World stock markets reacted with relief after hearing that Greenspan is actually thinking the Fed should not increase interest rates to fight the inflation that only the Fed sees. In fact, he conceded the Fed may actually have to cut rates to head off a looming recession.
The improved mood may also come from progress in reform of some countries' economic problems.
HONG KONG (September 7, 1998 08:37 a.m. EDT
nandotimes.com) -- Asian stock markets recorded
one big gain after another Friday, with traders
crediting everything from Japan's strengthening yen
to speculation about lower U.S. interest rates and
new market controls imposed by Malaysia and Hong
Kong.
In Japan, the yen climbed once again against the
U.S. currency, reaching a four-month high of 131.99
to the dollar. Japan's benchmark 225-issue Nikkei
Stock Average surged 747.15 points, or 5.32
percent, closing at 14,790.06.
As good as the Nikkei was, Hong Kong's benchmark
Hang Seng Index ended at a six-week high, finishing
up 7.9 percent to 8,076.76.
In Singapore, the Straits Times Index closed at
862.10, a 7 percent increase, its best performance
this year. In Thailand, the SET index surged 6 percent
to 220.56 points.
And in Malaysia, the Composite Index did the best of
all, closing 22.5 percent, or 81.62 points, higher at
445.06. Traders said the government was
manipulating the market.
Elsewhere in Asia, the markets finished 3.9 percent
higher in South Korea, 3 percent in Indonesia, 2.6
percent in Australia, 2.3 percent in the Philippines
and 0.67 percent in Taiwan, where the government
recently imposed new restrictions on the more
speculative types of trading.
Yun Sam-wee, an analyst at LG Securities Co. in
Seoul, said investors in South Korea, one of East
Asia's hardest-hit economies, were encouraged by
the new stability of Japan's yen and stock gains
across Asia, "which eased concerns over recent
instability in world financial markets."
Wall Street was closed Monday for the Labor Day
holiday. So traders will have to wait until Tuesday to
see whether Asia's advances affect the Dow Jones
industrial average.
The latest drop in the U.S. dollar's value against the
yen was tied to a hint Friday by Federal Reserve
chairman Alan Greenspan that American interest
rates may have to be cut to prevent a U.S. recession.
Lower interest rates tend to make a nation's currency
less attractive to investors.
A lower yen also benefits other Asian countries, by
lifting the pressure on their battered currencies, and
by making it easier for them to compete with
Japanese companies that are trying to export their
way out of Asia's crisis by shipping products to the
West.
Japanese stocks also rose on reports that a
compromise was being worked out between ruling
party and opposition lawmakers over efforts to
reform Japan's debt-ridden banks. Such a move
could benefit the rest of troubled Asia, given the big
role that Japan plays as the region's key lender.
New controls adopted in Hong Kong and Malaysia in
an effort to protect their markets also seemed to help
their bourses, even though the changes have been
criticized by free-market economists.
In Hong Kong, new measures were announced over
the weekend and Monday to strengthen the currency
board system and to reign in illegal speculation on
the territory's stock and futures markets. That
boosted bank liquidity, cut interest rates sharply, and
buoyed investors' confidence, analysts said.
Investors think "at least for the foreseeable future
interest rates will come down, and it will be more
difficult for speculators to attack the Hong Kong
dollar," said Percy Au-Young, sales director at DBS
Securities in Hong Kong.
In Malaysia, Prime Minister Mahathir Mohamad went
even further last week, adopting new measures
aimed at fixing his country's economy and firing a top
government official he assumed opposed them:
Deputy Prime Minister and Finance Minister Anwar
Ibrahim.
In one of Mahathir's measures, the Kuala Lumpur
Stock Exchange announced restrictions that
effectively ban trading in its shares outside the
country. The government also imposed currency
controls and decreed that investors cannot take
money out of Malaysia before September 1999.
By PRISCILLA CHEUNG, Associated Press
Writer
The strength in Far East is good news for GRNO because crude oil prices have been dropping like a rock all year. They have taken a little jump in the last couple days for technical reasons. A economically strong Asia has been the assumed engine for growth in oil consumption and since last Fall when the Far East economies crashed, world oil consumption has not kept up with supply.
oilworld.com
To see what options traders think, see Petroleum Futures.
oilworld.com
Oil is predicted to rise in a couple years.
oil-gasoline.com
An oil company CEO agrees.
global.forbes.com
The Department of Energy's Energy Information Administration forecasts, last modified last April, makes this statement.
Indeed, the IEO98 reference case projections for Asia adopt the widely held expectation that the recession
in that part of the world will not be protracted, and that by 2000 there will be a return to the strong economic
growth-and, as a result, strong growth in energy demand-that was expected before the crisis emerged.
eia.doe.gov
Growing use of cars in Red China may be a good place to start a waste oil recyling business.
Cars edge out popular bicycles
on streets of Beijing
Copyright c 1998 Nando.net
Copyright c 1998 AFP
BEIJING (September 7, 1998 10:37 a.m. EDT
nandotimes.com) - Encouraged by authorities
seeking to make Beijing a great modern capital, car
traffic is nudging aside the bicycles that used to hog
the city's streets.
Beijing, population 11 million, is already the top
Chinese city in terms of the number of motor vehicles
in circulation -- 1.4 million -- and is plagued by
chronic traffic jams.
The authorities have so far turned a deaf ear to
experts' proposals for curbs on vehicle use and
warnings about the effects of pollution.
"There is a systematic effort to favor cars and
discourage bicycles in Beijing because the
authorities want to present the image of a modern
city,'' said Jean-Francois Doublet, a researcher from
the University of Paris who has been studying urban
growth and car use in Beijing.
While separate routes are being assigned for
cyclists, dividers marking off bicycle lanes have
vanished from many streets in the past months,
making life difficult for the cyclists who have to dodge
motorized traffic.
Beijing has been expanding continuously in recent
years, with residents being pushed farther out into the
countryside. But public transport growth is woefully
lagging.
Trailers are grinding along more and more slowly and
the subway remains limited to a skeleton service of a
mere two lines.
The only relief for Beijing commuters are a minibus
network rivaling the normal bus routes and a taxi fleet
that would be the envy of any major capital,
numbering at least 70,000. But among these are
models known as "Miandi" -- loaf-shaped
bone-jerkers -- that are doomed to disappear next
year.
Beijing authorities not only favor cars, but are
sending a message that ''big is beautiful." In an effort
to control the burgeoning chaos, small-cylinder
vehicles have been told to stay off roads every other
day.
The result is a huge demand for the big cars although
the streets, despite all the repair work of recent
years, make up a mere 10 percent of Beijing's
surface area, against 20 percent in most European
cities.
Motorcycles are a rarity, their numbers strictly curbed
since 1985 under a draconian limit on license plates,
the aim being to avoid the fate that has befallen
Bangkok and Taipei.
"The motorbikes are dangerous and uncontrollable,
they cause pollution, they're noisy and lead to
accidents," said an official of the traffic bureau,
admitting however that roadbuilding has been
insufficient to take in the extra vehicular population.
Nearly 200,000 vehicle licenses are to be given out
this year in Beijing, which is seeing round-the-clock
road-expansion work, razing down whole
neighborhoods and traditional buildings.
A fourth ring road around Beijing is going up,
uprooting people who were engaged in peaceful
farming only a few years ago.
The downside is there for all to see: within a few
years, Beijing has become one of the most polluted
cities in the world. Authorities have cracked down on
unleaded fuel and imposed a series of anti-pollution
measures. But success has been patchy: it was
found in July that 55 percent of 17,000 drivers
ignored the rules.
By ELISABETH ZINGG, Reuters
Charles |
