Expenditure In The Economy

Oct. 29 (Bloomberg) -- South African credit growth slowed to an annual 1.5 percent in September as consumers cut back on spending and banks curbed loans.Credit expansion eased from 2.3 percent in August, the Pretoria-based central bank said on its Web site today. The median estimate of 14 economists surveyed by Bloomberg was for credit growth of 2.2 percent.Consumer spending, which accounts for two-thirds of expenditure in the economy, fell for a fourth consecutive quarter in the three months through June, dropping an annualized 5.8 percent, the central bank said on Sept. 3. Banks, including Absa Group Ltd., South Africa’s biggest retail lender, have cut credit to consumers after defaults on mortgages and car loans mounted.The Reserve Bank left its benchmark interest rate unchanged at 7 percent last week, after lowering it by 5 percentage points since December. Lower borrowing costs have been slow to spur spending in Africa’s biggest economy with the consumer confidence index dropping to 1 in the third quarter from 4 in the previous three months, First National BOct. 29 (Bloomberg) -- Asian stocks fell, extending a global sell-off, as companies from PetroChina Co. to Australia & New Zealand Banking Group Ltd. posted lower-than-estimated profit and China moved to tighten lending rules. The yen rose.PetroChina, the nation’s biggest oil producer, slumped 4.8 percent in Hong Kong. Advantest Corp., the world’s No. 1 maker of memory-chip testers, slid 6.6 percent after posting a wider loss on slumping orders. ANZ Banking dropped 2.1 percent in Sydney as its chief executive officer said the Australian economy is “still fragile.” Industrial & Commercial Bank of China Ltd. sank 2.9 percent on government plans to tighten rules on personal loans.The MSCI Asia Pacific Index slipped 1.4 percent to 114.79 as of 2:50 p.m. in Tokyo, extending a two-day, 2.9 percent decline. The gauge has climbed 63 percent from a more than five- year low on March 9 amid signs the global economy is recovering from its worst slowdown since World War II. The MSCI World Index lost 0.2 percent, after slumping 2 percent yesterday.“Investors are wise to take some of their money off the table,” said Jonathan Ravelas, strategist at Manila-based Banco de Oro Unibank Inc., which has about $8 billion of assets. “There is a lingering doubt in the market if the corporate earnings we are seeing are being driven by actual demand or is it all because of government stimulus spending.”Japan’s Nikkei 225 Stock Average sank 1.8 percent, while Hong Kong’s Hang Seng Index dropped 2.4 percent. Australia’s S&P/ASX 200 Index declined 2.4 percent as BHP Billiton Ltd., the world’s largest mining company, slid 3.3 percent after commodity prices declined.New Home SalesSouth Korea’s Kospi Index declined 1.5 percent. Hyundai Steel Co. tumbled 5.5 percent after cutting product prices. New Zealand’s NZX 50 Index dipped 0.2 percent as the nation’s central bank said it will wait until the second half of next year before raising interest rates.Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The gauge fell 2 percent in New York yesterday, the most in a month, as the Commerce Department said sales of new homes fell 3.6 percent to a level that was lower than the most pessimistic economist’s forecast.Concern the global economic recovery is faltering damped demand for higher-yielding assets. The yen climbed to 132.82 against the euro, its highest since Oct. 14. Treasuries were little changed, with yields near the lowest in a week.Worse Than EstimatedIn Hong Kong, PetroChina dropped 4.8 percent to HK$9.47. The company posted a 24 percent drop in third-quarter profit to 30.8 billion yuan ($4.5 billion) as oil prices slumped from a record. The median estimate of five analysts surveyed by Bloomberg was for a profit of 35 billion yuan.In Tokyo, Advantest slumped 6.6 percent to 2,065 yen after its second-quarter net loss widened to 3.3 billion yen ($36 million) from 2.8 billion yen a year earlier. NEC Electronics Corp. tumbled 8.7 percent to 685 yen after widening its full- year loss forecast.The MSCI World Index tumbled 42 percent last year and the MSCI Asia Pacific Index slumped by a record 43 percent as the global credit crunch dragged economies worldwide into recession. The financial crisis isn’t over, Harvard University professors Kenneth Rogoff and Niall Ferguson said.The