Asian markets bid fond farewell to profitable 1999

Asian markets bid fond farewell to profitable 1999

HONG KONG (Reuters): Asian asset markets came to a quiet close
on Thursday ahead of a widespread New Year break with traders and
investors sitting on comfortable gains for 1999.

Stock and bond markets in Japan, South Korea, Hong Kong,
Indonesia, the Philippines, Thailand, Taiwan and Singapore will
be closed on December 31 to give banks and brokerages enough time
to prepare for the millennium change.

In the currency market, banks will be operating in some of the
regionals on New Year's eve, but turnover is expected to be
minimal.

Whether stocks, bonds or currencies, Asian asset prices turned
in some extraordinary returns over the year.

In violence-wracked Indonesia, with its untried new
government, the stock market index closed the year up some 70
percent from where it stood at the end of 1998.

The local currency, the rupiah, gained a respectable 10
percent in value against the dollar during the year but more
importantly held mainly steady throughout a tumultuous 12 months.

Neighboring Singapore shook off any contagion concerns
investors had for the island republic when a huge surge of demand
for high technology companies helped boost the local Straits
Times index some 78 percent in 1999.

Again the stock gains came during a year when the local
currency was largely steady against the U.S. dollar.

Hong Kong, Asia's biggest share market outside Japan, saw its
own high tech investment frenzy push the Hang Seng index to an
all time record and gains of over 68 percent for the year.

Thanks to the pegged exchange rate, which stayed in place in
1999 despite intense speculation over its possible demise, these
gains flowed through directly to U.S. dollar investors.

Among major Asian markets this year it comes as no surprise to
learn that South Korea was the place to invest.

South Korean stocks ended trading for 1999 on Tuesday with the
main index, the KOSPI, trading on its highs for the year.

The composite index was up almost 83 percent from its 1998
close of 562.46, its recovery a reflection of the South Korean
economy's battle back from the effects of the 1997 Asian
financial crisis.

The first decade of the new millennium could bring the
realignment of regional powers and the first stages of a new
Asian common market, according to one top analyst.

Andy Xie, chief economist at Morgan Stanley Dean Witter said
the region's stability and prosperity has to come from a
condominium between China and Japan to lead the region.

"This sounds farfetched now....However, history eventually
moves forward on mutual interests rather than emotive prejudices.
A true partnership between China and Japan will likely take place
around 2010," Xie said.

Other regional realignments possible early next century are a
true detente between China and Taiwan and the reunification of
the two Koreas.

Lastly, Morgan Stanley's chief economist said he expects an
Asian Common Market will likely be formed around 2010.

"The condominium between China and Japan has to take place
before such an initiative can be substantive. This event will
signal the emergence of a unified East Asia in the next century,"
Xie said.