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

To: Thomas Haegin who wrote (970)	1/16/1998 9:18:00 AM
From: Thomas Haegin	Respond to of 9980

Reposting some articles: On Thailand Siam Bank ------------------ Siam City Bank, central bank mull options Reuters Story - January 14, 1998 04:27 By James Mclean BANGKOK, Jan 14 (Reuters) - Thailand's central bank could take control of troubled Siam City Bank Plc later this year and possibly before March if the economy slides further into crisis, a senior bank executive said on Wednesday. Following the central bank's de facto takeover of fellow medium-sized commercial lender, Bangkok Metropolitan Bank Plc , local media say Siam City Bank could be next. A Bank of Thailand audit team began work in the bank earlier this week, the executive told Reuters. The move comes after Siam City Bank's original capital raising new share issue plan, which included selling a 10 percent stake to ING Groep NV of the Netherlands, floundered in December. "The Bank of Thailand sent their auditing team into our office already, since Monday, so I guess it will be a week or so before they can come up with any report," the executive said. "This Friday (for a central bank takeover) I don't think so. The end of the month is possible but I can't tell. It's a Bank of Thailand decision," he added. But the Bank of Thailand was expected to wait and see if a revised share issue plan would work, as long as the situation at Siam City Bank and the overall Thai economy did not deteriorate markedly, the executive said. "Internally it's very quiet now, and I'm referring to the situation with deposits," the executive said. "If things remain quiet then we might have up to March, but if we have a panic in the country then it's possible that confidence has to be restored," the executive said. Siam City Bank is the eighth largest of Thailand's 15 commercial banks. The sector has been hard hit by Thailand's severe economic crisis with several banks facing liquidity problems in the past six months. The central bank has a policy of not discussing possible enforced changes at commercial banks until such action had been taken, spokeswoman Duangmanee Vrongprathip said. Another central bank official said the audit was routine and had been scheduled well in advance. While the bank sector has been given until the end of March to enact capital raising plans some institutions may be forced to do so sooner, Duangmanee said. "It depends how crucial their (capital adequacy) ratio is. If it's closer to the limit then they should do it sooner," she added. Siam City Bank's revised share issue plan includes inviting international advisors to find buyers willing to take an unlimited stake in the bank, the executive said. "We will seek professional assistance from international investment houses to be our advisors and this plan will have no restriction on the amount of shares to which new shareholders can subscribe," he added. U.S. based investment firm J.P. Morgan had already been involved in exploratory talks but advisors had not yet been formally appointed, he said. But the country's crippling economic crisis made it unlikely the bank, which was bailed out by the central bank once before in the 1980s, would emerge unchanged, the executive said. The Bank of Thailand's lifeboat, the Financial Institutions Development Fund, remains the bank's largest shareholder with about nine percent. "(In three or four years) I can see it (Siam City Bank) will be like any other bank in any country which has this kind of crisis...I see a merger coming maybe with ailing banks or with a good bank," he said. The bank's shares were unchanged at 3.80 baht by the Thai stock market's midday close on Wednesday. ($1 = 56 baht)

To: Thomas Haegin who wrote (970)	1/16/1998 9:20:00 AM
From: Thomas Haegin	Respond to of 9980

Repost: Malaysia Negotiations with IMF IMF CHIEF, MALAYSIAN OFFICIALS ASSESS NATION'S FISCAL POLICIES Futures World News - January 15, 1998 12:16 Kuala Lumpur, Malaysia-Jan. 15-FWN/UPI--THE HEAD OF THE International Monetary Fund (IMF) arrived in Malaysia today, promising a full assessment of the country's fiscal and monetary policies before setting terms for any IMF assistance. IMF Managing Director Michel Camdessus met with Malaysian Deputy Prime Minister Anwar Ibrahim to discuss the Asian currency crisis and policies to rein in spending and restore the economy. "At the end of consultations, we will be able to pass a definitive judgment," Camdessus said. Earlier reports in Singapore had quoted Camdessus as saying Malaysia needed better economic policies. But the managing director, who flew in from Indonesia, denied implying Malaysia's strategies were inadequate. On the contrary, he said the IMF welcomed initiatives last year by Anwar, including deferring large-scale projects; cutting government expenditure by 18%; reducing loans; and extending loans to productive sectors. Camdessus said his discussions with Anwar covered the range of economic problems afflicting Asian currencies, especially their effect on South Korea and Indonesia. Malaysia's currency had depreciated by almost 96% last week--to 4.8800 ringgit against the U.S. dollar--but has since recovered moderately to 4.1800 ringgit. Camdessus is expected to call on Prime Minister Mahathir Mohamad Friday and meet with Treasury and Bank Negara (central bank) officials.

