Sony at four-year low on export gloom

 

JAPANESE giant Sony sagged in Asian trade today, striking its lowest level in more than four years as investors feared the maker of consumer electronics would struggle to secure overseas sales if demand faltered.

The day's weakness had been preceded by analysts' downgrades earlier in the week amid gathering fears about the vibrancy of the US economy, one of Sony's main markets. Wall Street's slide yesterday, even as US marines poured into Baghdad, served as a powerful reminder that the global economic outlook remains clouded, at best. Sony's shares, often viewed as a convenient proxy for the strength of Japan's exporters, dropped 140 yen, or 3.5%, to 3880 yen.

The decline breached the 3960 yen level that the stock touched in the wake of 9/11, and was at its lowest since January 1999.

Analysts said much of the selling pressure appeared to have come from institutional sales, especially large, domestic pension funds. Other leading exporters also dropped as overseas sales represent more than half Japan's economic growth, and in turn US consumers typically account for a third of export sales. Matsushita Electric Industrial, a fellow consumer electronics manufacturer, dropped 41 yen, or 4.1%, to 958 yen, while tyremaker Bridgestone was down two yen, or 0.2%, at 1448 yen.

Elsewhere, the announcement of record profits of £442m at convenience store chain Seven-Eleven Japan failed to perk up its stock. The shares in the largest retailer by market capitalisation fell 1% to 3030 yen.

The benchmark Nikkei 225 slipped back below the 8000-points threshold, shedding 77.49 points, or 0.96%, to 7980.12.

There was a similar story in Hong Kong, where the Hang Seng was off by 11.1 points at 8625.7. Exporter Johnson Electric-which makes micro motors, fell 10 cents, or 1.2%, to HK$8.70, and consumer goods player Li & Fung softened 1.2%, down 10 cents to HK$8.50.

HSBC, the global bank, was 25 cents weaker at HK$82.50, a fall of 0.3%. But more localised lenders were hit harder, another round of victims of the flu. 'We have cut our earnings-per-shares estimates by 10% to 23% across the sector due to the severe acute respiratory syndrome impact, macro slowdown, property price contraction, and risk of higher non-performing loans,' Goldman Sachs said in a recent research note.

Bank of China Hong Kong was off 15 cents, or 1.9%, at HK$7.90, while Bank of East Asia dipped 25 cents, or 1.8%, to HK$13.60.

The Taiwan market ticked higher. Acer, which makes home computers, added 3% to T$34.30. Sales last month were close to twice those of a year ago. China Steel rose 1% to T$21.80 as pre-tax profits surged more than fourfold. Aided by resilience in chipmakers, the Weighted index edged ahead 0.6%, or 2.93 points, to 4540.32.

Flu-hit Qantas, Australia's largest airline, rose two cents to A$3.09, a gain of 0.65%. Its bid to form an alliance with Air New Zealand got the initial thumbs-down from regulators in both countries, as had been widely expected. The All Ordinaries softened shed 11 points to 2904.7.

In Malaysia, which has broken fresh ground in the fight against the flu and banned all mainland tourists, the benchmark Kuala Lumpur Composite softened 1.68 to 632.73.

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