Asia watch

By THIS IS MONEY
Updated:

 

The prospect of legal action from shareholders seeking A$600m (£230m) in damages saw shares in Australian finance group AMP fall another 4% in Sydney today.

Last Friday (12 May) an Australian judge upheld the right of shareholders in failed Sydney insurer GIO to sue over advice given by the GIO board during last year's takeover by AMP.

GIO's board recommended against the AMP bid, at A$4.75 a share, only for massive losses from reinsurance to send the share price slumping below A$2.50 shortly afterwards, enabling AMP to move in at $2.75.

The GIO takeover, which saw AMP post a A$424m full-year loss, has continued to be a millstone around the company's neck, and is largely responsible for the underperformance of the group's shares.

AMP was down 33 cents to A$14.52, compared with the A$16 base price set in the 1998 demutualisation and float.

Also in Sydney, the chief executive of upand-coming business software firm Solution 6 announced his resignation after reports of previous drug convictions in the US.

Chris Tyler has been dogged in recent weeks by diclosures about his private life, such as a 10-year suspended sentence on a marijuana charge, and his role in the collapse of a former Canadian-listed firm Lessonware.

Solution 6 shares surged on the resignation news, up 23% to A$3.68.

The prospect of another US interest rate rise coming after tomorrow's meeting of the US Federal Reserve kept the region's investors cautious.

The All Ordinaries was up a modest three points to 3007, lifted only by gains for News Corporation and Telstra.

In Tokyo shares drifted lower as the market pondered the interest rate climate, the Nikkei 225 Average closing off 44.17 at 17,313.69.

Big technology players came in for much of the punishment, with Softbank down 6.9% and Kyocera, a manufacturer of ceramic housings for integrated circuits, falling 6%.

Honda's 14% fall in profit for the year to 31 March saw the shares drift lower, helped by a downgrade from Deutsche Securities. Other carmakers, with the exception of a 4.7% gain for Nissan, were also easier.

Going against the trend was computers firm NEC, up 2.5% after it said it returned to profit for the 1999 financial year.

Hong Kong opened firmer before moving into negative territory, the blue-chip Hang Seng 31.16 lower at 15,080.78 by the mid-session break.

Bank heavyweight HSBC fell through the HK$85 level in early trade, but recovered to trade unchanged at HK$85.25. While blue-chips succumbed to profit-taking, China plays firmed on renewed optimism over the country's likely accession to the World Trade Organisation.

Korea continued its slide, the Kospi off 2.7%, or 19.98 points, to 720.32 as institutions sold off telecoms and hi-tech counters. On the over-the-counter market Kosdaq the market index slumped more than 7% as investors dumped internet stocks.

Singapore's Straits Times was off 5.33 at 2021.32, Taiwan's Composite fell 53.59 to 8506.85, and Thailand's SET slipped 1.18 to 344.49.

Jakarta's Composite was down 12.19 to 514.68, and Malaysia's Composite was 2.29 lower at 910.37.

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