RI, Thai to lead Asian upturn: Mobius<\/p>\n
HONG KONG (Reuters): Indonesia and Thailand will lead the
\nrecovery of Asian stock markets spurred by domestic demand and
\nthe region's increasing exports to China, Templeton Emerging
\nMarkets Fund said on Thursday.<\/p>\n
\"We expect the recovery to come in the middle of next year. At
\nthe top, Indonesia and Thailand have the greatest potential for
\nbig increases,\" fund president Mark Mobius told a news
\nconference.<\/p>\n
Thailand's benchmark SET index has gained 23.47 percent so far
\nthis year. Jakarta's JSX has risen more than four percent.<\/p>\n
Mobius said the installation of Megawati Soekarnoputri as
\nIndonesia's president and the signing of a new set of economic
\nreforms agreed between the IMF and Jakarta have restored the
\nconfidence of foreign investors.<\/p>\n
He said recent reports of Indonesia pushing ahead with a
\nplanned 51 percent divestment in state-run PT Semen Gresik, the
\nnation's largest cement maker, to Mexican giant Cemex will
\nencourage investors to look towards Jakarta.<\/p>\n
\"The stimulus in Indonesia is also to come from domestic
\ndemand,\" Mobius said.<\/p>\n
Templeton Asian Development Equity Fund, which manages funds
\nworth $20 million, had as at end-July four percent of its
\nholdings in state-run telephone operator PT Telekomunikasi
\nIndonesia and another two percent in Indosat<\/p>\n
Rising home and car sales in Thailand were signs of
\nstrengthening domestic demand, Templeton said.<\/p>\n
Mobius said Thailand's state-owned banks would benefit from
\nthe creation of the Thai Asset Management Corp and help in
\nclearing bad loans from the banking system.<\/p>\n
But Mobius was less charitable towards Malaysia.<\/p>\n
\"We see some recovery, some changes with regards to reform,
\nbut we are still worried about the crony capitalism which may
\nstill be in play,\" he said.<\/p>\n
Malaysian markets have gained strength in recent weeks on
\nhopes reforms in the corporate sector will continue.<\/p>\n
\"We will like to see more reform before we become
\nenthusiastic. That's really the only thing that's holding it up,\"
\nthe president of the fund said.<\/p>\n
\"These (Asian) markets have really bombed out... It's really
\nbargain hunting time. There is a good opportunity here and we
\ndon't see why we shouldn't start now,\" Mobius said.<\/p>\n
Templeton said it expected Hong Kong's equity market to slowly
\ndislocate from U.S. benchmark indices.<\/p>\n
\"Hong Kong will begin to separate from the U.S. mainly because
\nof what's happening in China. Because of a pick-up in China, Hong
\nKong will begin to move up with that,\" Mobius said.<\/p>\n
Templeton forecast Hong Kong's economy to expand by between
\none and two percent in 2001.<\/p>\n
Hong's Kong's Cheung Kong, a flagship of tycoon Li Ka-shing,
\noccupied the top slot in Templeton's ADEF with five percent of
\nthe holdings invested in the property firm.<\/p>\n
Templeton expected China's economy to grow by seven percent
\nduring the current year but said the country's hard curency B-
\nshares were currently expensive.<\/p>",
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"sponsor": "Okusi Associates",
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