Asian monies lower on Calpers news
Asian monies lower on Calpers news
Dow Jones, Singapore
A major U.S. pension fund's decision to pull its public
investments from four Southeast Asian countries continued to drag
down currencies in that region Friday, although analysts said the
market impact will probably be short lived.
In North Asia, the South Korean won and New Taiwan dollar also
weakened.
The US$150 billion California Public Employees' Retirement
System, or Calpers, Thursday blacklisted Indonesia, Thailand,
Malaysia and the Philippines, saying the countries didn't meet
new investment criteria.
The guidelines measure a number of financial and political
factors, including market regulation, trading liquidity and
government stability.
The respective currencies, excluding the ringgit which is
pegged at MYR3.80 to the dollar, were pulled lower as stock
prices tumbled for the second day in a row in Thailand, Malaysia
and the Philippines. Markets in Indonesia were closed for a
holiday.
While Calpers' total investment in the four countries is
relatively small - around $100 million - some analysts expressed
initial concern that the situation could become more serious if
other investors followed Calpers' lead.
That, however, doesn't appear to be the case, said Mansoor
Mohi-uddin, currency strategist at UBS Warburg.
"We think Calpers' decision is unlikely to lead to sustained
capital outflows from Southeast Asia," he said.
As a result, the U.S. dollar's rally against the baht, peso
and rupiah is likely to be sold off going forward, he said.
Other analysts said that with many of the Southeast Asian
stock markets posting double-digit gains so far this year,
investors used the Calpers news as an excuse to sell and take
some profits.
The baht was hit the hardest among the Asian currencies
Thursday, falling to its lowest level in eight trading sessions.
Late in Asia the dollar was quoted at 43.925 baht, up from 43.820
baht late Thursday.
The Stock Exchange of Thailand Index was down about 1.4
percent late Friday after closing down 3.8 percent a day earlier.
Against the peso, the dollar closed higher at 51.368 pesos on
the Philippine dealing system, compared with 51.300 pesos a day
earlier.
The 30-company Philippine Stock Exchange Index closed down 3.3
percent. Despite the fall, the main index is still up 20 percent
from its closing level at the end of 2001.
The South Korean was pulled lower by the yen's decline,
traders said.
The dollar ended at 1,322 won compared with 1,318.8 won at
Thursday's close and was trading at 134.24 yen late Friday.
Heavy sales in the Korea Stock Exchange by foreign investors
also weighed on the won. Foreigners sold a net 172.5 billion won
of stocks on the main bourse.
The New Taiwan dollar edged lower, but remained in a narrow
range with no news to drive trading, dealers said.
The U.S. dollar closed at NT$35.102, up slightly from
NT$35.097 late Thursday.
The Singapore dollar followed the yen's lead, losing ground
against the U.S. currency.
Late in Asian trading the U.S. dollar was quoted at S$1.8327,
up from S$1.8284 late Thursday.