Rating cut seen for Thailand, Malaysia<\/p>\n
NEW YORK (Reuter): Asian financial market turmoil would likely
\npull down the credit standing of Thailand, Malaysia and Korea,
\nsaid John Seel, Asia economist at Bear Stearns.<\/p>\n
In a tele-conference with investors, Seel, who is based in
\nHong Kong, said Thailand had not demonstrated an effective
\nresponse to its financial crisis and especially to its troubled
\nbanking sector.<\/p>\n
\"Thailand has not bottomed out,\" he said.<\/p>\n
Malaysia is also veering into deeper economic difficulty as
\nthe \"bad policy mix\" and sharp rhetoric of Prime Minister
\nMahathir Mohamad continued hurt investors' confidence, he said.<\/p>\n
Korea is currently stuck in a \"policy stalemate\" before the
\npresidential election in December, he said.<\/p>\n
The government appeared inclined to \"sacrifice sovereign
\nrating to prop up the banking sector,\" Seel said.<\/p>\n
In addition, the financial burdens of integrating North Korea
\nwith the South, if the unification scenario plays out in the next
\ntwo to three years, would shave another notch of credit stance
\nfor Korea, he noted.<\/p>\n
As a result, Seel said that these three countries have greater
\npotential of receiving a downgrade than Indonesia and the
\nPhilippines.<\/p>\n
The \"trigger point\" for turnaround in these once robust Asian
\neconomies is to identify the time when the governments of those
\ncountries adopt policies for long-term growth, not just short-
\nterm fixes, he said.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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