Speculative trading boosts JSX shares<\/p>\n
HONG KONG (Reuters): Political risk dominated Asia's smaller
\nasset markets on Tuesday, feeding a speculative equity rally in
\nIndonesia but sending Thai stocks sprawling, while takeover talks
\nlifted Seoul stocks to an eight-month high.<\/p>\n
Jakarta shares chalked up a fourth straight session of gains
\non hopes that an anticipated impeachment and removal from office
\nof President Abdurrahman Wahid would be positive, making the
\nmarket Asia's best performer over the past week.<\/p>\n
Jakarta stocks hit an 11-week high as investors snapped up
\nstocks from almost any sector on the eve of a parliamentary
\ndebate on the future of President Wahid, speculating that the
\nprospect of a change in leadership would boost markets.<\/p>\n
The Jakarta Composite Index jumped 3.5 percent on heavy
\nturnover of 1.02 trillion rupiah ($91 million).<\/p>\n
Dealers said trading was mostly by local players who
\nspeculated that parliament would push for a special session to
\nimpeach the struggling Wahid.<\/p>\n
The Indonesian parliament has censured Wahid twice over two
\nfinancial scandals. But attorney-general Marzuki Darusman on
\nMonday cleared him of any wrongdoing.<\/p>\n
But Thai stocks stumbled down 2.5 percent after Prime Minister
\nThaksin Shinawatra, backed by his cabinet, fired Bank of Thailand
\ngovernor Chatu Mongol Sonakul after he refused to bow to
\ngovernment demands for the central bank to change its policy of
\nholding interest rates at extremely low levels.<\/p>\n
Japan's key Nikkei 225 closed 0.26 percent higher to snap a
\nfive-day losing streak after a rebound in battered banking issues
\nsuch as Sumitomo Mitsui Banking Corp.<\/p>\n
The euro slipped against the yen on concerns about the
\nEuropean economy. The Japanese currency seesawed against the
\ndollar at around 121 yen in thin trade following market holidays
\nin the United States and Europe.<\/p>\n
Thailand's government fired central bank governor Chatu Mongol
\nSonakul after a public row over monetary policy, spooking the
\nstock market but boosting the baht on expectations of higher
\ninterest rates.<\/p>\n
A government spokesman told reporters the new central bank
\nchief would be Pridiyathorn Devakula, president of Thailand's
\nImport-Export Bank and a leading supporter of the argument that
\nhigher rates are needed to kick-start the economy.<\/p>\n
Chatu Mongol was well respected in international financial
\ncircles and analysts say his abrupt sacking raises doubts over
\ncentral bank independence.<\/p>\n
Many analysts say higher rates may well do the flagging economy
\nmore harm than good with individual banks themselves at
\nparticular risk because of the government's stated desire to see
\ndeposit rates hiked.<\/p>\n
The Thai banking sub-index ended down 4.6 percent.<\/p>\n
South Korea's benchmark stock index jumped 2.2 percent to
\nfinish at a new closing high for the year as mounting hopes for a
\npotential General Motors takeover of beleaguered Daewoo Motor
\nfired-up auto parts makers.<\/p>\n
GM's announcement it had agreed to begin formal negotiations
\nto acquire bankrupt Daewoo Motor pulled the market up further in
\nlate trade.<\/p>\n
The Korea Composite Stock Price Index (KOSPI) marked its
\nhighest finish since September 15, 2000.<\/p>",
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