Asian Stocks Fall for First Time in Three Days; Developers Drop

By Chen Shiyin and Patrick Rial

Jan. 10 (Bloomberg) -- Asian stocks fell for the first time in three days led by developers and banks on concern U.S. credit- market losses will spread.

Mitsubishi Estate Co. declined after Credit Suisse Group said defaults on U.S. subprime mortgages may prompt overseas investors to sell their property holdings in Japan. Commonwealth Bank of Australia led the drop among banks after Morgan Stanley cut the stock's rating.

``Global investors are reducing their real-estate investments across the board,'' said Hitoshi Yamamoto, who manages the equivalent of $5.5 billion in Japanese equities as chief executive officer of Fortis Asset Management in Tokyo.

The MSCI Asia Pacific Index fell 0.5 percent to 154.16 as of 12:05 p.m. in Tokyo, snapping a two-day, 1.3 percent advance. A measure of financial stocks including property developers and banks was the biggest drag on the benchmark.

Japan's Nikkei 225 Stock Average lost 0.8 percent to 14,482.22. Australia's S&P/ASX 200 Index retreated 0.6 percent, paced by BHP Billiton Ltd., after Alumina Ltd. reported profit that missed its own forecast and the price of metals and crude oil declined.

U.S. stocks rose yesterday, helping the Standard & Poor's 500 Index to its biggest gain in more than two weeks. Hewlett- Packard Co., the largest personal-computer maker, climbed after predicting that its earnings will withstand an economic slowdown.

Property Shares Fall

Mitsubishi Estate, Japan's biggest property developer by market value, fell 3.2 percent to 2,390 yen. Sumitomo Realty & Development Co., Japan's third-largest developer, slumped 4.4 percent to 2,505 yen. Urban Corp., which specializes in real estate securitization, dropped 4.8 percent to 1,376 yen.

``Foreign investors who actively invested in Japanese real estate could decide to sell their Japanese real estate holdings,'' Yoji Otani, an analyst at Credit Suisse, wrote in a note to clients. ``In 2008, we are likely to see a situation in which only real estate firms with a genuine understanding of real estate survive.''

Centro Properties Group, the Australian owner of U.S. malls, plunged after the Australian newspaper said the country's securities regulator questioned the company about accounting for its debt.

The stock dropped 19 percent to A$0.90, the biggest decliner on the MSCI World Index by percentage.

Cheung Kong (Holdings) Ltd., Hong Kong's second-biggest developer by market value, slipped 3.7 percent to HK$140.60, set for its biggest drop since Dec. 17. Shareholders are seeking to sell 33.5 million shares at HK$140.50 apiece, according to an e- mail from UBS AG, the sale's arranger.

Commonwealth Bank

Commonwealth Bank, Australia's second-largest bank, declined 1.2 percent to A$56.16. Richard Wiles, an analyst at Morgan Stanley, cut the stock to ``equal-weight'' from ``overweight.''

The stock also fell after the Australian newspaper said Commonwealth Bank and three other banks in the nation invested A$850 million ($750 million) in Countrywide Financial Corp., the biggest U.S. mortgage lender. Countrywide's shares have slumped in New York after the company denied speculation it will file for bankruptcy amid a rise in foreclosures and late payments.

National Australia Bank Ltd., the country's second-biggest provider of mortgages, lost 1 percent to A$35.24. Westpac Banking Corp., declined 1.3 percent to A$26.62, while Australia & New Zealand Banking Group Ltd. slid 0.6 percent to A$26.20.

Declining Commodity Prices

BHP Billiton, the world's biggest mining company and Australia's largest oil producer, slid 0.7 percent to A$38.92. Rio Tinto Group, the No. 3 mining company, declined 0.3 percent, its fourth straight drop.

Alumina, partner in the world's biggest producer of the material used to make aluminum, said full-year profit excluding one-time items fell to A$405 million, compared with its July forecast of about A$490 million. The stock dropped 2.4 percent to A$6.16.

Copper declined 0.5 percent yesterday from a two-month high in New York on concern slowing global economic growth will curb demand for metals. Crude oil slipped 0.7 percent yesterday to $95.67 a barrel.

Korea Zinc Co., the world's second-biggest zinc refiner, dropped 4.4 percent to 141,500 won, snapping a five-day, 20 percent surge. The company said yesterday it expects net income of 311.9 billion won this year as the price of zinc may fall by a third. The projection is 30 percent lower than analysts' estimates for 2007 profit.

In Tokyo, shares of Casio Computer Co. surged 7.2 percent to 1,272 yen after Mizuho Securities Co. raised its rating on the stock to ``buy'' from ``neutral,'' saying earnings will recover next fiscal year.