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

To: Jack Clarke who wrote (966)	1/16/1998 7:28:00 AM
From: Thomas Haegin	Read Replies (5) \| Respond to of 9980

You should not look at the recent 7% runup per se, but look where the market cam fom since summer. The same goes for their currency. Things appear to be so bad right now, that the reasoning is more like "Can it get much worse?" now. I admit not having an answer to this question for now. I guess it problably could. In Indonesia, Suharto and his bunch should leave and open the way for a more pluralistic sharing of power. But it seems like the signals he sends out contradict each other every 12 or 24 hours. One thing's for sure: At 72 he will live less long than if he were still 45 only, hopefully <g>. Thread, please correct me if I got it wrong, Thomas

To: Jack Clarke who wrote (966)	1/16/1998 9:28:00 AM
From: Mohan Marette	Read Replies (3) \| Respond to of 9980

Hi Jack, please don't think I am trying to be condescending or anything, but you haven't heard of the Asian Contagion yet!To say the whole of South East Asia is going through a certain financial turmoil would be an understatement. As for the U.S economy being strong etc,I think it is because our economic fundamentals are strong, but this Asian thing may take out .5-1 % from our GDP. Now to respond to your comment about the 'worst fundamental valuations in history',I don't think so,at least not any more,I think by now we must have corrected this anomaly and the stock prices reflect it. Cheers

To: Jack Clarke who wrote (966)	1/16/1998 6:42:00 PM
From: Geoff Nunn	Read Replies (2) \| Respond to of 9980

I'd like someone to tell me if this seeming Indonesian contradiction has any logical explanation. Jack, The Indonesian stock market has fallen 78% in the past 12 months, measured in dollars, according yesterday's WSJ. This means that if you bought $1000 worth of rupiahs 1year ago and used the funds to buy stocks, and now you choose to liquidate your investment - selling your stocks and converting the rupiah proceeds back into dollars - you would have lost about 78% of your investment. Your $1000 original investment would today be worth only about $220. Measurement in dollars holds purchasing power (roughly) constant, and is recommended becaue of existing Indonesian inflation. Bottom line: Indonesian stocks have lost nearly 4/5 their value, measured in units of constant purchasing power. Measured in rupiahs, the decline in the Indonesian stock market was less severe, ( I unfortunately don't have the figure) Conceivably prices may even have risen last year, though I doubt it.. At any rate, measurement in rupiahs is very misleading because of inflation. Why is the Indonesian stock market up 7% this year? If the 7% increase is in rupiahs, then to some extent it may reflect inflation. Of course we should remember too, that a rising stock market doesn't necessarily signal a strong economy, but merely one that is exceeding investors' expections. It is perhaps noteworthy that some of the best gains in the U.S. stock market were enjoyed during the late 1930's when we were still in the Depression. Thanks for your many good posts. The ones I seem to remember best had to do with English. Geoff