Indonesia, Korea, Thailand top value shar
RECOGNITION OF Thailand's great value share prices has put the country on a pedestal in terms of Asian funds. Despite holding its own in the region last year, the Thai market has far from stood out for foreign investors since the crisis of 1997. As a result, stocks have become very cheap for regional fund managers to take advantage of. ING Barings rate Thailand as the third-cheapest index in Asia after Indonesia and South Korea, with stock valuations close to historical lows. The company is advising clients to switch from Hong Kong to Thailand.
The Australian inbound tourism industry is enjoying success in the form of Chinese visitors, with arrivals expected to break the one million mark by 2010. Figures from the Bureau of Tourism show the number of Chinese arriving in Australia grew at an average annual rate of 32 per cent between 1989 and 1999. The Bureau predicts that if the trend continues, Chinese tourist numbers could reach one million in less than nine years.
Direct flights between Taiwan and China could begin operating soon. Taiwan has resisted easing restrictions on direct travel in the fear that the island will become too dependent on the mainland, while the Chinese are be worried that letting in Taiwan's China Airlines could boost the island's identity as a separate entity. With 3.6 million travellers crossing the strait every year, airlines will be keen to take up the opportunities offered by direct flights. Travellers currently have to stop on the way, primarily in Hong Kong or Macau.
* HONG KONG
A recent ruling by the Government to abolish minimum broker fees to keep the stock market competitive has been turned around by industry protests. The Hong Kong Stockbrokers' Association has said the change making it cheaper for investors to trade stocks by forcing brokers to compete for business by paring fees would have cost thousands of jobs. A final decision will be made by the Hong Kong Exchanges and Clearing Ltd's 15-member board, which will meet this month. Maintaining the minimum brokerage fee means it is cheaper to buy and sell shares in regional rival countries Singapore, Thailand and Australia.
Japanese investors are repatriating their money as a result of a decline in the yen. A loss was reversed when income from the sale of overseas assets was used to buy up home currency. Investors are getting a move on before the end of their fiscal year on 31 March. The yen sank to a three-year low of 135 late last month, but was recovered by the investors' currency movements.
* NORTH KOREA
North Korea has joined Iran and Iraq in condemning US President George W Bush for naming the three the "axis of evil." Bush says the three nations are threatening world peace by seeking to develop weapons of mass destruction. Hostilities between North Korea and the US deteriorated when Bush questioned whether the country's leader, Kim Jong II, was serious a bout improving relations with South Korea. The US Central Intelligence Agency semi-annual report said North Korea, Iran and Iraq have intensified efforts to improve or acquire biological or chemical weapons and long-range ballistic missiles.
In a bid to keep the flagging economy growing, Singapore's Deputy Prime Minister Lee Hsien Loong is encouraging the offering of tax incentives to start-ups, hastening asset sales and opening health care and education to competition. The country's economy shrank an estimated 2.2 per cent last year, and 25,000 people lost jobs as a result of plunging electronics exports. Lee, who heads a committee charged with "upgrading, transforming and revitalising" the country's economy, says Singapore has to move beyond its role as manufacturer of semiconductors, disk drives and other exports in order to provide jobs for its four million people.
* SOUTH KOREA
Interest rates in South Korea's central bank may be raised if consumer prices keep increasing. Last month, prices rose at the fastest pace in a year, the CPI rising 0.6 per cent from December. While overall inflation accelerated, core consumer prices, which exclude energy and most food costs, slowed in gains. There are mixed predictions on when, if at all, interest rates will rise. Recent weeks have seen bonds rise, which suggests investors are not concerned about an increase in rates. However, all indications appear to point towards continued elevation of prices, fuelled by an expected rebound in economic growth, which will force banks to focus on fighting inflation.
The island that is going through its worst recession on record has undergone a cabinet reshuffle in an attempt to revive the economy. The latest changes see International Commercial Bank of China chairman Lee Yungsan appointed Finance Minister, and Christine Tsung, president of China Airlines Co, as Economic Minister. President Chen Shui-bian said bringing successful corporate executives into the cabinet would inject strength into the government and boost Taiwan's economic outlook.