Reserve Bank of Australia this month became the first central bank among Group of 20 nations to raise interest rates amid signs of strength in the country’s economy. New Zealand’s central bank maintained the official cash rate at a record-low of 2.5 percent because the economy needs further stimulus as it recovers from a recession.Rising Interest RatesAustralia’s central bank should have waited longer before raising borrowing costs because the economy is “still fragile,” ANZ Bank Chief Executive Officer Mike Smith told reporters in Sydney today.The lender, Australia’s second-biggest provider of business loans, dropped 2.1 percent to A$22.85. Full-year net income fell 11 percent to A$2.94 billion ($2.6 billion), short of the A$3.13 billion analysts in a Bloomberg survey anticipated.Bank of Communications Ltd., China’s fourth-largest lender by market value, declined 6 percent to HK$9.59. The company said third-quarter net income rose 1.5 percent to 7.32 billion yuan ($1.07 billion), missing the 7.45 billion yuan average estimate of eight analysts surveyed by Bloomberg.Industrial & Commercial Bank, the world’s largest bank by market value, fell 2.9 percent to HK$6.07. Bank of China Ltd. retreated 1.7 percent to 3.97 yuan in Shanghai.Personal LendingChinese banks also fell on the proposed rule changes to personal lending, which the China Banking Regulatory Commission said are aimed at ensuring loans enter the real economy. Advances exceeding 300,000 yuan ($43,937) will be given directly to the borrower’s counterparty, rather than the borrower, according to a draft rule.“What we might be seeing is just some signaling, as we’re seeing elsewhere, that they might have to take away some of that stimulus in the private sector just to keep things on an even keel,” Simon Godfrey, a senior investment specialist at Fortis Investment Management, said in a Bloomberg Television interview from Hong Kong. “There could be some negative reaction here.”In Taiwan, Farglory Land Development Co., decreased 5.1 percent to NT$68.90 after the United Daily newspaper said the central bank asked the island’s state-owned lenders to curb loans used for property investment.Global Stock RallyBetter-than-estimated earnings and economic reports have driven the global stock rally since March. Companies in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for Europe’s Dow Jones Stoxx 600 Index.The rally has failed to convince investors and analysts that it’s time to take on more risk. Almost 40 percent of the respondents to a poll of investors and analysts who are Bloomberg subscribers say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive stance.“The market was hoping for some major forecast upgrades that just aren’t coming through as companies are clearly nervous about the second half,” said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees the equivalent of $4 billion. “It’s probably better to wait on buying as stocks are likely headed a bit lower.”Oil, Metals SlumpResources companies declined after crude oil for December delivery tumbled 2.6 percent, the most in a month, to $77.46 a barrel in New York yesterday, while the London Metals Index, a measure of six metals, slumped 3.2 percent.BHP dropped 3.3 percent to A$37.13. Rio Tinto Ltd., the world’s second-biggest mining company, slipped 4.9 percent to A$60.98. Woodside Petroleum Ltd., Australia’s No. 2 oil producer, dropped 3.5 percent to A$46.69. Inpex Corp., Japan’s largest oil explorer, fell 2.7 percent to 749,000 yen. Cnooc Ltd., China’s biggest offshore oil producer, declined 4 percent to HK$11.56.Nippon Mining Holdings Inc. sank 4.7 percent to 389 yen. Japan’s biggest copper producer and an oil refiner said in a preliminary earnings statement first-half net income was 18.8 billion yen, missing its projection by 18 percent amid narrower margins for petroleum products.Hyundai Steel, South Korea’s second-largest steelmaker, slumped 5.5 percent to 77,300 won. The company lowered the price of some products for the first time this year after the cost of steel scrap and competing imports declined.To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net. ank said on Sept. 30.The broad M3 measure of money supply rose 4 percent in September from a year ago, after expanding 5.5 percent in August, the Reserve Bank said.To contact the reporter on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net.