Asian stocks may be weak, volatile<\/p>\n
HONG KONG (Reuter): Asian stocks are in a slump and little is
\nexpected to change in the coming week.<\/p>\n
Foreign investors said they were bailing out on an uncertain
\nU.S. interest rate outlook as better-performing Latin American
\nand European markets were winning the increasingly competitive
\nrace for the emerging market dollar, they said.<\/p>\n
\"I think Asia's just going to die a death, basically because
\nof interest rates in the States,\" said one regional trader.<\/p>\n
Asian stocks were suffering from expectations of another U.S.
\ninterest rate increase at a meeting of the U.S. Federal Reserve's
\npolicy-making committee in May.<\/p>\n
It could become the second U.S. rate rise this year.<\/p>\n
The only market of interest to investors, outside Japan, was
\nin Hong Kong where \"red chip\" stocks -- companies heavily exposed
\nto China -- continued to rally strongly.<\/p>\n
Due to its relatively good liquidity, Malaysia was considered
\nthe only viable alternative to Hong Kong. Manila was expected to
\ncontinue suffering from uncertainty surrounding its property
\nsector while Thailand dallied in the doldrums.<\/p>\n
In Hong Kong, stocks were likely to see more volatility early
\nin the week, then trend sideways in a cautious tracking of trends
\nin U.S. markets, brokers and analysts said.<\/p>\n
\"We remain very closely correlated to the long end of the U.S.
\nbond market,\" said Angus Steel, chief investment officer at
\nFortis Investments (Asia) Ltd.<\/p>\n
The Hang Seng Index closed 81.02 points, or 0.64 percent,
\nlower at 12,645.76 on Friday, near the day's low of 12,643.28.<\/p>\n
Turnover climbed to HK$15.15 billion. Hong Kong stock exchange
\nfigures showed Friday's turnover to be the fourth heaviest ever.<\/p>\n
The index gained 104.58 points or 0.83 percent on the week.<\/p>\n
Trading related to the expiry of the April Hang Seng Index
\nfutures contract on Tuesday could lift the index higher early in
\nthe week ahead, brokers said.<\/p>\n
In Tokyo, the stock market's benchmark index was likely to
\ntest 19,000 in the coming week on continued support from pension
\nfunds which have been buying actively.<\/p>\n
\"Bargain-hunting by pension funds as well as foreign investors
\nreshuffling their portfolios should support the Nikkei average in
\ntimes of weakness,\" Ken Ishikida, Sanyo Securities general
\nmanager, said. \"But the upside is heavy near the 19,000 line and
\nthe rise will be gradual.\"<\/p>\n
On Friday, the 225-share Nikkei average closed 85.21 points or
\n0.46 percent lower at 18,612.86. On the previous Friday it closed
\nat 18,352.14.<\/p>\n
The benchmark index rose about 1,000 points over the past two
\nweeks, boosted mostly by pension funds buying blue-chips.<\/p>\n
In Bangkok, the stock exchange Index was expected to fall in
\nthe week ahead as continued economic pessimism and expectations
\nof poor first quarter results from non-financial sectors damage
\nsentiment, analysts said.<\/p>\n
The index declined for a seventh straight session on Friday,
\nshedding 4.42 points to 684.00. The market lost 16.23 points, or
\n2.32 percent from the previous Friday, leaving it just above the
\nyear's low close of 676.65 recorded on March 6.<\/p>\n
Bank of Thailand monthly economic statistics released on
\nThursday suggested the economy was slowing and bank officials
\nacknowledged it would be hard to match even the 6.7 percent
\nrecorded in 1996, the slowest this decade, analysts said.<\/p>\n
\"It's gloomy and I don't see any good news on the horizon
\nyet,\" said one senior foreign analyst.<\/p>\n
In Kuala Lumpur, shares were expected to stay weak due to a
\nlack of institutional buying but any downside was likely to be
\nlimited, dealers and analysts said.<\/p>\n
\"The market will remain weak. It is almost bottoming out but
\nthere's no sign of buyers returning to the market,\" said Phua Lee
\nKerk, head of research at Jupiter Securities.<\/p>\n
Analysts said investors were still digesting the impact of the
\nrecent move by Malaysia's central bank to curb financing to the
\nproperty sector and for share purchases.<\/p>\n
At best, the benchmark Composite Index will trade between
\n1,100 and 1,120, Seow said. The index closed on Friday at
\n1,089.45, down 15.13 points or 1.37 percent for the week.<\/p>\n
In Manila, shares were expected to remain weak and volatile as
\nlingering fears about the property and banking sectors were
\nlikely to further rattle the bourse, traders said.<\/p>\n
\"More and more foreign investors are jumping into the
\nbandwagon that says the property sector remains vulnerable,\" said
\nRaul Ruiz, vice-president at Sun Hung Kai Securities.<\/p>\n
Traders said that if Philippine Long Distance Telephone Co
\nreported strong first quarter earnings results on Monday it could
\nprovide some cheer to a dull market.<\/p>\n
The main index ended sharply lower on Friday, dropping 33.96
\npoints to 2,872.37. Week-on-week, the index posted a steep
\ndecline of 72.61 points, or 2.53 percent, from 2,944.98.<\/p>\n
In Seoul, stocks are expected to rise early next week, helped
\nby institutional buying of blue chips ahead of Friday's expansion
\nof the foreign shareholding limit, brokers said.<\/p>\n
But the market is seen falling on Friday as institutions are
\nlikely to sell heavily to take profits, banking on the rise of
\nthe limit to 23 percent from the current 20 percent.<\/p>\n
\"In the past, institutions heavily sold on the day when the
\nceiling was raised. I see no exception for this time,\" said Park
\nByung-moon, head of research at LG Securities.<\/p>\n
The composite index closed at 699.76 on Saturday, down 0.89
\npoints from last Saturday's 700.65.<\/p>\n
In Sydney, shares were seen capturing further gains next week
\nas local investors sought out keenly valued blue chip stocks
\nafter the long weekend hiatus.<\/p>\n
The All Ordinaries index closed at 2,474.7, up 0.1 percent,
\nfrom Thursday and 1.3 percent over the week.<\/p>\n
Local stocks were seen as good buys with the firm tone likely
\nto hold on the basis of fundamentals rather than Wall Street's
\ngyrations, although positive U.S. sentiment would help.<\/p>\n
In Taipei, share prices are expected to be volatile next week
\nas the market now faces its six-year resistance at around 8,700
\npoints, brokers said.<\/p>\n
Several brokers said the 8,700 resistance level would be hard
\nto break through in the near term.<\/p>\n
But National Securities analyst Oliver Fang was more
\noptimistic.<\/p>\n
\"If the government makes no negative moves on recent stock
\nmarket gains, the index should go on its firming trend to test
\n8,800 or 8,900 next week,\" Fang said.<\/p>\n
On Saturday, the index ended up 7.53 points at a six-year
\nclosing high of 8,661.72. Saturday's close was up 4.33 percent
\nfrom 8,302.25 a week earlier.<\/p>",
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