Local issues dominate Asian market<\/p>\n
HONG KONG (Reuters): Asian asset markets turned introspective
\non Tuesday, with investors taking leads from domestic factors
\nafter a mixed overnight session on Wall Street failed to give
\nclear direction.<\/p>\n
Benchmark equity indices in South Korea, Hong Kong and the
\nPhilippines moved higher, but sank to four-week lows in Japan.<\/p>\n
Indonesian assets were dogged by political risks, as critics
\nof President Abdurrahman Wahid or much more popularly called Gus
\nDur intensified calls for him to quit, and the corporate debt
\nwoes of the Sinar Mas group with its Asia Pulp and Paper unit
\nseemingly lumbering towards default.<\/p>\n
Japan's benchmark Nikkei 225 fell almost one percent as high-
\ntech manufacturers' stocks tumbled on weaker earnings outlooks
\nand kept the broader market under pressure.<\/p>\n
The U.S. dollar fell to one-month lows against the yen for the
\nsecond straight day as the Japanese currency benefited from
\nspeculation of local funds repatriating money ahead of the fiscal
\nyear-end in March.<\/p>\n
The debt problems at Indonesia's Asia Pulp and Paper (APP)
\ndominated the bond market as fears grew of a formal default by
\none of the group's operating units later this week, while
\npolitical risks added to the shadow cast over financial markets.<\/p>\n
As key politicians called for the start of impeachment
\nproceedings against Gus Dur, investors pondered whether PT Tjiwi
\nKimia would be able to make a coupon payment deadline on one of
\nthe two bonds that had interest due last Thursday.<\/p>\n
Analysts said complex structures put in place by the Group's
\nmanagement made it difficult to determine how quickly this might
\nlead to a group-wide default on its near $11 billion of debt.<\/p>\n
Complicating the outlook for creditors is that the government
\nwants APP parent, the troubled Sinar Mas Group conglomerate, to
\npledge APP as part of a guarantee of its $1.3 billion debts to
\nBank Internasional Indonesia (BII).<\/p>\n
Bonds in APP group companies have been marked down as low as
\n20 cents in the dollar by international investors who hold them,
\nin anticipation of a group-wide default.<\/p>\n
Stocks were not spared the fallout and the benchmark Jakarta
\nStock Exchange index sank some two percent.<\/p>\n
South Korea's benchmark stock index posted Asia's biggest
\npercentage gain on Tuesday after as financial issues rebounded
\ntowards the close.<\/p>\n
Institutions chased the market aggressively in a late bout of
\nbuying, backed by a bounce in futures, fund managers said.<\/p>\n
That offset falls for chipmakers after a drop of more than
\nfour percent in the U.S. semiconductors sub-index overnight, with
\nheavyweight Samsung Electronics struggling to keep its 20-day
\nmoving average of 200,000 won.<\/p>\n
The Kosdaq over-the-counter market, home to many high-tech
\nissues, finished up 2.24 percent at 79.72, a rise of 1.75 points.<\/p>\n
Taiwan stocks closed lower as disappointed investors sold
\nshares after the government failed to make an announcement about
\nresuming construction of a controversial nuclear power plant.<\/p>\n
\"The market will continue to face selling pressure in the
\nshort term if the power plant issue cannot be settled,\" said
\nJackie Hung, fund manager of Golden Dragon Fund for International
\nInvestment Trust.<\/p>\n
Taiwan media had said the government could make the
\nannouncement as early as Monday but the cabinet did not make any.<\/p>\n
However, deputies in Taiwan's anti-nuclear Democratic
\nProgressive Party (DPP) agreed on Monday to the resumption of
\nconstruction, raising hopes for an end to a bitter political
\nstand-off over the plant.<\/p>\n
Analysts say reversing the cabinet decision to scrap the plant
\nwould be a boost for the economy and a boon for the DPP in
\nparliamentary elections.<\/p>",
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