Friday.
Among major market movers, Sumitomo Mitsui Financial Group lost 0.9%, non-bank lender Credit Saison shed 4.9%, insurer Tokio Marine Holdings dropped 0.9%, and real estate developer Mitsui Fudosan slipped 1.8%. Auto parts maker Denso and car maker Fuji Heavy Industries led exporters down, falling 2.5% and 3.0%, respectively.
Tokyo Electron jumped 5.3% to 6,187 yen. Applied Materials Inc., which will acquire the Japanese industrial-electronics maker in a stock swap, forecast fiscal third-quarter sales that topped the low end of analysts' estimates.
Grocery store chain Maruetsu closed up 9.5% after the Nikkei said that the company will be one of three stores to be merged with retail giant Aeon under a joint venture with Marubeni.
In Australia, Australian share market finished steep lower today, dragged down by big selloff across the sectors, with mining, energy and banking stocks leading declines. The benchmark S&P/ASX200 and the broader All Ordinaries each declined by 1.3% to 5409 and 5390.30, respectively.
The Sydney market opened lower today, on growing concern over China's property market and fears of a further drop in the iron ore price. The bulk metal's spot price came within a whisker of $US100 per tonne on Friday night, closing at $100.70 following a dive in Chinese steel rebar futures to a new record low. Leads from Dalian iron ore futures indicated to further falls, which could see the price for the bulk commodity fall below $US100 per tonne for the first time since September 2012.
Materials & resources stocks fell down on fears that the spot iron ore price to drop below $100 a tonne overnight as futures fell, pressured by rising supply and a weaker Chinese steel market. The spot price for the bulk commodity dropped 2% to $US100.70 a tonne on Friday, the lowest since September 11, 2012. It's down 25% since the beginning of the year. Among miners, Fortescue Metals was hit hardest, losing 4.6% to finish at a 2014 low of A$4.37. Rio Tinto plunged 3% to A$60.10, while rival BHP Billiton slumped 1.7% to A$37.43, Junior iron ore miners were not spared any pain, as BC Iron dropped 4.5% to A$3.63, while Atlas Iron finished 1.3% lower at A$0.74.
Bradken (BKN) shares fell 7.7% to A$3.62. The troubled heavy engineering company is hoping to reduce its operating costs by A$27 million a year by reorganising its manufacturing operations and shedding 10% of its workforce. BKN reported an 18% fall in 1H profit in February to A$38.1 million.
UGL slumped 9.7% to A$6.86. The Australian Financial Review reported the construction company has received just one fully financed offer its DTZ property unit.
Gaming company Tabcorp (TAH) closed down 2.6% to A$3.41. The company fears potential changes to race fields fees by Racing Victoria could eat into its profits.
Agribusiness Elders (ELD) rose 8.7% to A$0.125 after narrowing its 1H loss to A$10.2 million. No interim dividend will be paid to shareholders.
Paint maker DuluxGroup (DLX) rose 0.5% to A$5.76 after increasing its 1H profit by 33.6% to A$56 million. Shareholders will receive an interim dividend of 10 cents per share.
Australian Bureau of Statistics has released merchandise import data for April on Monday, showing April 2014 imports on an international merchandise trade basis were A$20,226m, a rise of A$506m (3%) on the revised March 2014 merchandise imports of A$19,720m.
In China, Mainland China share market closed the session at its lowest level in two months today, as concerns about a slowdown in the world's second-largest economy after data released over the weekend showed further signs of distress in China's property market. The benchmark Shanghai Composite finished 21.32 points lower at 2005.18, after briefly dropping below 2000 mark.
Financials fell on Beijing's new interbank lending rules, which includes capping the size and maturity of loans. China Minsheng Bank Corp declined 3.4% to 7.42 yuan, Industrial Bank Co 2.8% to 9.69 yuan and China Merchants Bank 1.7% to 9.86 yuan.
Property developers were hit following April's home price data. China Merchants Property Development Co declined 1.6% to 16.39 yuan and Poly Real Estate Group Co eased 0.9% to 7.42 yuan.
In Hong Kong, shares in the city's market finished marginally lower after clawing back most of intraday losses due to bargain buying following early selloff triggered by concerns about a slowdown in the world's second-largest economy. The benchmark Hang Seng Index declined 8.41 points to 22704.50 on turnover of HK$47.15 billion. The benchmark index fell nearly 157 points at one point but recovered most of its losses by market close.
