American Depositary Shares of Asian banks and financial companies declined, following weakness in the United States, after an analyst forecast more weakness in the credit markets.
Oppenheimer & Co. analyst Meredith Whitney expects turmoil in the credit markets to extend into at least 2009 and warned of a decline in consumer liquidity. Many consumers, who have been up against a slumping housing market, tight credit and rising gas prices, are cutting back on their spending.
"By our estimates, we believe by 2010, $2 trillion of available credit card lines or 45 percent of total outstanding credit lines will be stripped from consumer liquidity," Whitney wrote in a client note.
The Bank of New York Asia ADR Index, which tracks shares of companies based in China, India, Australia and elsewhere, declined 4.62 points, or 2.7 percent, to 164.55. ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors trade shares of companies based overseas.
In afternoon trading, ICICI Bank Ltd. declined $1.91, or 4.3 percent, to $42.58, HDFC Bank Ltd. shed $4.98, or 4.5 percent, to $104.33, and Shinhan Financial Group Co. declined $3.93, or 3.9 percent, to $96.12.
Westpac Banking Corp. shed $1.86 to $113.95, Woori Finance Holdings Co. declined $1.68, or 2.8 percent, to $58.73, and Mitsubishi UFJ Financial Group Inc. declined 44 cents, or 4.2 percent, to $9.95.
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