Optimism increases for Far Eastern markets

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The Independent Online
Analysts were yesterday cautiously optimistic about the embattled south-east Asian stock markets, as last week's Far Eastern rally renewed hopes that the worst could be over.

But it was not all good news in the region. Indonesia continued to reel from weekend riots prompted by the economic turmoil. And, in Japan, the corporate racketeering scandal re-erupted with arrests at Nomura Securities, Japan's largest brokerage.

Analysts predicted the Tokyo stock market would today pick up the pace set on Friday, when the Nikkei surged 6 per cent to close just above 16,000, and were also optimistic about prospects for the rest of the region.

"The Nikkei average will move well above the 16,000 level but it will not go straight to 17,000," said Tetsuya Ishijima, strategist at Okasan Securities.

Kim Dae-jung, the president-elect in South Korea, was yesterday among the optimists in south-east Asia. He received a standing ovation as he vowed to lead Korea out of the financial crisis.

The president-elect said: "Trust me. I am ready to take on the problem. At first I was overawed but now I feel I can do it." Last month he voiced serious concerns about his country's prospects only days after being elected.

But analysts were yesterday careful to inject a note of caution into their forecasts.

"The [Malaysian ringgit] currency has yet to show signs of really stabilising," said Ken Loo, head of research at Amsteel Securities in Kuala Lumpur.

This cautionary note was echoed in Singapore, where Lee Hsien Loong, the deputy prime minister, warned yesterday that the forthcoming Singaporean budget would be tight.

Meanwhile in Japan, the corporate racketeering scandal re-emerged, with the arrests yesterday of two former executives of Nomura Securities and a government finance official. The three are charged with bribery.

Japanese press reported at the weekend that Nomura, which has only just re-commenced trading after a five-month ban for its involvement in the racketeering scandal, would today post its first ever quarterly loss.