Soeharto's statement boosts Asian markets

Soeharto's statement boosts Asian markets

HONG KONG (AP): From Jakarta to Tokyo, Asia's battered markets generally rose yesterday after Indonesian President Soeharto announced that he would institute reforms, call new elections and ultimately step down.

Nowhere was the reaction as strong as in beleaguered Indonesia. Although trading volume was low, the JSX Composite Index surged 24.90 points, or 6.4 percent, to 413.82 on Soeharto's announcement.

The Indonesian currency surged to 11,000 level against the U.S. dollar, almost unchanged from its close Monday, after recording a low of 16,000 against the dollar.

Currencies and stocks across the region fell sharply early yesterday as markets anticipated more trouble in the island nation. Panicky selling gripped the market in Jakarta, and Indonesia's woes dragged down many regional markets.

Soeharto told the nation yesterday that he would institute reforms and organize new elections, and that after those elections, he would not be a candidate to continue his 32 years in power. He did not give a timetable.

But traders said the announcement was enough to give hope that Indonesia could avoid a continuation of the violence that claimed 500 lives last week.

In Tokyo, the market found the news from Indonesia one of the few positives helping to counteract uncertainty over the Japanese economy and Asia's prospects.

The benchmark 225-issue Nikkei Stock Average climbed 167.18 points, or 1.08 percent, closing at 15,551.65 - the highest finish in more than two weeks. On Monday, the average had gained 141.61 points, or 0.93 percent.

Meanwhile, the U.S. dollar rose against the yen as demand for the American currency was spurred by lingering fears of further instability in Indonesia.

The dollar was quoted at 135.92 yen in late afternoon, up 0.62 yen from late Monday in Tokyo but below its late New York rate of 136.25 yen overnight.

In Seoul, the currency rose in response to the news.

On the Seoul Stock Exchange, the key Korea Composite Stock Price Index rose 3.53 points, or 0.9 percent, to 362.53.

In Bangkok, Thai share prices tumbled because of a sell-off in the banking sector as the central bank's takeover of seven finance companies raised fears that its crackdown on the industry is far from over.

The Stock Exchange of Thailand index plunged 10.75 points, or 3.0 percent, to 346.46.

In Manila, Philippine shares also closed sharply lower as investors unloaded their holdings.

The Philippine Stock Exchange Index of 30 selected issues fell 56.50 points, or 2.7 percent, to 2,068.91.

In Singapore, share prices also fell as a rally following Soeharto's speech failed to last. The benchmark Straits Times Industrial Index fell 13.12 points, or 1 percent, to 1,278.62.

In Hong Kong, share prices rebounded after Soeharto announced that he would step down following new elections in his country.

The Hang Seng Index rose 37.14 points, or 0.3 percent, closing at 9,449.11.

In Taipei, share prices closed slightly higher. The market's key Weighted Price Index edged up 1.38 points, or 0.02 percent, to 8,136.27.

In Wellington, New Zealand share prices closed lower. The NZSE-40 Capital Index fell 7.60, or 0.3 percent, to 2,212.82.

In Sydney, the Australian share market closed moderately higher, getting a boost in late trading when Soeharto said he won't stand at the country's next election. The key All Ordinaries Index rose 8.73 points, or 0.3 percent, to 2,742.0.

In Kuala Lumpur, the benchmark index rose after Soeharto's speech. The Composite Index rose 4.43 points, or 0.81 percent, to 554.42.