t36 Asian markets tonight.Here is my recent post on SI Intel:
207.183.153.93
To: +john defreitas (44803 )
From: +Tunica Albuginea Monday, Jan 12 1998 12:32AM EST
Reply # of 44814
John, all, Asia falling badly.Here is the latest. Keep in mind however that Merrill-Lynch says that the US market and Asian Markets are inversely correlated: in the past when one went up the other went down and vice versa. Recently when I looked for this correlation I thought I saw some.
I don't know why. One thought however is this (may be viewed as somewhat cynical); what is bad for Asia is good for America and what is good for Asia is bad for America? Think of it for a minute over a 20-year period.
If Asia tanks because they can't go deeper in debt then they will not be able to turn massively their factories to displace/undercut our products: short term good (though long term this may bring inflationary pressures.
Also when baby boomers Monday decide to buy, ask yourselves if they'll be happy with a 5.75% yearly bond return after the 20+% returns last year, or are they likely to prefer stocks which are slated to return about 8-9% this year? Even Intel according to Jubak @ Msft Network is slated to go up 10-13%. Barons has an article this week about this on baby boomers, their giant forthcoming savings in next few years, and the gist of the article was that they are not ready for Bonds and 5.75% ( 3.75% if you factor in inflation.).
So things may not be as gloomy a you think.
TA
Here is the latest:
BUSINESS 1/12/98
World Markets: Hong Kong stocks Down 11% At Midday
NEW York -(Dow Jones)- Hong Kong stocks ended the morning session down more
than 11% Monday as investors reacted negatively to a host of domestic and
overseas negative factors.
Elsewhere, Tokyo share prices were lower at midday Monday, following a
plunge in New York stocks Friday and increasing worries about the turmoil in
Asian markets. The dollar was higher against the mark in Asian trading.
Shares where lower in Singapore and higher in South Korea.
In Hong Kong, blue-chip Hang Seng index was down 985.51 points, or 11.1%,
to 7909.13 points, adding to Friday's 359.89-point tumble. The key indicator
has plunged 1860.57 points, or 17%, in the latest seven sessions, including
all six sessions so far this year.
Among reasons for the decline, traders cited sharply higher local interbank
rates after an interest-rate increase last Friday, an expected announcement
by Peregrine Investments Holdings Ltd. Monday afternoon that it will close
down and Friday's 222.20-point drop in the Dow Jones Industrial Average in
New York.
A Peregrine source said head of fixed income Andre Lee told staff that no
buyer had been found for the troubled investment bank and that it would have
to be liquidated.
Blue chips fell across the board, with the rate-sensitive property stocks
battered the most. China-related stocks were hit much harder than the overall
index.
"It's not very meaningful to look at charts or look at the fundamentals
now," said Eugene Law, research director of Lippo Securities Ltd., referring
that sentiment is overriding the market despite stocks having fallen to
attractive valuations.
In Tokyo, the blue-chip Nikkei 225 index was down 189.61 points, or 1.3%,
at 14805.49, adding to Friday's 24.08-point tumble.
"A sharp drop at the open is inevitable as foreigners are seen actively
selling blue chips," said Hirobumi Inomata, a branch manager at Izumi
Securities Co. "The Nikkei average is likely to find support around 14300, as
market participants would hope the government to take economic stimulus
measures at that low level."
Meanwhile, in early Asian trading, the dollar was at 132.12 yen, unchanged
from late Friday in New York. The U.S. currency also was trading at 1.8250
marks, up from 1.8225 marks in New York Friday.
Elsewhere, South Korean stocks were sharply higher at midday, boosted by
buying demand from both foreigners and local investors, analysts said.
The Korea Composite Stock Price index was up 10.47 points, or 2.4%, to
451.25. The index soared 26.78 points, or 6.5%, finishing Saturday's half-day
session at 440.78.
In Singapore, shares were sharply lower at midday, as continued
panic-selling is providing no respite from last week's dramatic sell-off.
At the end of the morning session, the benchmark Straits Times Industrials
index was 104.69 lower at 1071.66, breaching the 1100 level. Dealers say they
hope the index won't breach the psychologically important 1000 level.
In Mexico, the IPC index lost 289.44 points Friday to close at 4547.74.
Brazil's Bovespa index tumbled 539 points to 9118, while Argentina's Merval
index plunged 37.48 points, or 6%, to 589.44.
London's FT-SE 100 index closed down 98.8 points, or 1.9%, at 5138.3, after
edging up only 13 points Thursday.
In Paris, the CAC 40 index closed down 35.13 points, or 1.2%, at 2919.81
after losing 51.79 points Thursday.
Frankfurt's blue-chip DAX index closed floor trading down 110.29 points, or
2.5%, at 4236.94, extending Thursday's 44.31-point decline.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
BUSINESS 1/12/98
*Asian Turmoil* Hong Kong Investment Bank Poised To Collapse
Hong Kong's Peregrine Investments Holdings Ltd. will shut down nearly all
operations after failing to find a buyer, a source in the investment bank
said Monday.
The source said head of fixed income Andre Lee held a meeting earlier
Monday morning and made the announcement to staff, first that the fixed
income unit was shutting down and then that most of the investment bank's
units would do likewise. The source quoted him as saying the management
"weren't able to find a buyer for any portion of Peregrine. We're
liquidating."
Meanwhile, The International Monetary Fund has prepared a report that comes
close to acknowledging that its formula for reviving the Indonesian economy
hasn't worked, according to a source who said Sunday he has a copy of the new
internal document.
The source, a foreigner who declined to be named and who has been openly
critical of the IMF in the past, said that "Indonesia would have been better
off if the IMF never came here." He spoke to Dow Jones Newswires in Jakarta
on Sunday.
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