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Asian Stocks: Japan Falls, Banks, NTT Corp. Pace Decline, Australia Down

By Yukiko Takai

Tokyo, Jan. 21 (Bloomberg) -- Japanese stocks fell, led by Sakura Bank Ltd. and other lenders as corporate investors took advantage of the Nikkei 225 stock average's rally to a 2 1/2 year high to sell shares they bought in each other to cement business ties.

The Nikkei 225 slipped 145.88, or 0.8 percent, to 18,862.13. The index on Monday reached 19,437.23, its highest since August 1997. The broad Topix index fell 9.55, or 0.6 percent, to 1623.56. Nippon Telegraph & Telephone Corp. fell for a fourth day on concern its earnings may be squeezed by a dispute between the U.S. and Japan over fees the former monopoly telephone company charges U.S. companies to access its network. ``There are few incentives to buy shares. That makes it look like there's more selling of banks than usual,'' said Kazue Mayuzumi, a manager in Nikko Securities Co.'s equity department.

In other markets, Korea's benchmark Kospi index fell 1.8 percent as investors sold easily traded large stocks to raise cash for predicted customer withdrawals next month. Australia's All Ordinaries Index fell 1 percent as investors bet the market's biggest company, News Corp., has risen further than warranted by its earnings outlook.

Sakura Bank, the nation's fifth-biggest lender, fell 3 yen to 659. Nippon Steel Corp., the world's second-largest steelmaker, declined 2 yen to 259.

Japanese banks owned 33.9 trillion yen of listed shares at the end of September 1999, according to a report that ratings agency Standard & Poor's Corp. released last year. That's about 9.4 percent of their assets in equities, much higher than that of international rivals. Banks need to sell some of these shares to remove the risk of market declines affecting the asset values and to improve their credit ratings, S&P said.

NTT fell 1.3 percent to 1.55 million yen.

Korea

The Kospi fell 16.58 to 929.32, on course for a third decline in four days. Korea Electric Power Corp., Pohang Iron & Steel Co. and other stocks with large market value fell as institutions sold easily traded stocks to raise cash for predicted customer withdrawals which will begin on Feb. 8.

That's when Korea ends a restriction on redemptions from funds that included Daewoo Group debts, which took effect at the end of last year to prevent a run on the funds after Daewoo's financial troubles came to light. Daewoo is struggling under at least $78 billion in debt. ``I plan to hold off selling or buying shares, at least until the beginning of February when redemption jitters are put to rest and the U.S. Federal Reserve announces its monetary policy,'' said Park Key Pyeong, a fund manager at Hanyang Securities Co. in Seoul, managing 25 billion won ($22.2 million), adding he expects the key index to stay at the current level until the beginning of next month.

Korea Electric Power Corp., Korea's power generation monopoly, lost 3.1 percent to 34,900 won. Pohang Iron & Steel Co., the world's largest steel mill, shed 4 percent to 132,000 won. Korea Telecom Corp., Korea's largest fixed-line operator, fell 3.3 percent to 130,500 won.

Korea Tobacco & Ginseng Corp. rose 7.7 percent to 22,500 won after Ohn Ki Sun, an analyst at Dongwon Securities Co. in Seoul, said it is undervalued, the Maeil Business Newspaper reported. The corporation has the capability to extend growth with 170,000 distribution channels nationwide and cigarette prices are expected to rise, the report said.

Australia

Australia's All Ordinaries Index fell 30.20 to 3106.90. News Corp. fell 2.9 percent to A$16.60. The world's fourth largest media company is trading at 64.3 times earnings in the year to June 30 compared to the All Ordinaries Index which is trading at 26.7 times.

St. George Bank Ltd., the fifth-biggest bank by market value, rose 8 percent to A$12.06, after National Australia Bank Ltd., the country's biggest bank, said it increased its stake in the business to 9.4 percent. NAB fell 0.8 percent to A$22.34. ``NAB is so large that it's hard to see why St.George is so important to them on a macro scale,'' said James Ellis, banking analyst at Warburg Dillon Read Australia Ltd. in Sydney who has a ``hold'' recommendation on NAB shares and a ``reduce'' recommendation on St.George shares.

Broken Hill Proprietary Co., the nation's biggest resources company, fell 2.3 percent to A$19.62. BHP may lose about A$5 million in coal output as labor unions carried out a threat to expand nine weeks of strikes to include the coal division of Australia's largest resources company.

In other markets: (See TNI ASIA MOV for detailed coverage)

Malaysia's Kuala Lumpur Composite Index rose 0.7 percent to 957.51 as investors bet more money will flow into the stock market leading up to the country's admission into two of Morgan Stanley Capital International Inc.'s portfolio indexes on May 31. MSCI indexes are the most widely used by fund managers as guides to allocate their investments. Telekom Malaysia Bhd., the biggest capitalized stock in the country, advanced 1.9 percent to 16.20 ringgit. Power utility Tenaga Nasional Bhd. rose 0.8 percent to 12.20 ringgit.

New Zealand's Top 40 Index rose 0.3 percent to 2093.57. Telecom Corp., the nation's dominant phone company, rose 1.2 percent to NZ$8.45, recouping much of its 4 percent slide since Jan. 1. Air New Zealand's Class B shares, the worst-performing stock on the New Zealand market so far this year, rose 3.1 percent to NZ$2.30, after yesterday touching its lowest level since October 1998 on concern about rising fuel prices and a planned challenge from a new Richard Branson airline. ``With Air New Zealand it's probably local interest,'' behind the buying in the Class B shares, said Nigel Scott, a broker with ABN Amro New Zealand Ltd. ``That's been really knocked down.''

Singapore's Straits Times Index fell 0.7 percent to 2299.77. Companies that depend on the island's economy fell after the Dow Jones Industrial Average fell for the third day. DBS Group Holdings Ltd., the island's largest bank, fell 1.3 percent to S$22.40, as its price had risen to unattractive levels. Overseas Union Bank Ltd. also fell 1.3 percent to S$22.40. Singapore Airlines Ltd., the national airline, fell 1.6 percent to S$18.70. City Developments Ltd., the biggest developer on the exchange, fell 2.3 percent to S$8.50. Chartered Semiconductor Manufacturing Ltd., the world's No. 3 chip foundry, rose 3.8 percent to S$13.60, after it posted a fourth-quarter profit of 2 cents a share -- close to IBES International Inc.'s estimate of 2.8 cents -- its first profit in almost two years. The company also plans to build a new $2.1 billion plant.

Taiwan's TWSE Index rose 1 percent to 9224.85. Computer chipmakers gained after the Commercial Times reported that United Microelectronics Corp. increased its wafer prices by 10 percent starting the second quarter. UMC, the world's second largest made- to-order computer chip maker, rose 2.3 percent to NT$113.50. Taiwan Semiconductor Manufacturing Co., the world's largest computer chip maker to customers' designs, rose 1.1 percent to NT$182.

-- Hokie (Hokie_@hotmail.com), January 20, 2000

Answers

Hokie, There was a severe slippage last week with no effect on our markets. This is small in comparison. Used to be there was an effect.

-- Mara (MaraWayne@aol.com), January 21, 2000.

Guess Yukiko Takai was in a coma last week, heh.

-- Hokie (Hokie_@hotmail.com), January 21, 2000.