Asian monies pare loss, SARS containment may buoy economies
Asian monies pare loss, SARS containment may buoy economies
Asian currencies pared losses on trader speculation the containment of the deadly SARS virus, which had prompted governments to slash growth forecasts and consumers to hold back on spending, will buoy economies.
The Singapore dollar was little changed at S$1.7308 against its U.S. counterpart after falling as much as 0.4 percent. The Thai baht held at 41.72 after sliding 0.3 percent, according to Bloomberg data. The regional currencies had fallen after U.S. President George W. Bush said he supports a "strong dollar".
The World Health Organization last week removed Singapore from its watch list for SARS-affected areas. Taiwan, which has the world's third-highest number of infections, reported four more cases of the disease, its fewest in almost a month.
"The worst is over for Asia in the sense that SARS has got better, so for the dollar to rally significantly in Asia is quite difficult," said Peter Soh, managing director of spot foreign exchange at DBS Group Holdings Ltd., Southeast Asia's biggest bank.
The South Korean won was little changed at 1,205.40 won after sliding as far as 1,210 won, according to Seoul Money Brokerage Services Ltd. The Philippine peso held at 53.25 peso. It was as weak as 53.34 peso, according to the Bankers Association of the Philippines.
The Taiwan dollar was at NT$34.699 from Friday's NT$34.712.
Overseas demand for Asian stocks also benefited regional currencies.
2. OIL 2 X 30
Oil, spurred by thin stocks, at 6 week high near $30
Oil, spurred by thin stocks, at 6-wk high near $30
U.S. oil prices climbed to a six-week high near US$30 a barrel on Monday as traders reacted to a stubborn deficit in U.S. stockpiles and a potential output cut from OPEC.
By London midday, U.S. crude futures were up 30 cents at $29.86 a barrel -- their highest level since April 22. Benchmark Brent crude gained 28 cents to $26.60 a barrel, just 50 cents away from a two-month peak.
Oil prices have rallied more than four percent since the middle of last week, when U.S. government data showed crude oil stockpiles were stuck 12 percent below last year's levels while gasoline tanks fell to a six percent deficit.
Coming in the week leading up to the start of the summer driving season, when U.S. demand for motor fuel peaks, dealers feared a potential price spike.
"With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness," said Barclays Capital analyst Kevin Norrish in a daily report.
3. STOCK 1 X 28
Jakarta Index hits 11-month high
Jakarta Stock Index rises to 11-month high, Telkom gains
Bloomberg Jakarta
Indonesian stocks rose, lifting the benchmark index to its highest in almost a year, after inflation in May eased to the lowest in 32 months, raising optimism the central bank will cut interest rates. PT Telekomunikasi Indonesia paced gains.
The Jakarta Composite Index climbed 10.948, or 2.2 percent, to 505.724, the highest since June 27, at the 4 p.m. market close in Jakarta. Two shares rose for every one that fell. The benchmark has gained 28.8 percent in dollar terms this year.
Lower rates would lower the discount rate factor, a tool used to value companies, raising their valuations, some analysts said. Companies are valued by calculating the present value of their future cash flow.
The low inflation would "give room to the central bank to further cut interest rates," said Erwan Teguh, an analyst at PT Danareksa Sekuritas. "Lower interest rates mean lower discount rates, thus the value of companies must rise".
Telkom rose Rp 275, or 5.9 percent, to Rp 4,950. Investors expect Telkom to post a higher profit this year, helped by a gain in the rupiah. Telkom pays for its equipment from overseas with U.S. dollars and receives its revenue from telephone services it provides in rupiah. Telkom also has dollar debts.
4. Salim 2 X 20
First Pacific Pangilinan dumps post, become CEO
First Pacific Pangilinan dumps post, becomes CEO
First Pacific Co. Chairman Manuel Pangilinan said he resigned his post to become chief executive officer (CEO) at the Hong Kong company, which controls the biggest Philippine phone operator and the world's largest instant-noodle maker PT Indofood Sukses Makmur.
Anthony Salim, a member of the founding family, will become non-executive chairman, Pangilinan said. The changes are part of rules implemented this year by the Hong Kong stock exchange, including appointing three independent non-executive directors, to make companies more transparent.
"This is something I welcome," Pangilinan said in a telephone interview. "I prefer not to be chairman, and I am more comfortable in managing the company. The new rules require that the roles of chairman and CEO must be divorced for better transparency and corporate governance."
Albert Del Rosario, Philippine ambassador to the U.S., and Robin Nicholson, special adviser to the board of directors at PCCW Ltd., were chosen as independent non-executive directors. Benny Santoso, commissioner of various Salim Group companies, was appointed the third non-executive director.
The moves come after Chief Operating Officer and Finance Director Michael Healy, and Ronald Brown, executive director and corporate secretary, left their positions at the end of April. They've also left the board, First Pacific said today.
Pangilinan will remain president of Philippine Long Distance Co. and chairman of Manila developer Metro Pacific Corp. -- Bloomberg