Asian Stocks Fall, Led by TDK, Fujitsu, Chartered Semiconductor
By Tomoko Yamazaki
Tokyo, Feb. 1 (Bloomberg) -- Asian stocks fell, led by TDK Corp., Chartered Semiconductor Manufacturing Ltd. and other exporters as the U.S. Federal Reserve's half-point interest rate cut may not be enough to revive an economy that's growing slower than expected.
Japan's Nikkei 225 stock average fell 0.5 percent, as investors fret U.S. demand for Asian exports will fall, while Singapore's Straits Times Index slid 0.5 percent. Korea's Samsung Electronics Co. led the Kospi Index 0.9 percent lower. In Taiwan, the TWSE Index shed 0.6 percent, led by Taiwan Semiconductor Manufacturing Co. on concern its earnings in the first quarter will drop.
``Computer-related stocks are going to be dragged as more figures confirm the deteriorating growth of the U.S. economy and slowing demand'' for Asian products, said Yoshihiro Maeda, who helps manage $6.9 billion in assets at Asahi Tokyo Investment Trust Management Co. in Tokyo.
The Fed cut their target for the federal funds rate - the overnight rate banks charge each other for loans - from 6 percent to 5.5 percent as a report showed the U.S. economy expanded 1.4 percent in the fourth quarter, less than the 2 percent forecast in a Bloomberg News survey. On Jan. 3, Fed policy-makers unexpectedly lowered the rate by 0.5 percentage points. That's the first time in 16 years the Fed slashed rates by one percentage point in a month.
Among Asian exporters feeling the pain of weakening U.S. growth, Singapore electronics companies Chartered Semiconductor and ST Assembly Test Services Ltd., this week warned sales would slow, crimping profits, because of weaker demand for computer chips and other goods.
Falling U.S. orders for chips and other goods dragged Singapore's exports down 4.9 percent in December, the first decline in almost two years. Japanese exports to the U.S. by volume fell 4.5 percent in December from a year ago.
Japan's Nikkei lost 64.00 to 13,779.55, while the Topix index fell 0.1 percent to 1299.01.
TDK, Japan's largest maker of magnetic parts for hard disk drives, whose overseas sales account for more than two-thirds of its total sales, fell 1.1 percent to 10,210.
Fujitsu, Japan's largest computer manufacturer who exports more than a third of its products overseas, lost 0.7 percent to 1949 yen, while Advantest Corp., a Fujitsu affiliate and the world's biggest maker of equipment used to test computer memory chips, led declines in the Nikkei, falling 3.9 percent to 12,400 yen.
Fuji Photo Film Co., whose U.S. sales account for 28 percent of global revenue, lost 0.9 percent to 4600 yen, paring an earlier loss of 1.5 percent. The filmmaker is trying to expand its revenue source beyond the U.S. on concern the world's largest economy will experience slower growth.
Limiting losses, Toyota Motor Corp., Japan's biggest automaker, gained 1.5 percent, to 4030 yen. Toyota Motor said U.S. sales of Toyota and Lexus brand vehicles should rise 2 percent this year despite forecasts the market will shrink by nearly a million units.
The stock also got a boost as industry data showed that Japan's sales of new passenger vehicles for the country's 11 major automakers, increased 2.6 percent in January from a year earlier, the fourth consecutive monthly increase
Singapore
Singapore's Straits Times Index slid 8.91 to 1982.38.
Chartered Semiconductor Manufacturing Ltd. and other electronics component makers fell as two half-point rate cuts in one month, suggests that the U.S. economy may be slowing faster than expected, hurting demand for Singapore-made goods.
``A 100 basis point cut in U.S. interest rates in just one month seems quite drastic and could mean that the U.S. economy is deteriorating quite fast,'' said Jason See, chief investment officer at OUB Asset Management Ltd., which invests S$3.7 billion ($2.1 billion). ``It's quite a concern.''
Chartered Semiconductor, the world's No. 3 maker of chips to companies' design, lost 5 percent to S$5.75. Venture Manufacturing Ltd., the city-state's largest electronics manufacturer by market value, dropped 4.8 percent to S$16.90.
Limiting losses, Keppel Corp., Singapore's largest diversified group, added 5 percent to S$3.34, it's biggest one- day gain in more than a month. The stock gained on expectations the company will release better-than-expected full-year results next week, analysts and traders said.
Korea
Korea's Kospi Index fell 5.61 to 612.30, its second decline in four days.
Samsung Electronics Co., the world's fourth-largest semiconductor maker, fell 3 percent to 213,500 won as a slowing U.S. economy may hurt its exports. The U.S. receives as much as 38 percent of Samsung Electronics' exports.
``Investors are betting it will take time for the U.S. economy to turn around even after the rate cut,'' said Chung Doo Sun, who manages 300 billion won ($238 million) in assets at CJ Investment Trust Management Co. in Seoul. ``The actual impact may be seen through economic indicators after a couple of months.''
Among gainers, Hyundai Heavy Industries Co. rose 6.6 percent to 28,150 won. The stock rose after Hyundai Engineering & Construction Co. said it may receive as much as $400 million in payment guarantees from the Korean government.
Taiwan
Taiwan's TWSE Index fell 38.27 to 5,897.93. TSMC, the world's largest customized computer chipmaker, fell 3.8 percent to NT$101.5, on concern first-quarter earnings will drop from the fourth quarter 2000.
``At the earliest, it will be the second quarter before the electronics sector works through the inventory correction,'' said Daniel Heyler, an analyst at Merrill Lynch Taiwan Ltd.
Heyler expects TSMC's earnings per share in the first quarter to drop 26 percent to NT$1.34 from his fourth quarter forecast of NT$1.82.
Other chipmakers fell as the Nasdaq Composite Index lost 2.3 percent yesterday. United Microelectronic Corp., TSMC's biggest rival, dropped 3.4 percent to NT$57.50.
The TWSE Index, of which electronic shares make up 58 percent of market value, trades at 24 times this year's estimated earnings compared with the Nasdaq which trades at 164 times.
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