Asian Recovery - 2nd wave bubble?

Henry C.K. Liu hliu at mindspring.com
Mon Apr 19 07:19:07 PDT 1999


Monday April 19 1999 SCMP

Hang Seng soars again to pass 13,000

SUZANNE HARRISON

Updated at 8.28pm HK Time:

An inflow of foreign money saw Hong Kong

stocks rocket past the 13,000-point level just

one trading day after breaking down the then

key resistance level of 12,000.

The benchmark Hang Seng Index soared to a

high of 13,079.50 in afternoon trade before

settling back to close at 12,766.44, up

276.14, or 2.21 per cent.

The push came as foreign money drove

markets all over Asia higher.

Turnover in Hong Kong was a massive

$14.75 billion, the highest since the

government's official intervention in the stock

and futures markets last August.

The index's surge to a 17-month high of

12,490.30 on Friday came a little early for

some market insiders. It was the highest level

since October, 1997.

Some analysts were surprised the index

pushed past 13,000 on Monday, but said the

buying came from European and US

institutions which did not want to miss the

rally.

''This is a liquidity-driven market and I think

people, mainly from overseas, have seen the

sentiment towards Asia improve and basically

they want to get in now,'' SG Securities head

of research Philip Mok said.

''The market tends to move away from

fundamentals ... and there's not much you

can do but join the party.''

Boosting the shares on Monday was market

heavyweight HSBC Holdings, which finished

1.08 per cent stronger to $280.00 after

reaching an all-time high of $284.00. It's

previous high was $279.00 in the summer of

1997.

Property stocks fared particularly well ahead

of the government's land auction on Tuesday.

Cheung Kong Holdings gained 2.60 per cent

to $69.00, with Sino Land closing up 6.84 per

cent to $4.82. Most Asian stock markets

surged Monday, with only Tokyo, where

prices slipped on jitters about earnings

prospects of hi-tech bucked the trend.

The Nikkei-225 average lost 177.37 points,

or 1.05 per cent, to close the day at

16,674.21.

Indonesian shares soared on a continued flow

of foreign funds into the market.

The Jakarta Stock Exchange's Composite

Index rose 6 per cent, or 28.615 points, to

close at 508.147.

In the Philippines, a series of measures

implemented by the central bank to

encourage bank lending propelled the main

index to its highest level in 20 months.

The 30-company Philippine Stocks Exchange

Index surged 122.34 points, or 5.5 per cent,

to 2,355.98 - its highest level since it reached

2,300.82 points on August 26, 1997.

The Philippine central bank's cut in its key

overnight rates Monday and the 1

percentage-point cut in the minimum liquidity

reserve requirement of commercial banks

Friday freed up billions of pesos in the

financial system.

South Korean shares also closed sharply

higher as investors bought blue-chip stocks on

news of the restructuring of the country's

biggest conglomerates.

Traders said Daewoo Group's plans to

announce its restructuring programme,

including the sale of some of its operations,

boosted the market. The Korea Composite

Stock Price Index rose 41.45 points, or 5.7

per cent, to 766.59.

In Singapore, share prices closed sharply

higher on huge liquidity inflows, traders said.

The Straits Times Index rose 4.1 per cent, or

72.39 points, to close at 1,842.31.

Malaysian shares closed higher as investors'

sentiment on the region's financial markets

turned positive. The benchmark Composite

Index closed at 615.42 points, up 16.01

points, or 2.7 per cent.

Australian shares closed higher, with the key

index rising to another all-time high following

strong gains in the resources and media

sectors. The All Ordinaries Index rose 13.3

points, or 0.4 per cent, to 3,113.1, eclipsing

the previous all-time closing high of 3099.8

set Friday.

Share prices in Taipei closed higher, too with

the market's key Weighted Stock Price Index

rose 41.68 points, or 0.5 per cent, to

7,623.18.

New Zealand share prices closed higher for

the fourth straight session. The benchmark

NZSE-40 Capital Index rose 7.03 points, or

0.3 per cent, to 2,212.81.

Thai share prices closed higher as foreign

cash continued to buoy the market despite

signs of some profit-taking. The SET index

rose 9.65 points, or 2.4 per cent, to 412.19.



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