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Just met the sales manager for Indonesia's largest polyester company ($2.2
billion revenue) - says the Western world has no idea of what's going on
there - that its gonna take a long time for things to be fixed - Suharto had
kept the lower income groups happy with subsidized edible oil, noodles &
rice prices; and the Generals happy with cushy "profit-sharing"
IMF changed that - people went crazy.
Japan's actually extending credit in Pac Rim to keep working capital finance
available and postponing older/senior debt. China is holding firm on
currency but drastically reducing internal credit supply and tightening
credit controls so that the weaker Chinese players fold... says if the HK$
or the Remnimbi are hit, its gonna set that region back by 5-6 years.
Everybody wants the US$. The expats are paid USD salaries at US $1= 4,500
rupiah (mkt price is 10,850) - says those numbers are not really accurate
coz nobody does trades at those numbers - just "bid/ask" or one minor trade
done here or there; internally prices have gone up but not by 300% and
everybody generally assumes that 4500 is fair market value.
He says he's never seen a run on banks like this one in Indonesia - long
lines at ATMs, the biggest bank folding (Chinese owned) - Chinese expats are
not yet back - new buildings frozen in mid-construction...
Here's today's headlines from indian newspapers...Indian market's
perceptions of gold/silver as a risk-hedge are playing out...
Gitanshu
>Business news from Indiaserver (10-06-98)
> * Yen's free fall could spark second Asia crisis
> * Sharp rise in bullion prices
> * Rupee crosses 42 mark
> * Smart recovery on BSE
> * Foreign banks register lower profits in 1996-97
>June 10, 1998
>Yen's free fall could spark second Asia crisis
>
> Asia seems headed for another round of economic uncertainty as the
> Japanese yen continues its downward plunge, threatening to halt the
> gradual export based recovery among Japan's major trading partners. A
> Japanese domestic dispute over how to handle the problem is
> aggravating regional woes. On Tuesday, for the second day in
> succession the Japanese yen closed below 140 to the U.S. dollar in
> Tokyo after reaching a new low of 141 in the morning trading. This has
> artificially boosted the Nikkei stock index for the day which closed
> at 15,530.17, a gain of 1.54 per cent over Monday's closing, mainly
> due to the rise in export oriented issues. That, however, means
> further jitters for Japan's Asian investment destinations and some
> already struggling economies. Japan accounts for roughly 60 per cent
> of regional trade. A weakening yen surely dampens the prospect for
> those Asian exporters which hoped to bypass reduced domestic
> purchasing power to try and reach the Japanese market through their
> export competitiveness helped by their own depreciated local currency
> values against the dollar.
>
>
>Sharp rise in bullion prices
>
> Silver prices zoomed up by Rs. 260 a kg and gold hardened by Rs. 70
> per ten gram on the bullion market on Tuesday due to firm global trend
> coupled with a sharp rise in dollar rate against the rupee. Ready silver
> (.999) opened smartly higher at Rs. 7,830 and shot up further to close
> at Rs. 7,865, showing a huge gain of Rs. 265 over the last close of
> Rs. 7,600. Standard gold, after a better start at Rs. 4,220, rose
further and finished at
> Rs. 4,230, displaying a smart rise of Rs. 70 over the last close of
> Rs. 4,160.
>
>Rupee crosses 42 mark
> RUPEE bears held at bay all through the previous week by sustained
> State Bank of India counter dollar selling succeeded in making deep
> inroads into the local unit's defence on Tuesday on the large public
> bank making a significant shift in its dollar selling strategy.
> The Indian rupee mired in self-doubt, set a fresh all time low at
> 42.23/25 against the dollar and showed signs of weakening further as
> there is little on the horizon to change the negative sentiment that
> currently dominates the market. It has now set fresh all time lows in
> ten of the last 20 trading days since the Pokhran II. It has suffered
> losses of almost 45 paise or little over one per cent since ending its
> trading session on Monday, while dropping about six per cent since May
> 12, the day sanctions over nuclear tests were imposed on India. ``It
> was the much awaited dip which came through in the absence of the
> 41.80 window of State Bank of India and it swiftly moved to 42.10
> before closing weaker at 42.23", said Mr. Moses Harding, chief dealer,
> IndusInd Bank. Probably, the market outlook may prefer a 42.10- 42.40
> range and any breach of 42.30 and up to 42.50 should bring in
> exporters to sell 6 to 12 months receivables. ``The market will be
> turning to the selling mood when we near 42.40 to 42.50 and the market
> is likely to be one way since importers have already covered their
> payables at 41.80 spot window of RBI," Mr. Harding added.
>
>Smart recovery on BSE
>
> Equities staged a smart recovery lifting the Sensex by over 51 points
> on the Bombay Stock Exchange on Tuesday following hectic bear covering
> and fresh buying by domestic institutions even as foreign funds
> remained absent. The recovery process, which began yesterday at the
> fag end of the session, progressed further as bears, who had sold
> heavily in the last few days, rushed to cover their short positions.
> BSE sensitive index, which dipped to the intra-day low of 3372.18 at the
outset, rallied smartly to close at
> 3468.07 against yesterday's close of 3416.73, netting a gain of 51.34
> points. The BSE-100 index lost 11.77 points to close at 1525.71
> against 1513.94.
>
>Govt will ensure Re stability: Sinha
>
> THE Government is keeping a close watch on the situation arising out
> of the recent depreciation of the currencies in South-East Asia and
> would be in a position to counter any attack on the Indian currency,
> the Finance Minister, Mr. Yashwant Sinha, has said.
>
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