Asia share markets face volatile trading week

Asia share markets face volatile trading week

HONG KONG (Reuter): Asian shares face a volatile trading week,
with Hong Kong poised for further gains, some smaller markets
poised for technical recovery but the rest of the region on
tenterhooks about recent currency turmoil.

On Friday, the Philippine Central Bank halted a defense of the
peso's peg to the U.S. dollar while Indonesia further widened the
trading band for the rupiah.

Speculators and hedge funds remain active in the region.

Attention has now focussed on the Malaysian ringgit as a wave
of speculation that started with Thailand's July 2 float and
effective devaluation of the baht continued to roll throughout
Asia.

Although stock markets in Bangkok and Manila welcomed the
increased currency flexibility, the regional mood remains
uncertain while investors wait to see the effects of the new
currency regimes filter through a troubled economic landscape.

Sentiment remained weak among foreign investors, and regional
traders reported that net outflows continued unabated last week.

Little improvement is forecast next week, although Hong Kong
is expected to continue roaring ahead on post-handover optimism.

The territory returned to Chinese control on July 1.

In Tokyo, the stock market's key index should be trapped in a
narrow range this week, caught between two forces -- buying of
financially healthy blue-chip issues, especially high techs, and
the sell-off of shares in firms with financial problems, brokers
said.

On Friday, the 225-share Nikkei average finished at 19,875.49,
down 92.51 points from the close a week earlier.

Market strategists expect the Nikkei 225 index to trade
narrowly for the time being, as growing concerns about some
Japanese companies, including contractors, retailers and brokers,
weighed on the market.

In Hong Kong, share prices are expected to continue gaining on
follow-through buying after Friday's fresh record closing high,
brokers said.

Active futures buying lifted the Hang Seng index of blue chips
stocks 386.06 points to close at 15,225.29 on Friday, but the
longer term direction remained uncertain as the market waited for
government measures to rein in property prices.

In Taipei, Taiwan share prices are expected to follow their
recent bull runs and test new highs next week, but brokers said
investors would become cautious as the index moved towards heavy
9,600-point resistance.

The central bank's repeated issuances of negotiable
certificates of deposit, widely seen as an attempt to keep a lid
on the loose liquidity that many experts said was fueling the
stock rally, would add caution, brokers said.

In Bangkok, Thai stocks, which fell on profit-taking this
week, are expected to advance next week on more buying by
foreigners of large capitalized stocks, brokers said.

The Stock Exchange of Thailand (SET) index retreated 4.34
percent in the week to 628.55 points on Friday from a week ago.
It fell 3.20 percent from Thursday.

In Kuala Lumpur, Malaysian shares were expected to remain
volatile next week as southeast Asian currency turmoil and heavy
shorting by foreign investors influenced the market, analysts
said.

"It will still be very volatile, but I think it will not be as
volatile as this week," said Ang Kok Heng, general manager at TA
Asset Management.

The Composite Index of 100 large-capitalized stocks closed the
week 55.71 points or 5.19 percent lower on the week.

In Singapore, share prices will be dogged this week by worries
over the region's currencies woes with investors basically
shrugging off the budget speech by Finance Minister Richard Hu,
brokers said.

"I think it may be a variable week, but regional concern over
currencies will be more dominant in the Singapore market than the
budget," a broker said.

Speculation that the Malaysian ringgit will be targeted next
by speculators who forced the Thai and Philippine central banks
to devalue the baht and the peso, respectively, will dominate
early trading this week.

One broker said some investors may decide that some issues may
be ripe for bargain-hunting this week.

The 30-share Straits Times Industrials Index (STII) finished
on Friday 1.2 points down on the day at 1,967.14 compared with
the previous Friday's close of 1,985.94 points.

In Seoul, stocks are expected to fall next week with blue
chips consolidating further, brokers said.

Brokers said investors were tending to shun blue chips as
there were no signs of an economic turnaround in sight. They
forecast the index would move in a boxed range between 750 and
770. The composite stock index closed at 767.27, down 11.97
points or 1.54 percent from last Saturday's 779.24.

In Sydney, Australian shares are seen entering a sorting out
period with yield stocks, such as banks and insurers attracting
attention, while high price-earnings (P/E) shares may come under
pressure as investors look to signs of growth prospects.

The All Ordinaries index closed at 2,699.1, up 0.17 percent on
Friday but down 1.25 percent on the week, with most of the week's
fall due to a plunge in gold shares after bullion prices dropped.

In Wellington, the New Zealand share market was in fine shape
to climb higher after taking a breather last week following its
rise to a record high the previous week.

However, late on Friday, Reserve Bank Governor Don Brash said
monetary conditions were too loose and any upward rise in
interest rates could dampen the positive sentiment.

The barometer top 40 index closed 10 points lower for the week
at 2517.