Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: B Tate who wrote (2844)	4/3/1998 1:11:00 AM
From: B Tate	Read Replies (1) \| Respond to of 9980

If you all don't know it yet, Malaysia - KLSE is in another meltdown. Just checked the board and an example - Finance/Banks 2 up 59 down. This just two days after the much heralded consolidation of Local finance companies into the BIG 6. This is the third day in a row of all down markets here. Although it is very small volume for all three days, I think it shows the attitude of "the man in the street" so-to-speak. One anecdote from a conversation over a cup of coffee with one of KL's "power brokers" yesterday. An unnamed banker (president of one of the top five in Malaysia) borrowed US5M at 4.78%, then he turned and lent it to a friend at 7.5%. No problem right, a slam dunk for sure. One minor problem, the original note is in USD with an offshore bank. The note to his friend is in equivalent Ringgit. No problem - WRONG. The original note was in August from the offshore bank. Exchange rate at the time was ~ 2.5 - 2.6? Guess what the exchange rate today is, how about 3.76 and climbing. YUP the guy (bank) has lost 33.4% of his borrowed 'capital'. To make matters just slightly worse the friend used the 5M (roughly 12.5 B MR) to "invest" in the local stock market. I'm too tired to do the math but there can't be much more than 1M of the original 5M left. Bright side - ;-) the bank is still collecting the interest 2.72% annually. <g> first payment of principal is due May 1. All he could keep saying was "bro it aint the economy, its the exchange rate that's killing us." Over and over and over and over, he reiterated the same comment. Yo Stitch, think I'll go buy 10 lots of Public Bank, its down to 1.5 today <vbg> BTW it was NOT Public Bank that is referred above. PBB is a fairly good institution known for conservative banking practices. Best bt bt