Asian Stocks Decline; Fujitsu, TSMC, Samsung Electronics Lead
By Tomoko Yamazaki
Tokyo, Feb. 19 (Bloomberg) -- Asian stocks fell, led by Fujitsu Ltd., Samsung Electronics and other computer-related companies after industry leaders such as Dell Computer Corp. said earnings will disappoint investors.
Japan's Nikkei 225 stock average fell 0.4 percent, paced by Furukawa Electric Co. after Nortel Networks Corp. said it will post a loss this quarter. Taiwan Semiconductor Manufacturing Co. dragged the TWSE Index down 1.8 percent, while Hong Kong's Hang Seng Index fell 1.1 percent, led by China Mobile (Hong Kong) Ltd. Korea's Kospi index shed 1.7 percent while Venture Manufacturing Ltd. sent Singapore's Straits Times index down 1.1 percent.
``Investors are still trying to factor in earnings forecast cuts into share prices,'' said Toshiyuki Fukushima, who helps manage $2.2 billion at Sumisei Global Investment Trust Management Co. in Tokyo. Also, ``it's just so hard to find any reasons to start buying stocks right now as there is still uncertainty about Japanese companies' earnings.''
The Nasdaq Composite Index, comprised of some of the biggest computer-related stocks in the U.S., tumbled 5 percent on Friday. Dell shed 6 percent after the biggest U.S. personal computer maker said on Thursday sales and profit this quarter will miss estimates because of stagnant demand.
Nortel Networks, the world's biggest maker of fiber-optic equipment, plunged 33 percent after saying on Thursday it expects a loss this quarter because of slowing U.S. sales.
Though Dell and Nortel made their announcements two trading days ago, investors in Asia tend to wait for the U.S. market's reaction and take their lead from the Nasdaq's performance.
Japan
Japan's Nikkei 225 stock average dropped 55.90 to 13,119.59, after earlier dipping to its lowest day since Oct. 15, 1998. That's about 250 points above a 15-year closing low. The broader Topix index declined 0.8 percent to 1237.80.
Fujitsu, Japan's largest computer maker, fell 1.7 percent to 1713 yen, after Dell warned of slowing sales.
Furukawa Electric, Japan's second-largest maker of cables and fiber-optic parts, dropped 5.3 percent to 1809 yen, extending its four-day, 18 percent drop, after U.S. affiliate JDS Uniphase Corp. plunged 21 percent, tracking the drop in rival Nortel. Furukawa is the largest shareholder of JDS Uniphase, and also sells its products to Nortel.
Sumitomo Electric Industries Ltd., a fiber-optic parts maker, declined 6.5 percent to 1440 yen, following Nortel's decline. The Topix nonferrous metal sub-index, which tracks the performances of cable and wire makers such as Furukawa and Sumitomo Electric, was the biggest decliner on the broader Topix, losing 6 percent.
``The downward revisions in the computer-related industry were more than we thought, and looking at the way the Nasdaq fell, it shows how all the bad news still haven't been folded in the share prices,'' said Shinichiro Takaya, a general manager at Mizuho Investors Securities Co.'s equity sales department.
Taiwan
Taiwan's TWSE Index slipped 108.37 to 5937.30. TSMC, which this month said first-quarter profit will fall as much as 28 percent from the preceding quarter, fell 2 percent to NT$96. Advanced Semiconductor Engineering Inc. fell 5.7 percent to NT$34.8.
Concerns about the slowing domestic economy also dragged stocks lower. The government last week cut its full-year growth forecast to 5.3 percent from 6 percent as electronics exports lost steam and political infighting sapped investor confidence and domestic consumption.
``I will raise cash around here but buy when the market dips,'' said Shih Mei, who manages $16 million in Taiwanese stocks at National Investment Trust Ltd. ``In the next quarter there won't be very good news to speak of in terms of earnings.''
Chunghwa Telecom Ltd. fell 3.8 percent to NT$75.5. The government is considering selling more Chunghwa shares to local investors to raise cash to cover a budget shortfall after it aborted an attempt to sell the shares overseas last month.
Hong Kong
Hong Kong's Hang Seng Index fell 82.47 to 15,547.84, extending its 1.5 percent loss in the past two days. The Hang Seng Information Technology Index fell 2.6 percent after the Nasdaq posted its biggest loss in six weeks.
``As long as earnings visibility remains low, it's difficult to have a rally in the Nasdaq'' and this doesn't help counterparts here, said Husan Pai, who helps invest $3 billion in Asia ex-Japan at Indocam Hong Kong Ltd.,. The Nasdaq gained 5.8 percent this year.
China Mobile, China's biggest cellular operator, fell 2.8 percent to HK$45.20. Legend Holdings Ltd., China's biggest computer maker, fell 0.8 percent to HK$6.50.
Developers rose after the government said it will make it easier for them to sell apartments. Investors also hope a land auction later today will reflect expectations of higher property prices. This is the first auction since the government said last week it will halve the amount of land it will release for residential development for the next fiscal year.
Sun Hung Kai Properties Ltd., Hong Kong's second-largest developer, rose 2.8 percent to HK$83.25. Cheung Kong (Holdings) Ltd., Hong Kong's biggest real-estate developer, rose 0.8 percent to HK$98.25.
Korea, Singapore
Korea's Kospi lost 8.25 to 596.67. Samsung Electronics, the world's biggest computer memory chipmaker and a supplier to U.S. computer makers, lost 1.4 percent to 209,500 won. Trigem Computer Inc., which makes the third best-selling personal computer in the U.S., fell 0.8 percent to 7050 won.
``I was expecting the Kospi to fall at least 3 percent after Nasdaq lost 5 percent,'' said Seo Jung Ho, who manages about $960 million in assets at Daehan Investment Trust Management Co. in Seoul. ``Profit warnings are fueling investors' concern that U.S. economy may face a hard-landing.''
Singapore's Straits Times index lost 1.1 percent to 1949.59. Venture, the city-state's largest electronics manufacturer by market value, shed 6.6 percent to S$15.60, while Omni Industries Ltd., which makes plastic parts for Dell, shed 3.1 percent to S$3.08.
In a statement last week, Singapore's Trade Development Board said demand for global electronics was ``sluggish,'' compared to domestic exports of non-electronics. January shipments of electronics rose 1.9 percent to S$5.3 billion ($3 billion) from a year earlier.
``Fears of disappointment in earnings because of the poor U.S. economy and hopes of interest cuts will keep the markets in a volatile situation,'' said Teng Ngiek Lian, chief investment officer at Value Partners Ltd. in Singapore, who helps manage $57 million in Asia excluding Japan.
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