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Strategies & Market Trends : Asia Forum

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To: Thomas Haegin who wrote (3387)	5/6/1998 5:40:00 PM
From: Stitch	Read Replies (1) of 9980

Thomas, Indonesia is in an explosive situation and getting more and more volatile each day IMO. They have had 33% inflation over the last four months. The latest riots and student demonstrations were sparked by a raise in gasoline prices which result from the IMF mandated reforms. As government subsidies are removed (per these reforms) prices shoot upward, causing an anti-government backlash and violence aimed at the largely Chinese merchants. Compounding the problem is the 32% reduction in oil prices greatly affecting Indonesia's exports. One spot of violence is Medan, where a major port is located. The result is slowing shipments of palm oil and rubber. Bad news for a country desperately in need of the dollars that exports bring in. All this is likely one reason Asian stocks tanked over the last three days, a situation likely to continue. I think Zeev is right...the second wave melt down is happening, largely affected by the continuing saga in Japan. We can only speculate what the near term will bring as more reforms are enforced in Indonesia. Best, Stitch

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