Asian markets: Aiful is awful as the region's stocks decline

Markets across Asia retreated Friday, with the MSCI Asia Pacific Index down 0.4 percent from yesterday's one-year high.

Japan's Nikkei index slipped 0.7 percent, closing at 10,371. Aiful Corp. led declines, plummeting 27 percent for the day. Shares in Aiful, the country's third-largest consumer lender, plunged after the company announced it was seeking to reschedule debt payments. The company's woes may have deepened as a result of new regulations put in place by the Japanese government, which include caps limiting the interest rates lenders can charge and also require lenders to repay borrowers who had been charged too much interest.

Takefuji Corp., Japan's fourth-largest consumer loan company, also plunged 9.5 percent, causing Standard & Poor's to place both companies on credit watch for possible downgrades.

But it's not clear that the lending regulations are hurting all Japanese lenders equally: Mitsubishi UFJ Financial Group, Inc. managed a gain of 2.5 percent today, and Sumitomo Trust & Banking Co. Ltd. traded up 0.2 percent.

Japanese real estate stocks were among the worst-performing sectors after the Ministry of Land, Infrastructure, Transport and Tourism reported that the country's average land price fell 4.4 percent last year. Mitsui Fudosan Co. Ltd., Japan's leading property developer, lost 2.3 percent and Mitsubishi Estate Co. Ltd. slid 2.3 percent. Building-related stocks also fell, with Sumitomo Osaka Cement Co. Ltd. diving 9.6 percent and Japan Steel Work falling 3.1 percent. These stocks won't have a chance to bounce back until the Japanese stock market reopens on September 24, after the Japanese holiday celebrating the autumnal equinox and Respect-for-the-Aged Day.

In China, the Shanghai Composite dropped 3.1 percent to close at 2,963. Shares in steel companies were hit hard, as news spread that the U.S. might slap duties on steel pipes imported from China. As rumors swirled, shares in Wuhan Iron & Steel Co. Ltd. tumbled 5.8 percent, Maanshan Iron & Steel slid 5.3 percent, Beijing Shougang Co. Ltd. fell 5.1 percent and Baosteel Group Corp. dropped 4.1 percent.

In Hong Kong, the Hang Seng was down 0.8 percent, with property and banking stocks falling sharply amid concerns that the central bank might curtail lending to prevent a possible increase in risky loans. Most major property companies sustained losses: Hang Lung Properties Ltd fell 3.9 percent, Henderson Land Development Co. Ltd. dropped 2.6 percent, and New World Development Ltd. lost 3.5 percent. Shun Tak Holdings Ltd., which develops property and operates the territory's vast ferry network, plunged 6.7 percent.

Only a few Hong Kong-listed property companies saw gains today. Poly Hong Kong Investment Ltd. soared 15 percent after China Investment Corp. committed to purchasing HK$409 million ($53 million) of new shares, according to Bloomberg. And Shimao Property Holdings Ltd. was also up 1.9 percent. Both companies are involved in developing land in Mainland China, a market with extraordinary long-term potential.


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