Good Morning America,
Looks like widespread government intervention in the markets will continue as Asia struggles with deflating markets and currencies:
To Wit:
Taiwan PM Siew: Will Take Necessary Steps To Stabilize Stks
Dow Jones Newswires
TAIPEI -- Taiwan's government will take necessary steps to stabilize the local stock market after the recent fall in the market, Premier Vincent Siew said Tuesday.
Speaking at a ceremony, Siew also pointed out that Taiwan's central bank will protect the local dollar and curb speculative activities in the currency market.
Tuesday, the Weighted Price Index of the Taiwan Stock Exchange closed at a near two-year low, with its key index plunging 215.02 points, or 3.3%, to 6,335.09, in line with the dramatic fall in the U.S. stock market overnight.
Volatile Mkts, Govt Intervention Raise Concern In HK
By KIRSTI HASTINGS
Dow Jones Newswires
HONG KONG -- The Hang Seng Index was rattled by the collapse of share prices worldwide, including a severe decline on Wall Street overnight, and news that Standard & Poor's had downgraded Hong Kong's sovereign rating.
But a wave of short-covering in the stock and stock futures market - some of it believed to have been generated by the government - kept the benchmark index from diving to new lows Tuesday and helped ease a fall in September Hang Seng Index futures.
The benchmark Hang Seng Index fell only 212.57 points, or 2.9%, to close at 7062.47 in a volatile session. It moved between 6982.43 and 7306.40 points Tuesday. The September Hang Seng futures contract closed at 6810, down 190 points, narrowing its even steeper discount from just a few days ago.
Analysts said Tuesday's market activity indicated the government seems to be winning its war against speculators, as open interest in the futures markets has been falling in the past few days. But many continue to criticize the government's intervention, saying Hong Kong markets are no longer free.
Late Tuesday afternoon, money market dealers said the overnight Hong Kong Interbank Offered Rate fell sharply to 6% from 19% earlier in the day amid signs of government intervention. Dealers said Hongkong & Shanghai Banking Corp. was pumping liquidity in the market on behalf of the government to drive rates lower and take pressure off the spot Hong Kong dollar and the local currency peg. Neither the quasi-central bank nor Hongkong Bank would comment on market activities.
Tokyo stocks withstood the onslaught of Wall Street's big sell-off as the Nikkei 225 average rebounded from early losses Tuesday to end 1.9% higher, aided by government pension-fund buying. Most other Asian equities markets were lower as the yen rose against the dollar.
Malaysia Limits Non-Resident Conversion Of MYR Into Dlrs
Dow Jones Newswires
KUALA LUMPUR -- Malaysia's central bank Tuesday confirmed suspicions that it would act to limit the conversion of Malaysian currency into dollars.
In a one-sentence statement, Bank Negara said: "With immediate effect, all conversion of ringgit balances in the external accounts of non-residents into foreign currencies are subject to Bank Negara's approval."
The measures are understood to restrict the flow of capital from the country to protect the ringgit from the impact of further interest rate cuts. Malaysia's leaders are pushing a softer monetary policy to jump-start the economy.
Meanwhile, Malaysian Prime Minister Mahathir Mohamad is likely to address the nation on his government's latest economic measures at around 0700 GMT (3:00 a.m. EDT) Tuesday, officials said.
Bank Negara, is holding a news conference at 0300 GMT to explain its latest measures.
On Monday, the Kuala Lumpur Stock Exchange effectively banned the trading of Malaysian shares outside the country, unless it's with the blessing of the stock exchange. Economists suggest the authorities are acting to prevent a bout of off-market selling if Malaysia indeed implements capital controls.
Singapore's UOB OTC Index -12% At 225.27 Pts
Dow Jones Newswires
SINGAPORE -- Singapore's UOB OTC Index, which tracks the over-the-counter market of mainly Malaysian shares, has plunged 13%, or 32.19 points, to 222.57 on panic selling by foreign funds, dealers said.
Malaysia's announcement earlier Tuesday on currency controls and the restrictions unveiled late Monday on stock transactions which effectively bans trading in its shares outside the country have fueled the sulfa, dealers said.
Malaysian Resources Bhd. skidded 4.5 cents to end at S$0.205 on volume of 16.4 million shares.
MBF Capital Bhd. lost 2.5 cents to S$0.125, with 14.4 million shares changing hands.
"There's a huge uncertainty over what's happening in Malaysia," said an institutional sales trader at a regional broking house. "There's absolutely no transparency," he added.
Malaysia's central bank Tuesday outlined capital controls limiting the transfer of ringgit to overseas accounts with immediate effect, while foreign banks are limited from getting ringgit loans within the country to finance their speculative positions. Bank Negara's permission is now needed for those capital movements to take place.
One of the capital curbs is investors bringing in foreign money is into Malaysia and converting it into ringgit for securities purchases need to hold onto those securities for at least a year before freely selling and repatriating the proceeds.
This in particular, dealers said, has rattled investors who were quickly trying to get their money out of Malaysian shares.
Also, the silence on the part of the Stock Exchange of Singapore has led to uncertainty.
"The silence of the SES is extremely damaging to the market. The fact that they have not said anything for one whole day tells that they can't come out and guarantee the interests of minority investors here,' said an institutional dealer with a major German brokerage here.
The UOB OTC Index ended 14%, or 35.01 points, lower to 219.75. |
