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

To: Mohan Marette who wrote (1816)	2/1/1998 8:55:00 AM
From: Jyoti sharma	Read Replies (1) \| Respond to of 9980

Mohan, I fully agree the crisis in Korea and Asia is far from over and things will get worse in the short term. Some how financial markets have an uncanny tendency of looking into the future. They are predicting worst is over in Korea and Thailand at least. Markets could be wrong. We will find out soon. IMO for investers here we should also take into account the currency under or over valuation. The boost we have seen in Asian investment returns this month have been magnified by currency adjustments. If Korean economic reforms really take place, the economy will boom two to three years down the road. For investors in Korea the best may yet to come. In the short term I am very cautious. There is some risk Korea, noticing the improvement in financial markets may not under take all the changes to put the country on sound footing. I am however keeping my MAKOX and KF inspite of the large gains. Best wishes Jyoti

To: Mohan Marette who wrote (1816)	2/1/1998 1:03:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Mohan, lets be accurate, as I read it Daewoo is selling 50% of their Motor division for $330 MM, not the whole company, and this division has about $3 billion in debts (which I presume will now be guarranteed by GM). Whether this is a bargain or not depends really on the assets that back these $3 billions in debt. I have no idea what the Motor division's balance sheet looks like, but if Daewoo is typical of the average chaebol and if a lot of their debt were dollar denominated prior to the won's swoon, I would not be surprised if GM might, for the time being, be paying a premium to net assets (at least until and if the won recovers). I presume that the deal might have had some other "covenants" which are not public as yet covering closing off some automotive excess capacity (on Samsung's back?). If memory serve, I read somewhere that the current world demand is foe about 30 MM units per year, but the capacity worldwide to produce those is more than twice this figure, and that is where the main problem resides. Zeev