Asia Watch

By THIS IS MONEY
Updated:

 

Bank of Scotland is believed to be pressing ahead with the sale of its Australian interest BankWest despite losing the recent battle for the NatWest group.

Shares in BankWest, which is 55% owned by BoS, jumped around 5% to a record high of $4.18 in Sydney on the sale buzz, with seven local and international banks reportedly expressing interest.

Local bancassurance group Colonial is considered the frontrunner, but international clearers Banque Nationale de Paris and Singapore's DBS are also believed to be among the field. The BoS started sounding out potential bidders for BankWest to help fund its bid for NatWest, acquired by its rival Royal Bank of Scotland.

A BankWest sale would result in a handy windfall for BoS, which paid A$950 million (£380 million) for 100% of BankWest in 1996, and then floated off a minority stake for A$416 million. At today's share price, the BoS stake is worth around A$1.1 billion, giving the bank a paper profit of more than A$660 million.

The gains for BankWest came amid a lacklustre Australian share market as the All Ordinaries slipped 14.4 points to 3102.7.

In company news, metals recycler Simsmetal extended its British interests, paying £31 million for metals group Philip Services. The company said that combined with its existing operations the acquisition will give it 20% of the British ferrous metals market.

In Hong Kong, the lack of an early announcement from Pacific Century Cyberworks on its expected bid for Cable & Wireless HKT saw shares in Richard Li's internet company fall almost 9%.

Rumours swept through the market on Monday that an announcement would be made Tuesday, but the only development on the deal was reports that Pacific was organising a $US10 billion bridging loan from a consortium of banks to fund the bid. Cable & Wireless HKT was also sharply lower, off more than 6% to HK$24.

On the wider market, investors took fright at new threats from China that it would attack Taiwan, sending the Hang Seng 390.30 points lower to 15,932.07.

Leading blue-chips such as Hutchison and Cheung Kong suffered in the sell-off, while China-linked red-chips and H-shares were sharply lower.

Tokyo shares opened firmer and then dipped into negative territory, with holidays on US markets adding to the sense of drift. The Nikkei 225 Average closed

153.17 off at 19,390.58.

Brokers said the market was apprehensive on the direction for US markets after sharp falls last Friday, while the unwinding of cross-shareholdings was also exerting downward pressure. Supporting the market, however, was bargain-hunting from the new investment trusts, while a weaker bias for the yen against the dollar was also a positive.

Sony hit a record high of 33,250 yen on hopes for the new generation PlayStation console, while software maker Square added another 6.5% after yesterday's announcement of an alliance with Disney.

Most markets drifted lower with a 2.8% fall in Thailand the biggest move, the SET falling through the 400-points level, off 11.68 to 396.67. Singapore's Straits Times continued its decline, slipping 42.62 to 2073.23.

Tensions with China saw Taiwan's Composite fall 180.74 to 9731.93, Malaysia's Composite was down 11.19 to 995.94, and Jakarta's Composite declined

6.14 to 586.84. Korea's Kospi staged a welcome rebound, up 5.53 to 850.85.

Most watched Money videos