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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (14378)	6/12/2000 5:51:00 AM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Asia Markets-Tread water, Greenspan's speech eyed By Anchalee Koetsawang SINGAPORE, June 12 (Reuters) - Asian asset markets trod water on Monday as investors lacked incentives to push prices substantially in either direction amid a murky U.S. interest rate picture. The market is likely to look to various developments in the U.S. this week for clues on what direction the world's most important growth engine is heading toward, analysts said. No fewer than eight Federal Reserve officials are scheduled to speak this week, with their chairman Alan Greenspan set to give a speech on business data analysis on Tuesday. Analysts said although the U.S. inflation-friendly producer price data released on Friday soothed the market somewhat, the reprieve was brief. They expected the Asian markets to continue to consolidate while investors were still waiting for more evidence that the U.S. economy was slowing smoothly. "Our view on Asia is that the jury is still out on the Fed's rate outlook and the U.S economic growth outlook. In this kind of situation, it pays to be a bit cautious," said Rebecca Patterson, Asian market strategist at JP Morgan. INVESTORS CLING TO SIDELINES Regional markets were mostly flat to slightly higher as investors embraced a day trade mentality, not willing to commit funds on a more sustained basis, traders said. The Nikkei average <.N225> closed up 118.70 points or 0.70 percent at 16,980.61 -- its first rise in five trading days. The Hong Kong's Hang Seng index <.HSI> shuffled along, with some high tech stocks such as Cable & Wireless HKT <0008.HK>, and its prospective merger partner Pacific Century CyberWorks <1186.HK> outperforming the market. Cable & Wireless HKT was up 3.04 percent at HK$18.65 and PCCW ended 4.89 percent higher at HK$16.10. The market expected the former's shareholders to approve the merger on Tuesday. Banks and finance stocks were mostly lower due to poor business prospects. SG Securities maintained its underweight view on Hong Kong's banking sector. "After the crisis, many bankers were convinced that focus on consumer banking would lead to higher yield and stable growth, offsetting the impact from sluggish commercial lending," SG Securities said in a report on Monday. "However, the slowing pace in mortgage loan growth has dented such hopes. Going forward, we believe high real interest rates and a sharp rise in capital gearing will constrain household borrowing propensity," it said. THAI RATING UPGRADE LOOMING? Thai stocks and the baht gained some ground in late trade but the overall mood remained glum, traders said. Investor's sentiment was dampened by talk that the country's sovereign rating might not be upgraded to an investment grade by Moody's Investors Service. Tom Byrne, a New York-based member of Moody's sovereign debt rating group, said his rating agency would take weeks to conclude a review of the rating after its officials visited Thailand's recently. He did not say when the result would be announced. There has been talk that the agency might not upgrade Thailand from Ba1 long-term sovereign rating due to concerns over the country's rising public debt. Analysts were divided whether Thailand deserved an upgrade. Graham Parry, Southeast Asia economist at Lehman Brothers in Tokyo, said it might be too early for Moody's to lift Thailand to investment grade. "What we are seeing there is strong cyclical recovery. But structurally, there are still some large question marks which could probably mean that Moody's will hold off upgrading Thailand's credit ratings to investment status," he said. "The non-performing loans are still far too high. The other factors that Moody's will be considering is the high level of public debt. We expect the public debt to reach 70 percent of GDP this year, which is another key vulnerability for the economy going forward," he told Reuters Television. But some begged to differ. Dominique Dwor-Frecaut, director of Asia study at Barclays Capitals, said compared with the Philippines, which was also one notch below Moody's investment grade, Thailand was in a much better shape. "Yes, NPLs in Thailand are high, but they are declining. Prospects for growth might not be fantastic and the structural reform is lacking," she said. "But I think Thailand overall has a much stronger credit than the Philippines and therefore it should be upgraded one notch," she said.