Asian Shares Slide as China Ups Reserve Ratios, Japan Airlines Plunges
%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Chinese developers sank today amid fears that tightening purse strings may dampen the current building spree. Poly Real Estate plunged 4.1% and China Vanke fell 2.4%. Less building would mean that China's appetite for raw materials may be suppressed, sending shivers through commodity markets. In London, all six of the metals traded on the Metal Exchange fell today and shares in Chinese mining companies went with them. Aluminum Corp. of China, aka Chalco, plunged 7.8%, Jiangxi Copper slumped 5.6% and Baoshan Iron & Steel fell 3.8%.
Chinese-listed banking shares felt the squeeze immediately, with Industrial & Commercial Bank of China (IDCBF) dipping 4.7% and China Construction Bank (CICHF) dropping 5.0%. Brokerages were also harshly affected, with China Everbright Securities plummeting 5.4%, Citic Securities slumping 5.3%, and Haitong Securities plunging 5.1%.
In Hong Kong, it was the same story, with shares in Mainland Chinese banks sliding. Hong Kong banks also declined: HSBC, the most heavily weighted stock on the Hang Seng, fell 1.6% and Standard Chartered (SCBFF) slid 1.7%.
Hong Kong real estate shares sank today. In a market propped up in part by flush speculators from the Mainland snapping up luxury properties in the territory, less liquidity is not welcome news for property developers. Henderson Land (HLDVF), which last year allegedly sold the most expensive property in the world to a Mainland buyer, plunged 6.5%. Hang Lung Properties dropped 4% and Sun Hung Kai fell 3.7%. Developer Country Garden, owned by the richest woman in China and specializing in luxury homes, retreated 4% and Glorious Property, developer of high-end buildings, lost 3.9%.
In Japan, where a new report shows that corporate bankruptcies dropped by 1.1% last year, Japan Airlines (JALSY) doesn't look like it will be following that trend. The airline's stock plunged 81%, falling to a perilous 7 yen per share with Bloomberg reporting that it has lost about $2.5 billion in market value in the last week. It is looking likely that the beleaguered airline will be heading into bankruptcy court for restructuring, which may include deals with either American Airlines or Delta. In what could be Japan's sixth-largest bankruptcy, already anxious Japanese investors could be in for more big losses.