Foreign investment wave seen in Asia<\/p>\n
BANGKOK (Reuter): Two economists yesterday forecast a big new
\nwave of foreign investment funds into east and south east Asia
\nover the next 12 months that would lift the region's current
\nsluggish stock markets.<\/p>\n
Kenneth Courtis, chief economist of Deutsche Bank Capital
\nMarkets (Asia) Ltd, said Japan's near zero interest rates would
\nsqueeze funds out of the country into the rest of Asia in 1996 as
\nJapanese companies struggle with a bad debt crisis.<\/p>\n
He and his Bangkok Bank Plc counterpart, Nimit Nontapunthawat,
\ntold an economic forum that Thailand, Malaysia and Indonesia
\nwould be main beneficiaries of fresh direct investment from Japan
\nand European firms.<\/p>\n
Courtis also said he expects the dollar to appreciate to 110-
\n112 yen over the next 10-12 months from 101-102 now.<\/p>\n
The economist said he sees a downward trend for short-term
\nEuropean and U.S. interest rates next year as static European
\neconomies become more pronounced and Washington tries to keep the
\nU.S. economy robust during a presidential election year.<\/p>\n
Courtis said 1995 saw a previous correlation of stock prices
\nin the U.S. and emerging Asian markets broken.<\/p>\n
\"I think Asian stocks will outperform the rest of the world in
\n1996 just as they have underperformed in 1995,\" he said.<\/p>\n
Nimit of Bangkok Bank said that a still relatively strong yen
\nwill force Japan to further relocate its support industries to
\nsouth east Asia.<\/p>\n
Problems<\/p>\n
He said Thailand, Malaysia and Indonesia share problems of
\nhigh inflation and current account deficits but their high growth
\neconomies could easily help them ride out bumps.<\/p>\n
\"The three countries may differ in details but not in
\nsubstance,\" he said.<\/p>\n
Gross domestic products of Thailand, Malaysia and Indonesia
\nare projected to expand 8.6 percent, 9.0-10.0 percent and 7.8
\npercent, respectively.<\/p>\n
Nimit said although he expects the Thai current account
\ndeficit to widen to a six-year high of 7.8 percent of GDP in 1996
\nfrom a projected 7.5 percent this year, its position remains
\nstrong and healthy.<\/p>\n
Thai central bank officials said earlier about 79 percent of
\nThai imports, which rose nearly 30 percent this year, were
\ncapital goods and raw materials that would help boost Thai export
\ncompetitiveness.<\/p>\n
Nimit said he expects Thai machinery and equipment imports to
\nrise a healthy 18.5 percent next year, a figure he described as
\n\"very impressive and healthy for the economy.\"<\/p>\n
He said the main cornerstone of Thailand's growth is its
\nexports which have expanded 25-30 percent annually for nearly a
\ndecade.<\/p>\n
\"Total Thai exports double in size every three to four years,
\nand they are now bigger than those of India which has a much
\nlarger population,\" he said.<\/p>\n
He said Singapore, Malaysia and Thailand are quickly going hi-
\ntech with their electronic industries accounting, respectively,
\nfor 70, 50, and 25 percent of their overall exports.<\/p>\n
Nimit said the worsening Thai current account deficit could be
\nattributed to increased foreign exchange spending by a sharply
\nhigher number of middle class Thais making holiday trips abroad.<\/p>\n
He said Thailand's foreign currency reserves have also been
\ndrained by a lack of its own commercial shipping fleet. Only five
\nto seven percent of Thai imports and exports are carried by Thai
\nships.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/foreign-investment-wave-seen-in-asia-1447893297",
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