RPT-GLOBAL MARKETS-Asia stocks ease, China feels IPO pressure
* Asian stocks slip from 13-month highs on valuationworries
* China worries about growing queue of new share issues
* Dollar extends gains ahead of G-20, Fed (Repeats to more subscribers)
HONG KONG, Sept 21 (Reuters) - Asian stocks eased onMonday, pulling further away from 13-month highs hit last week,as investors worried prices may have raced too far ahead ofeconomic fundamentals, with shares in China feeling supplypressures ahead of a string of IPOs.
The U.S. dollar extended last week's gains with traderscovering their short positions ahead of this week's FederalReserve policy meeting and a Group of 20 summit.
Against a basket of currencies, the dollar's .DXY =USDrebound from a one-year low of 76.01 on Sept 17 helped pullgold XAU= from near 18-month highs. The yellow metal hasgained 16 percent so far in 2009 but has still failed to topits all-time peak of $1,030 an ounce struck last year.
Trade was sluggish and volumes are expected to be on thelower side in Asia with Japan shut until Thursday for holidays.Markets in Singapore, India, Indonesia, Malaysia and thePhilippines were also shut on Monday for holidays.
The MSCI index of Asia Pacific stocks traded outside Japan.MIAPJ0000PUS dipped 0.26 percent, after surging 80 percentsince mid-March when global markets started to rally on hopesthat the financial crisis had bottomed out.
This has taken price-earnings multiples on a 12-monthforward basis to above 15.2 times, near this year's high of15.5 struck in early August, according to data from globalestimates tracker Thomson Reuters I/B/E/S.
"Valuations are certainly more expensive than they havebeen, but we don't think alarmingly so," said Mark Konyn, whooversees about $11 billion as Asia-Pacific chief executive ofRCM, a unit of Allianz Global Investors.
"Investors have positioned themselves away from some of theChina themes and more to themes aimed at recovery in the U.S.,"he said.
U.S. markets ended modestly higher on Friday on optimismthat the global economic recovery will be strong enough toboost corporate profits and justify higher share valuations.[.N]
The U.S. Federal Reserve is expected to keep the benchmarkinterest rate unchanged in a range of zero to 0.25 percent atthe end of a two-day meeting on Wednesday as it waits to see ifa tentative recovery finds solid footing.
Primary debt dealers surveyed by Reuters expect the Fedwill not start raising rates until next year for fear ofderailing the recovery. Many see a one-in-five chance of a"double-dip" recession, in which an economy sinks back intorecession after a brief rebound. [FED/R]
Investors will also be eyeing a meeting of leaders from theGroup of 20 developed and emerging nations on Sept 24-25.
The leaders are expected to reiterate that economic supportmeasures will remain in place as long as needed, even as theylook beyond crisis fighting to issues such as bankers' bonuses,financial regulation and global trade imbalances.[ID:nN2074416]
CHINA EYES IPOs
Highlighting investor skittishness, shares in Shanghai.SSEC fell more than 3 percent by mid-morning on Monday asinvestors fretted about the prospect of a sharp increase inshares from upcoming IPOs and worried that recent gains may beoverdone.
Analysts said subscriptions for 10 companies to be listedon China's Nasdaq-style market to fund high-growth start-upshad come faster than expected and could lead to a mildconsolidation for the index. [ID:nSHA170979].
South Korean stocks also eased 0.3 percent after afour-session gaining streak with foreigners piling into thecountry's markets ahead of South Korea's upgrade to developedmarket status by FTSE effective Monday.
The Korea Composite Stock Price Index (KOSPI) wasmarginally lower after dropping as much as 0.5 percent in earlytrade.
Foreigners have been net buyers on all but two days thismonth, bringing in $4.9 billion in the last 11 sessions.
"Foreign investors' buying has slowed following theiraggressive accumulation of Seoul shares prior to South Korea'sofficial joining of the FTSE," said Chung Seung-jae, a marketanalyst at Mirae Asset Securities.
Still, valuations in Seoul look relatively attractive.
The KOSPI's price multiple based on 12-month forwardearnings estimates was about 9.7 as of Sept 18, compared withthe region's multiple of over 15 times.
"Buying... could pick up after third quarter earningsfigures if numbers come out strong," Chung added.
Australia's benchmark S&P/ASX 200 index .AXJO dropped 0.4percent, led lower by weak resources stocks which were in turndepressed by softer commodity prices.
Oil prices CLc1 eased below $72 a barrel as tradersbooked profits after a 5 percent rally last week. (Editing by Kim Coghill)
Source: Reuters
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