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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (138)	12/25/1997 4:10:00 PM
From: Zeev Hed	Respond to of 9980

Sankar: Maybe you can clarify something for us here in "asian ingnoramus land", I understand that Korea has implemented a "true name" policy in their banking system aimed at bringing to the fore a large portion of an undeground unreporting (and untaxed) economic activity. The new regulation has supposedly caused some $70 to $80 billion to go underground (and no longer depositited in flase name bank accounts). Are these reports correct? Does the sudden soaking of $70 Billion from the Korean economy have anything to do with the current shortage of foreign exchange in Korea and thus the rapid colapse of the won? And last are there similar sizeable underground economies in other asian countries? By the way, I can accept most of the tenets of your scenario, except the weakness in the dollar, if it comes it will be much later (maybe a year or so) after financial stability has returned to the rim. The weakness in the US dolar that ended about a year and half ago (when we hit 80 yean to the dollar) was IMHO the tail end of our own bank fiasco and the S&L debacle, which we solved by forcing massive closing of weak banks and S&L and writting off the losses. Once we did that, the table was clean for healthy economic development and the associated strenght of the dollar. Until the rim once again regain its economic footing (which I have no doubt it will), I think the dollar will further strengthen (to the dismay of our international corporations) and I actually see about 140 yen to the dollar before the middle of next year. TIA Zeev

To: Rational who wrote (138)	12/25/1997 7:36:00 PM
From: Stitch	Read Replies (1) \| Respond to of 9980

Sankar, <find it hard to believe that US companies own 60% of banking and insurance globally. I would like to have facts. But, my feeling is that they own virtually nothing in Asia or Africa and a trickle in Europe.> I can go back to recent news stories to validate the following if necessary but: recent relaxation in ownership laws in Malaysia were a part of the World Trade Organization's negotiations and subsequent ratification of new rules which occured in Geneva recently. These have resulted in the ability of overseas companies to hold up to 51% of Malaysian corporations. The interesting fallout was the questionable status of companies formed before the prior nationalistic laws ever went into effect, specifically American Insurance Assoc., (AIA) which held 100% of wholly owned subsidiary here. The question came up as to whether or not they would be forced to divest a per centage of the company to bring ownership into line with the newly agreed levels. Presumably they had escaped a retro enforcement up to this time. The locals (Anwar et. al.) were playing it cute in the press at my last reading. My point is that here is the largest local insurer 100% owned by an American company which sort of debunks your comment captioned above. I agree this is anecdotal and only one company. Best, Stitch