Seeker of Truth
05-31-2003, 11:50 PM
Balancing Risks And Returns In Asia
Analysts have begun to realize that Asia holds considerably more investment promise than other parts of the world
By Chrisopher Lingle
Sunday, Jun 01, 2003,Page 9
With so many uncertainties relating to rising public and private debt and terrorism and military reprisals, the global picture for economic growth has become increasingly murky. Among the wider imponderables are the effects of a spike in oil prices or a steep fall in the dollar or a stalled US economic recovery.
As investors scour the planet in search for a reasonable balance of risks and returns, attention is again focusing on Asian economies and stock markets. Many analysts have begun to observe that Asia, outside of Japan, holds considerably more promise than other parts of the world. A report prepared by J.P. Morgan estimates that economic growth in Asia will average 5.6 percent this year. The figures suggest that China will top the league with 7.5 percent, followed by South Korea at 6.2 percent and India at 5.8 percent. And it is expected that China's performance will help boost intraregional trade in such a manner that there is less dependence on export markets like North America and Europe.
Despite this rosy picture, Asia economies have shown a tendency of volatility arising from poorly planned expansion associated with excessive borrowing causing over-capacity and bubbles. Figures from Morgan Stanley Capital Index (MSCI) reveal much about the scale of the turmoil that hit much of East Asia in 1997 to 1998.
During that period, shares on Indonesia's market shed 90 percent of their value while those in Malaysia lost 74 percent. Stocks traded on Thailand's main indexes saw 73 percent go up in smoke while their counterparts in Singapore, the Philippines and South Korea lost from 56 percent to 67 percent. Even stocks traded in the safe haven of Hong Kong lost 51 percent of their market capitalization. Along with the collapse of capital markets, the unmanageable burden of US dollar-denominated debts caused banks and insurers to become insolvent while corporate empires disintegrated.
More @ taipeitimes.com (http://www.taipeitimes.com/News/edit/archives/2003/06/01/2003053537)
Analysts have begun to realize that Asia holds considerably more investment promise than other parts of the world
By Chrisopher Lingle
Sunday, Jun 01, 2003,Page 9
With so many uncertainties relating to rising public and private debt and terrorism and military reprisals, the global picture for economic growth has become increasingly murky. Among the wider imponderables are the effects of a spike in oil prices or a steep fall in the dollar or a stalled US economic recovery.
As investors scour the planet in search for a reasonable balance of risks and returns, attention is again focusing on Asian economies and stock markets. Many analysts have begun to observe that Asia, outside of Japan, holds considerably more promise than other parts of the world. A report prepared by J.P. Morgan estimates that economic growth in Asia will average 5.6 percent this year. The figures suggest that China will top the league with 7.5 percent, followed by South Korea at 6.2 percent and India at 5.8 percent. And it is expected that China's performance will help boost intraregional trade in such a manner that there is less dependence on export markets like North America and Europe.
Despite this rosy picture, Asia economies have shown a tendency of volatility arising from poorly planned expansion associated with excessive borrowing causing over-capacity and bubbles. Figures from Morgan Stanley Capital Index (MSCI) reveal much about the scale of the turmoil that hit much of East Asia in 1997 to 1998.
During that period, shares on Indonesia's market shed 90 percent of their value while those in Malaysia lost 74 percent. Stocks traded on Thailand's main indexes saw 73 percent go up in smoke while their counterparts in Singapore, the Philippines and South Korea lost from 56 percent to 67 percent. Even stocks traded in the safe haven of Hong Kong lost 51 percent of their market capitalization. Along with the collapse of capital markets, the unmanageable burden of US dollar-denominated debts caused banks and insurers to become insolvent while corporate empires disintegrated.
More @ taipeitimes.com (http://www.taipeitimes.com/News/edit/archives/2003/06/01/2003053537)