Chinese lenders were lower as the PBoC, CBRC, CSRC, CIRC and SAFE, jointly released new guidelines on regulating interbank business on Friday. CCB (00939) and ABC (01288) fell 0.2% and 0.9%. CM Bank (03968), Minsheng Bank (01988), CEB Bank (06818) and BCQ (01963) all dipped in a range between 0.7% and 1.6%.
Lottery counter bucked the market trend on talks that the authorities may issue internet lottery licenses before the World Cup races. China Lotsyn (01371) soared 13.33% to HK$0.68. Rexlot (00555) jumped 8.64% to HK$0.88. China Netcom Technology (08071) shot up 7.25% to HK$0.37. However, HSBC (00005) was up 0.8% to HK$82, rising for six consecutive days, lending support to the market.
Property developers declined after data showed a spreading slowdown in China's housing market. China Resources Land dropped 1.2% to HK$15.12. China Overseas Land & Investment Ltd. lost 1.4% to HK$18.98.
Hong Kong's composite interest rate, measure the average cost of funds of banks, increased by 2 basis points from March to 0.43% at the end of April 2014. The rise in the composite interest rate in April reflected increases in the weighted funding cost for both deposits and interbank funds.
Census and Economic Department of the Hong Kong said on Monday that Hong Kong's seasonally adjusted unemployment rate stood at 3.1% in February - April, same as that in January - March. The underemployment rate increased from 1.2% in January - March to 1.4% in February – April.
In India, key benchmark indices edged higher in choppy trade, with the market sentiment boosted by Narendra Modi's comments in his victory speeches in his home state of Gujarat on Friday, 16 May 2014, where he stressed on the country's development and good governance. The market sentiment was also boosted by a statement from global credit rating agency Moody's Investor Service that BJP's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges. The market sentiment was also boosted by data showing that foreign funds made massive purchases of Indian stocks on Friday.
As per provisional closing, the S&P BSE Sensex was up 195.35 points or 0.81% to 24,317.09. The CNX Nifty was up 50.05 points or 0.69% to 7,253.05.
India index heavyweight Reliance Industries (RIL) rose 3.13% to Rs 1,114.35. RIL after market hours on Friday, 16 May 2014, said that its board has recommended the appointment of Nita M. Ambani, the Chairperson of Reliance Foundation, as a director on the board of RIL. She is being nominated to the board in place of Ramnik H. Ambani, who is retiring at the age of 90 years.
ONGC surged 8.07% to Rs 416 after scaling a record high of Rs 419.70 in intraday trade. ONGC on Sunday, 18 May 2014, said that the company has scaled its highest-ever market capitalization of Rs 3.56 lakh crore in intra-day trade on 16 May 2014, indicating its hidden potential to its investors. In intra-day trade on 16 May 2014, ONGC scrip logged a new peak of Rs 416.35 (on National Stock Exchange), taking its market capitalization to highest ever value. ONGC said its market capitalisation is 51% higher than the next highest valuable company among the listed CPSEs. ONGC said that the company remains committed to create more value for all its stakeholders.
Crompton Greaves advanced 13.79%. With reference to the news item appearing in leading news channel titled "Crompton Greaves $15 - million deal with Spanish Company", Crompton Greaves during market hours clarified that the company follows a policy of disclosing material price sensitive events. In this context, the order mentioned in the abovementioned email is less than 1% of Crompton Greaves' consolidated turnover for the year ended 31 March 2013, and hence, is not considered for disclosure under Clause 36 of the Listing Agreement., Crompton Greaves said in a statement.
DLF surged 7.57%. DLF during market hours said that the Hon'ble COMPAT has pronounced the order today, 19 May 2014, upholding certain findings of the earlier orders of CCI. The company is yet to examine the detailed order and therefore the company at this stage will not be in a position to make any further comments. The company shall be challenging this order passed by the Hon'ble COMPAT in the Hon'ble Supreme Court for which COMPAT has given us 60 days time, DLF said. The realty major said that the company wishes to point out that it has successfully delivered Park Place, Belaire and Magnolia projects which were the subject matter of the above appeals. The company has respected in true letter and spirit the customer commitments made by it, DLF said. In testament thereof, out of over 2,600 apartments, over 2,200 have been handed over and more than 1,800 families are already residing therein, DLF said.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index rose 0.13%. South Korea's KOSPI index was up 0.08%. New Zealand's NZX50 fell 0.35%. Singapore's Straits Times index fell 0.16 point. Indonesia's Jakarta Composite Index fell 0.33%. Malaysia's KLSE Composite added 0.2%.
