Asia Shipping Shares Down on Empty Cargo Space, Real Estate Stocks Slide


In Asia Wednesday China's Shanghai Composite Index slid 0.7% to 3,049. In both Japan and Hong Kong, major indexes remained virtually unchanged with the Nikkei 225 Index closing at 10,564 and the Hang Seng ending the day at21,208.

A decline of 1.5% in the Baltic Dry Index sent shares in shipping companies lower today. The index measures the demand for shipping services and fluctuates according to the cost of shipping cargo around the world. A fall in the index means fewer goods are taking up less room on the massive cargo ships crisscrossing the seas. In other words, demand for stuff is down.

In Japan, Kawasaki Kisen plunged 2.3% and Mitsui O.S.K. Lines sank 1.3% and Nippon Yusen K.K. slid 0.9%. In Hong Kong, Pacific Basin Shipping plunged 2% and China Cosco retreated 1.7%.

Toyota sank 1.4% in today's trading after a recall of Tundra pick-up trucks was expanded across the U.S. Among other problems, the trucks have a corrosion problem that could affect brake lines and allow the spare tire to fall out from underneath the vehicle. Other Japanese car makers rose with Isuzu climbing 1.3%, Suzuki advancing 1.2% and Honda adding 0.2%.

In China, car makers lost value with SAIC Motor plunging 3.7%, FAW Car falling 3% and Ford partner Chongqing Changan Automobile diving 2.8%. But an overall increase in demand around the country for cars and other appliances sent steel producers higher today: Baoshan Steel rose 1.3% and Angang Steel gained 0.3%.

Chinese property companies slipped today after the Chinese statistics bureau released data showing that real estate prices were up 10.7% compared with last year, reports Bloomberg, saying that in some places like Hainan, a vacation destination with beaches and palm trees, prices are up more than 50%. Whispers are swirling that these inflated prices could be a sign of a real bubble, despite arguments that Chinese property is still a great investment. Today Poly Real Estate sank 1.8% and China Vanke lost 1.5%.

In Hong Kong, real estate shares were also lower: Hang Lung plummeted 1.9%, China Overseas Development plunged 1.7% and Sino Land fell 1.3%. Both Henderson Land and New World Development were down 1%.

Meanwhile, Cathay Pacific spiked 4.7% after announcing $503 million in second-half profits -- far better than the loss of more than $1 billion it had posted a year earlier, reports Bloomberg. The improvement stems from the sale of an engineering venture and a decrease in the number of flights as a result of falling demand. The company's balance sheet was also improved by employees taking unpaid leave and staff foregoing their 2008 bonuses. But Cathay says passenger numbers are rising again -- perhaps it's all those property moguls jetting off to their high-priced homes in Hainan.