Asian Stocks Fall on China Loan Concern; Metals Decline

May 25 (Bloomberg) --
"Asian stocks declined, heading for a fourth week of losses, as bank officials said China’s biggest lenders may fall short of loan targets for the first time in at least seven years. Commodities and the Australian dollar slid.


The MSCI Asia Pacific Index retreated 0.7 percent as of 12:47 p.m. in Tokyo. Standard & Poor’s 500 Index futures dropped 0.4 percent. Japan’s Topix Index slipped 0.2 percent, poised for its longest weekly losing streak since November 1977. The so- called Aussie lost 0.3 percent. The S&P GSCI Index of 24 raw materials declined 0.2 percent. Oil fell 0.4 percent to $90.34 a barrel in New York.

China’s largest banks may miss their lending targets as the economic slowdown crimps demand for credit, according to three bank officials with knowledge of the matter. Stocks rose earlier after Italian Prime Minister Mario Monti said Greece is likely to stay in the euro and that a majority of the region’s leaders support issuing a joint bond to fight the debt crisis.
In China, “there’s very little demand for borrowing because you still have this restraint on property development,” said Pauline Dan, chief investment officer at Samsung Asset Management Co.’s Hong Kong division. The firm oversees $100 billion globally. “There’s continuous concern about what happens in the euro zone, and this is causing people to stay off the market.”

The MSCI Asia Pacific Index has fallen 1.2 percent this week and is heading for its longest weekly losing streak since November. The equity gauge has lost 2.4 percent in 2012.

China Banks
The Hang Seng China Enterprises Index sank 1.1 percent today, bringing its drop since this year’s high on Feb. 29 to more than 20 percent. Agricultural Bank of China Ltd. sank 2.2 percent in Hong Kong and Industrial & Commercial Bank of China Ltd. dropped 1.9 percent.

A decline in Chinese lending in April and May means it’s likely the banks’ total new loans for 2012 will be about 7 trillion yuan, less than the government goal of 8 trillion yuan to 8.5 trillion yuan, said one bank official.

“Chinese policy makers are reluctant to cut interest rates just yet,” said Puru Saxena, who oversees about $350 million as chief executive officer of Puru Saxena Wealth Management in Hong Kong. “They are stuck and the economy is suffering.”

Japan Tobacco Inc. advanced 5.1 percent. The maker of Camel and Mild Seven cigarettes agreed to pay 475 million euros ($597 million) for Belgium-based Gryson NV to boost growth in Europe’s roll-your-own cigarette market in the biggest purchase by a tobacco company since 2009.

Consumer Confidence
The euro headed for its biggest five-day decline in seven weeks as signs that Europe’s debt crisis is damping growth curbed demand for the currency. The Aussie traded near a six- month low and is poised to drop for a fourth week.

The 17-nation euro has fallen versus all its 16 major counterparts except the Swiss franc since May 18. Figures next week may show consumer confidence in the currency bloc was little changed this month, while the jobless rate climbed in April to the highest in 21 years. The dollar advanced against all of its most-traded peers this week as Europe’s weakening economy boosted demand for the relative safety of the currency.

The cost of protecting Asia-Pacific bonds from default dropped, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined 2 basis points to 196 basis points, Royal Bank of Scotland Group Plc prices show. The index is headed for its lowest closing level since May 22, according to CMA. "

To contact Bloomberg News staff for this story: Chua Baizhen in Beijing at bchua14@bloomberg.net ; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net

Steven



Steven Morris CA (SA)
Mobie : 083 943 1858

Fax: 086 671 2498

E-Mail: steven@global.co.za