Prada cuts prices in IPO dash

Asian markets were mixed after yesterday’s large declines. The MSCI Asia Pacific retreated 0.2%, extending its weekly drop to 1.8%. The MSCI Asia Pacific Index’s seventh straight weekly retreat will be its longest slump since August 2004. Declines yesterday drove the gauge’s valuation down to 14.2 times reported profits, the lowest level since March 30.

South Korea’s Kospi index lost 0.4%, Japan’s Topix index slipped 0.5% and Hong Kong’s Hang Seng Index slid in late Sydney afternoon trading. Oil erased gains of as much as 0.5% in New York, while wheat dropped for a fifth day. Europe’s shared currency fell 0.3% to 114.33 yen and weakened 0.2% to $1.4176 at noon in Tokyo.

Following comments from India yesterday, The Bank of Korea may now also need to slow the pace of interest-rate increases after its fifth move since July 2010 last week because of rising risks to the global economic outlook, a board member said today.

Contrary to Chinese data earlier this week, India’s central bank signaled it may slow the most aggressive monetary tightening among Asia’s major economies as risks to global growth threaten to undermine consumer demand. The Reserve Bank of India said lead indicators suggest growth moderated in advanced and emerging countries, and uncertainty about the resolution of Europe’s sovereign debt crisis increased.

In corporate news, Prada SpA raised about HK$16.7 billion (US$2.14 billion) after the Italian maker of Miu Miu bags sold shares in a Hong Kong initial public offering at the low end of a revised price range. The Milan-based luxury-goods company and Intesa Sanpaolo SA sold 423.3 million shares for HK$39.50 each. The sale gives Prada a market value of about 9 billion Euros ($12.8 billion), or 23 times 2011 earnings.

Other companies have struggled to obtain top valuations in Hong Kong amid a five-week slump in the Hang Seng Index. Samsonite International SA last week raised $1.25 billion in its IPO, after also selling the shares at the bottom of a revised range. The Massachusetts-based luggage maker dropped 7.7% yesterday, its first day of trading, from its initial public offering price of HK$14.50 as the benchmark Hang Seng Index fell 1.8%.

In Japan, Toyota Motor, who has been slowed by tight parts supplies since Japan’s record earthquake in March, said vehicle production at its North American plants is recovering faster than planned and will return to normal in September. Full output of eight models, including Camry and Corolla cars, Sienna minivans and Highlander sport-utility vehicles, was restored June 6, and Tundra and Tacoma pickups and RAV4 and Lexus RX SUVs will reach that level by September.

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