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To: Gary R. Owens who wrote (14021)	7/1/1998 12:37:00 PM
From: Ahda	Respond to of 116770

Very good post thank you.

To: Gary R. Owens who wrote (14021)	7/1/1998 7:31:00 PM
From: goldsnow	Respond to of 116770

Dollar obsolete just as well? (-G-) Asia seen gettig cheaper funds.. dollar dominance on decline? Asia can expect cheaper funds post-EMU - Deutsche 05:31 a.m. Jul 01, 1998 Eastern By Raj Rajendran SINGAPORE, July 1 (Reuters) - Asia can look forward to cheaper funds from the post European Monetary Union (EMU) capital markets but will have to compete with borrowers from less risky regions, senior Deutsche Bank officials said on Wednesday. They said Europe was now wary of crisis-stricken Asia due to the stream of bad news from the region compared to high yield but less volatile areas such as Latin America and Eastern Europe. ''There is still some confidence in the (Asian) markets but it is getting shattered almost every week....we've got a tendency for bad news to come out almost every second day,'' said Wolfgang Matis, managing director of Deutsche Bank, Head of Fixed Income Trading and Head of Global Markets, Germany. Matis said the Eurobond market would, once settled, offer borrowers cheaper funds as liquidity was expected to grow significantly. He told reporters after a seminar to explain the impact of the EMU on Asia, that liquidity would grow as European governments and companies replaced local currency denominated bonds with the Euro. European capital and equity markets will trade in a single currency from 1 January, 1999 as shares and bonds are redenominated from local currencies to the Euro. Financial costs to non-EMU borrowers would also go down as fund managers restructure their portfolio in line with the new financial structure, Deutsche officials said. Ifty Islam, strategist, Global Markets Research, said pension funds, now obliged under local legislation to hold 80 percent of their monies in domestic currency denominated instruments, invest the remaining 20 percent mostly in EMU member countries. But with the advent of the Euro, 80 percent of funds will be invested within the EMU, and fund managers would be more receptive to investing outside Europe with their remaining 20 percent share, he said. ''That 20 percent he can now put anywhere. He can put it in Asia..the U.S.,'' Islam said. The Asian crisis would not have much impact on the European economy because less than 10 percent of its exports go to Asia, said Peter Cornelius, chief international economist at Deutsche Bank Research. ''The aggregate impact is expected to be limited to 0.3 percentage point,'' he said. Copyright 1998 Reuters Limited