Asia Watch

By RAY HEATH
Updated:

 

BANK stocks were going in different directions in Asia's major markets today, but despite signs of stabilisation on Wall Street, broader prices drifted off. All the excitement in Hong Kong centred on the second-line banks after Singapore's No 1 banker DBS Group looked set to unleash a bid for Dao Heng Bank.

As Dao Heng was suspended pending an announcement, there was no impact on the Hang Seng index, which slipped back 10.51 to 12,191.59, hurt by weak property stocks.

In Tokyo doubts continued to build about the government's chances of floating a fund to buy up the bad loans of the big banks, and as the giant financial conglomerates fell back the Nikkei 225 dropped 221.49 points to 12,620.27.

Although the Singapore market was not impressed by the reported 70% premium price that DBS was prepared to pay for Dao Heng Bank, Hong Kong investors saw the move as a possible catalyst that could lead to a much-overdue rationalisation of the small banks sector.

Taiwan stocks were buoyed by telecommunications stocks after top operator Chunghwa Telecom hit its daily limit of 7% on reporting firm first-quarter sales. The Weighted Average rose 48.33 points to 5353.50, helped by a stronger performance by semiconductor stocks, but gains were capped by continuing net sales of Taiwan counters by international funds.

Telecoms stocks also put a floor under South Korea's Kospi, in trading that was subdued by uncertainty over the next moves from the US markets.

SK Telecom rose almost 3% as investors decided it had been oversold, but with foreign holders also bailing out of South Korea the Kospi fell 6.25 points to 491.21.

With most interest in Singapore centred on the frozen DBS Group's shares, the Straits Times index drifted off 5.73 points to 1589.22 as rival banks slid.

Stock of No 2 bank, OCBC, fell almost 2% on disappointment that plans to rebuild itself around its core assets appeared to be stalling as it missed a deadline for property sales. Investors were also absorbing the government's lowering of its estimate for gross domestic product growth from between 5% and 7% to between 3.5% and 5.5%.

Some early buying of blue-chip stocks, which have sunk by 15% in less than a week, fizzled out in Malaysia, leaving the Kuala Lumpur Composite down 2.51 points at 550.83.

Sydney stocks held on to early gains, despite a negative swing of the pendulum by News Corp stock, which had lost a 1% gain by midday.

Bank shares were mixed ahead of a state-of-the-economy speech from the Reserve Bank of Australia Governor as investors pondered whether recent weakness in business confidence would trigger another fall in interest rates, but the All Ordinaries index gained 11.1 points to 3169.6.

Thai stocks were barely ahead as an inquiry into the hidden wealth of Prime Minister Thaksin Shinawatra got under way in the Constitutional Court. The SET index edged up 0.01 points to 278.26.

Hopes that the International Monetary Fund team due to arrive in Indonesia would bring good news on loans helped the Jakarta Composite index to an early gain of 4.11 points to 366.38.

• Prices and indices in this report are from various sources and calculated at different times and may not always match those listed elsewhere on the site.

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