Asian Stocks: N.Z.'s Telecom Falls; Australia to Decline
quote.bloomberg.com
By Margreet Dietz
Sydney, Sept. 26 (Bloomberg) -- New Zealand stocks fell for the seventh time in eight days as Telecom Corp. slid towards a four-year low reached Friday on concern the declining currency, near record lows, is eroding the appeal of the nation's stocks.
``There's still concern over the currency, which is considered a proxy for the New Zealand economy,'' said Shane Gavegan, a trader at Deutsche Securities New Zealand Ltd.
The Top 40 Index fell 4.44 points, or 0.2 percent, to 1982.54. Telecom, which accounts for almost 24 percent of the index, fell 0.5 percent to NZ$5.95.
In other markets, Australia's investors will focus on News Corp. as Liberty Media Corp., AT&T Corp.'s television programming unit, is in talks to more than double its stake in Rupert Murdoch's News Corp. to 20 percent, the Los Angeles Times and other newspapers reported.
Japanese computer-related companies such as NEC Corp. may extend gains Tuesday as concern a weaker European currency will erode exporters' earnings eased after officials from the Group of Seven leading industrial nations pledged to support the European currency if necessary.
In the U.S., stocks fell as investors sold shares of large, computer-related companies, betting third-quarter profits will fall short of expectations.
The Nasdaq erased a 1.7 percent gain and fell for a third day, dropping 62.54, or 1.6 percent, to 3741.22. The Standard & Poor's 500 Index declined 9.69, or 0.7 percent, to 1439.03. The Dow Jones Industrial Average lost 39.22, or 0.4 percent, to 10,808.15.
New Zealand, Australia
Telecom fell, sliding back towards a four-year low reached Friday amid concern about the dollar, which is hovering 1.3 percent above Wednesday's record low. The New Zealand dollar lost more than 20 percent of its value so far this year, which erodes the value of assets denominated in the currency to overseas investors.
Fletcher Energy fell 1.1 percent from a record high to NZ$9.00 as Capstone Turbine Corp., which is 11 percent owned by Fletcher Energy, dropped 12.4 percent. The stock was also hurt by a 3 percent decline in the oil price.
Australia's News Corp. may be active as Liberty Media Corp., AT&T Corp.'s television programming unit, is in talks to more than double its stake in Rupert Murdoch's News Corp. to 20 percent, the Los Angeles Times and other newspapers reported.
In exchange for the larger News Corp. stake, Liberty may transfer its 21 percent stake in Gemstar-TV Guide International Inc. to News Corp., the Los Angeles Times and Financial Times said Friday, without citing sources. Liberty's stake in Gemstar is valued at about $6.73 billion, based on Gemstar's closing price Friday. News Corp. owns about 21 percent of Gemstar, while Liberty owns about 8 percent of News Corp.
``I think it's a net positive for all three companies involved -- Rupert Murdoch wants his hands on some more U.S.-based assets,'' said Vick Khoboyan, an analyst at Financial Management Advisors. ``Gemstar will probably have a bigger footprint worldwide with their (television-program guide).''
Separately, General Motors Corp., the world's largest automaker, said it's considering options for its Hughes Electronics Corp. satellite unit, ranging from keeping its stake to selling it outright. General Motors declined to comment on reports that Rupert Murdoch's News Corp. is looking to buy DirecTV.
Around Asia
Japanese computer-related companies such as NEC Corp. may extend gains Tuesday as concern a weaker European currency will erode exporters' earnings eased after officials from the Group of Seven leading industrial nations pledged to support the European currency if necessary.
In Korea, Chohung Bank, Kookmin Bank, and other banking shares may lead gains in the Kospi, as investors are hopeful about the government's recent announcement that it was seeking 50 trillion won to clean up the local financial industry.
``The government appears to have perceived just how serious the problem in its plans for reforms are and are planning to do something about it,'' said Cho Yong Hyun, a market analyst at Hana Securities Co. ``This can help to foreign investors in regain confidence in the Korea stock market.'' Cho said the Kospi may rise to 600-620.
Taiwan stocks may rise, as investors snap up lenders such as China Development Industrial Bank, convinced their shares are cheap relative to their future earnings.
China Development, the biggest bank in Taiwan, trades at 13 times 2000 earnings compared to the TWSE Index which trades at 27 times.
John Lin, who manages $150 million in Taiwan stocks at National Investment Trust Ltd., has been buying bank shares as he said their shares cost less than their assets are worth.
Taiwan bank stocks ``are at a discount to their book value,'' Lin said.
Hong Kong investors will likely focus on the city's largest shares given the rise in optimism over the outlook for global growth after oil prices fell from a 10-year high.
Results announcements by TCL International Holdings Ltd., Softbank Investment International (Strategic) Ltd., e-Kong Group Ltd., Sino Land Co. and others are likely to grab the attention of investors.
Singapore Telecommunications Ltd. may be active. Shareholders of the island's dominant phone company voted to remove the 49 percent limit on foreign ownership, facilitating future investments by overseas investors. A 15 percent limit remains on the shareholdings of any individual or group in the company.
Ayala Land Inc. and other Philippine developers may fall as borrowing costs rise, making it more expensive for consumers to buy homes. The 91-day Treasury bill yield, which banks use to set mortgage rates, rose yesterday to 9.274 percent, a 15-month high.
Investors in India may focus on software stocks such as Infosys Technologies Ltd. on optimism the company will unveil better-than-expected third-quarter earnings in October first week.
``Infosys will always match analysts expectations on earnings, new clients and so forth, because of the kind of things they do,'' said Sachin Mohindra, who helps manage $40 million at Chescor International in New Delhi. ``I am very bullish on stocks like Infosys and Hughes Software Ltd.'' |
