Guarded optimism in Asian markets ahead of APEC<\/p>\n
SINGAPORE (AFP): Guarded optimism prevails in Asian financial
\nmarkets before the APEC talks in Malaysia with currencies
\nexpected to stay stable, but analysts say regional stocks may
\nundergo a short-term correction.<\/p>\n
Political developments in Washington, a glimmer of hope in
\nrecession-hit Tokyo, falling interest rates all round and a
\nrescue for Brazil have calmed nerves in the run-up to the Asia-
\nPacific Economic Cooperation (APEC) jamboree.<\/p>\n
\"The recent recovery in Asian markets is real but a further
\nrally is not 100 percent certain,\" said Daniel Lian, head of
\nAsian markets research at ANZ Investment Bank in Singapore.<\/p>\n
\"Anticipate swings in market sentiment and be prepared for a
\ndownward correction. Stay invested and reap more handsome rewards
\nin the next two to three months,\" he said in a weekly advisory.<\/p>\n
The Dow Jones index closed the week 4.46 percent higher, while
\nthe dollar bounced back from recent weakness to close around 119
\nyen in New York late Friday.<\/p>\n
Asian shares continued surging early last week but profit-
\ntaking reined in the bull run toward the weekend. Currency
\ntrading was largely uneventful.<\/p>\n
\"As long as the dollar remains in the 115 to 120 yen range
\nmost of the regional currencies should be fairly stable,\" said
\nEddie Lee, regional economist with investment house Vickers
\nBallas.<\/p>\n
\"What's capping the dollar is the hope that the Japanese will
\ntake more measures to try to stimulate the economy, so we have a
\nsituation where traders are kind of cautious,\" he added.<\/p>\n
While there is some concern over Indonesia before this week's
\nlegislative meeting that will set the framework for next year's
\npresidential election, any unrest is expected to have a limited
\nimpact on the region, analysts said.<\/p>\n
In Malaysia the focus has shifted from street protests to a
\ncourtroom where ousted former deputy prime minister Anwar Ibrahim
\nis defending himself.<\/p>\n
Brazil, whose problems had spooked Washington, is now expected
\nto receive an international rescue package of up to US$35
\nbillion.<\/p>\n
\"Global markets remain benign, with the latest spurt
\nencouraged by the warm and cuddly feeling resulting from
\nexpectations of another Federal Reserve easing and talk of a new
\nG7 initiative,\" said Christopher Wood, a Hong Kong-based regional
\nanalyst for Spain's Santander Investment.<\/p>\n
U.S. President Bill Clinton, whose chances of impeachment have
\ndiminished after the strong showing by his Democratic party in
\nmid-term polls, is expected to unveil his plans to spur world
\ngrowth at the November 17-18 APEC summit in Kuala Lumpur.<\/p>\n
The summit will coincide with the next meeting of the U.S.
\nFederal Reserve's Open Market Committee, which is tipped to
\nfurther ease interest rates.<\/p>\n
Fed chairman Alan Greespan's remarks last week hinting that
\nfinancial markets were starting to stabilize boosted sentiment.<\/p>\n
Leaders of the Group of Seven (G7) industrial powers have
\ncalled for changes in the global financial structure and more
\ntransparency in the International Monetary Fund (IMF) while
\npumping more funds into the world's lender of last resort.<\/p>\n
In Japan economic planners, after months of grim forecasts,
\nsaid Friday they had spotted a glimmer of hope after the
\ngovernment announced bank reforms and stimulus measures. But they
\nwarned it may not be enough to end the recession.<\/p>\n
Barton Biggs, top global investment strategist at Morgan
\nStanley Dean Witter, said in a report that \"Japan could be the
\nnext great trade\" and cheap Tokyo stocks were ripe for the
\npicking.<\/p>\n
Lehman Brothers also called for overweighting Japanese banking
\nstocks.<\/p>\n
But Santander's Wood warned against complacency.<\/p>\n
\"The key trigger point for the global emerging market
\nuniverse, including Asia, remains Brazil. Investors would be
\nfoolish to assume that this country is past the crisis point,\" he
\nsaid.<\/p>\n
He said he remained bearish on Japan despite the growing
\nnumber of bullish forecasts. \"The credit crunch there will get
\nworse before it gets better,\" he said.<\/p>",
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