Marubeni sees upside to Southeast Asian turmoil

Marubeni sees upside to Southeast Asian turmoil

TOKYO (Reuters): Recent currency and stock turmoil in Southeast Asian markets has created a good opportunity for firms looking to invest in infrastructure projects there, a senior official with trading firm Marubeni Corp says.

"As far as it goes for trading firms, a period like this one is a really good business chance, a time for making more specific choices about what we want to do," Akinori Seki, deputy executive officer of Marubeni's Corporate Strategies Department, told Reuters.

He said the situation from early July on, when the baht and other Asian currencies underwent an initial de-facto devaluation, had been in some ways an essential if painful adjustment, and added: "This is not necessarily a bad thing."

"Among other things, it showed that the idea of linking currencies to the U.S. dollar was no longer useful or practical, with local currencies becoming seriously overvalued, particularly against the yen, which was a bit strange when you looked at things from the viewpoint of economic fundamentals."

As a result, export competitiveness and volume both dropped, hitting highly export-dependent economies and setting the stage for the current turmoil and economic slump.

But the present situation was likely to make Asian countries take a harder look at how they manage their markets, including how fast they move with deregulation, as well as becoming more serious about reducing deficits.

"This adjustment is certainly very painful and will take time. We originally thought it would end within about two years but now think it may take longer, about two to three years. And for these countries to return to their pre-July condition may take four or five years altogether," Seki said.

Although a number of lingering uncertainties, including still- shaky Asian currencies and unclear political situations, may limit the taking on of new commitments for some time, Marubeni -- which has committed heavily to Indonesia and Thailand in the past -- has no plans to withdraw from the region, he said.

"We are also not contemplating a shift from Thailand and Indonesia to other Asian nations, he added.

Although there have been some postponements of large infrastructure projects by governments concerned about ballooning current account deficits, most notably Indonesia and Malaysia, Marubeni was not affected negatively by these because it was not committed to any canceled projects, Seki said.

Malaysia deferred projects worth US$19 billion and Indonesia has put projects worth $13 billion on hold.

"We did have several projects under discussion, and these discussions have been continuing," Seki said.

"Once conditions return to normal, there will be (strong) needs for infrastructure and energy. Even if the timing's a little bit off (now), we have to provide these. After all, the buying potential of the Asian market is still huge."

Marubeni is one of Japan's five largest general trading companies, and strong in machinery, industrial plants and chemicals.