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To: The Phoenix who wrote (32888)	2/2/1998 9:10:00 PM
From: Glenn D. Rudolph	Respond to of 61433

Asia's Markets Soar Regionwide On Efforts to Solve Local Crises By SHANTHI KALATHIL Staff Reporter of THE WALL STREET JOURNAL HONG KONG -- Asian markets roared back to life as investors reacted to last week's efforts to address some of the region's financial woes. The substantial rallies, which took some by surprise, hint at optimism returning to the region's battered bourses. But slowing economies are likely to continue to weigh on share prices in coming months, analysts warned. The key indexes jumped, with the exception of Seoul. Hong Kong's blue-chip Hang Seng Index leaped 14%, along with Jakarta and Singapore. Thailand rose 12% while Manila rose 10%. Markets in Tokyo, Sydney, Taipei and Wellington also gained, while Kuala Lumpur, Shanghai and Shenzhen were closed. Seoul's composite index dropped 4.6% on profit-taking after strong rises last week. A Well of Demand In some cases, pent-up demand after Lunar New Year and Islamic holidays last week caused markets to soar, since investors finally got a chance to react to the latest regional developments. In Jakarta, foreign investors cautiously gave the nod to last week's announcement of a program to correct the country's banking crisis. Investors also cheered Thailand's decision Friday to lift most remaining foreign-exchange controls. Wall Street and European markets also bolstered Asia's bourses. In Hong Kong, index stalwart HSBC Holdings PLC continued the rise it began in London last week. Analysts said that foreign investors were a large part of the buying in regional markets. Despite these factors, the strength of region's rallies surprised some. "I can probably explain half of [Hong Kong's rise] as basically just catching up with other Asian markets' after the Lunar New Year holiday, said Steven Thompson, chief analyst at Nikko Research Center Ltd. in Hong Kong, "but the other half is something of a mystery." Mr. Thompson said investors were snapping up Hong Kong's cheap blue-chip banking and property stocks. But, he warned, further selling might occur during the next round of corporate results in March, which is likely to be disappointing. The Brighter Side But confidence is returning slowly to Asian markets. Efforts by governments to restructure troubled finance sectors have helped, along with antsy overseas fund managers eager to begin reallocating funds to Asian markets. Despite the fall in Korea, some investors are finally beginning to think that the market may have seen the last of its recent lows, said Hugh Peyman, regional strategist for Dresdner Kleinwort Benson in Singapore. "The short-term problems are getting behind us in Korea, although there's still a huge amount of horrible corporate news to come," he says. Still, many noted that the rally was unlikely to be repeated in most markets this week, given the magnitude of the rises. "Obviously it's not sustainable; markets don't bounce this much and continue to hold" these levels, Mr. Peyman said. He added that profit-takers could push markets down. Problems Remain And not everyone is sanguine about the restructuring programs currently underway in places like Korea and Indonesia. In Korea, the market fell "when investors looked and realized the problems have not gone away," said Flavia Cheong, a fund manager at Abtrust Fund Managers (Singapore) Ltd. "The same thing is going to happen in the rest of Asia; after the good news has settled, investors will say, look, the problems are still here." Ms. Cheong and others point to a host of uncertainties in Indonesia. Investors still need to see concrete examples of the measures announced in last week's restructuring program, she said. Jakarta officials "say they are going to have banking reforms; we want to see them do it," Ms. Cheong said. Throughout the region, analysts are repeating a similar refrain. In the Philippines, "the fundamentals haven't changed. We're still expecting an economic slowdown this year, so this runup is likely to be unsustainable," said Raul Ruiz, research head at Sun Hung Kai Securities Philippines Inc. The Philippines expects a further decline in the economic growth rate this year because of the regional currency turmoil and the adverse effects of the El Nino weather pattern. Official forecasts point to a gross national product growth rate of 3% to 4% and gross domestic product growth rate of 2.4% to 3.5%. Last year, GNP grew 5.8% and GDP grew 5.1%. --Rexie Reyes in Manila contributed to this article.