Most regional markets turn negative
City Index June 15, 2011 5:47 PM
<p>The positive momentum stalled across the region today the MSCI Asia Pacific Index down 0.3% and China’s Shanghai Composite Index dropped 0.5%. The euro weakened for […]</p>
The positive momentum stalled across the region today the MSCI Asia Pacific Index down 0.3% and China’s Shanghai Composite Index dropped 0.5%. The euro weakened for the first time in three days against the dollar as European Union officials struggled to break a deadlock on a second Greek rescue plan. Australia’s dollar climbed after the Reserve Bank said interest-rate increases were needed, while oil and copper retreated.
Bucking the negative trend, Philippine stocks rose, driving the benchmark stock index to its biggest gain in more than two months, after Moody’s Investors Service said it upgraded the country’s credit rating to two levels below investment grade. The country’s foreign and local currency long-term bond ratings were increased to Ba2 from Ba3, Moody’s said in a statement today. The outlook is stable.
Meanwhile the outlook for Chinese developers was cut to “negative” from “stable” by Standard & Poor’s, which said tighter credit and further government curbs may lead to rating downgrades in the next year. Property sales may start to slow as the government’s policy “starts to bite,” leading to price cuts that may drive home prices 10% lower in the next 12 months, the credit rating company said. Hong Kong’s real estate market faces the risk of a “sharp correction,” S&P also said in the statement today.
Staying in Hong Kong, Italian luxury-goods maker Prada who is seeking to raise $2.6 billion in a Hong Kong initial public offering, received bids from investors mostly around the middle of the price range according to three people with knowledge of the transaction. Companies have struggled to get top valuations in Hong Kong IPOs as the Hang Seng Index has fallen every day but one this month as of yesterday. Samsonite International SA on June 10 priced its IPO at HK$9.73 billion ($1.25 billion), the low-end of a revised range. Leather-goods maker Coach Inc. also plans to list shares in Hong Kong to capitalize on demand for luxury
In other corporate news, HTC Corp was the biggest drag on the regional benchmark index, dropping 7% in Taipei trading after Macquarie Group Ltd. cut its investment rating on the mobile-phone maker. QBE Insurance Group Ltd. slumped 3.4% after Australia’s largest insurer by market value forecast that its insurance margin in the first half will be lower than last year.
In commodities, Australian Wheat production in Australia could total up to 7.8% more than forecast and in line with last year’s harvest as favorable weather aids the crop. The revised prediction compares with a March 1 projection of 24.3 million tons and estimated record output of 26.3 million tons in 2010-2011, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report today.