To: Thomas Haegin who wrote (970)	1/16/1998 9:29:00 AM
From: Thomas Haegin	Respond to of 9980

Repost on my baby: Russia: MOODY'S: OUTLOOK (FWIW) ------------------ MOODY'S: OUTLOOK DETERIORATES FOR RUSSIAN FEDERATION Futures World News - January 15, 1998 09:25 STOCK FINANCIAL CURRENCY ECONOMY V%FWN P%FWN New York-Jan. 15-FWN--MOODY'S INVESTORS SERVICE TODAY stated the outlook for Russia's country ceilings for foreign currency bonds and bank deposits has deteriorated over the course of the past several months. This is as a result of both short-term and more fundamental developments both globally and within Russia and in spite of several positive developments, Moody's said. The Russian economy seems to have finally stopped its decline and may achieve a modest rate of growth in 1998. Tight monetary policy has resulted in a significant decline in the rate of inflation, and the Russian Central Bank has introduced a series of measures to defend the trouble. Nevertheless, the inability of the federal government to close its large budgetary deficit continues to underline Russia's fragile fiscal position, said Moody's. The record on tax collection remains very poor. The tax system itself is clearly in need of reform, but the requisite sense of urgency is lacking both among government and parliament, said Moody's. Barter transactions and the shadow economy are not declining as quickly as expected, thus robbing public coffers of much needed revenues. Devolution of political power to Russian regions has effectively blocked major redistribution of revenues or revenue-sharing agreements in various fiscal categories. Government short-term borrowing on the domestic Treasury bill market has thus increased quickly. The volatility now besetting emerging capital markets has driven up interest rates and the costs of debt servicing, said Moody's. The fact that a sizable percentage of Treasury bills are held by non-residents accentuates current difficulties. Recourse by the Russian Federation, various Russian regions and Russian corporations to international capital markets is already evident and is bound to increase in the future. Moody's will continue to monitor closely the likelihood of a short-term liquidity crisis alongside the more broad, slowly developing macroeconomic improvement in Russia. --------------- George, in case you read this, I admit that I took partial profits on my TRF position based on the splendid past performance. Still holding on to the other half for either it goes to the moon or down to zero. No need to rush in at present, but the Russian system is more open than most in SEA. They have freedom of press and speech. This is major stuff. They have a good level of basis and higher education. I agree, crime is a problem, but I see this diminishing over the longer term. Thomas

To: Thomas Haegin who wrote (970)	1/16/1998 9:34:00 AM
From: Thomas Haegin	Respond to of 9980

Repost on Japan being more a problem than solution for SEA --------------- IIE'S BERGSTEN: JAPAN HUGE PART OF ASIA FINANCIAL WOES Futures World News - January 14, 1998 11:33 Washington-Jan. 14-FWN--ECONOMIC AND FINANCIAL market woes in Asia will likely continue in coming months with additional bankruptcies on the horizon, according to Fred Bergsten, director at the Institute for International Economics. Bergsten, during an interview on CNBC, also added that a sluggish and closed Japanese economy is an albatross hanging over its Asian neighbors. "I continue to believe that Japan is a huge part of the problem and not of the solution," Bergsten said. "That's why it will take many months before the region gets back on track. Until they get rolling forward, it will be hard for the others. They may even make it worse." The Japanese government, Bergsten said, needs to use available financial restructuring money in the right way. They need to allow weaker institutions to fail, he said. According to Bergsten, as Asia's economies slow sharply, there will be additional bankruptcies. It is "vastly premature to think we're out of the problem," although it is conceivable that Asia is past the worst point in its crisis, Bergsten said. "We may have hit the lows, but we're certainly not out of the woods," he said. One of the positive factors, he sees, is the likelihood Hong Kong will be able to maintain its peg to the U.S. dollar. The risks, Bergsten said, are very small that either Hong Kong or China will devalue their currencies. Meanwhile, a report surfaced today that the United States is working with other nations toward a meeting of the Group of Seven (G-7) and Russia to find ways of strengthening the international financial institution. One government source who refused to be identified said the meeting will likely take place in the next month or two and would also include nations from outside the G-7. In late February, the G-7 finance ministers convene in Birmingham, England. It is not clear whether the Clinton Administration is planning on expanding that meeting or holding a separate one. President Clinton, according to the report, will discuss the current Asian economic and financial market crisis when he delivers his State of the Union address Jan. 27. He will reportedly ask Congress to approve additional funding for the International Monetary Fund (IMF), which is working to restore stability to the Asian region.

To: Thomas Haegin who wrote (970)	1/16/1998 5:49:00 PM
From: yard_man	Read Replies (1) \| Respond to of 9980

Your answer is reasonably good. Also much volatility follows a crash. Should be expected. Perhaps next week some piece of good new will come out and the market will be down 10%? Won't suprise me if Suahrto is forced out. He should look at the bounce in Malaysia since Monday. Things haven't drastically improved there over the course of days. Asset prices only reflect economic conditions over larger periods of time and the coupling can be quite loose at times. Hence the crashes in SEA.