South East Asian markets crumble at weekend

South East Asian markets crumble at weekend

Kuala Lumpur: Major Southeast Asian stock markets fell for a third straight day on 14 December, capping a miserable week for investors as expectations of more writedowns due to the US subprime mortgage meltdown hurt share markets worldwide.

Asia’s markets have slid this week, unconvinced that a plan by the Federal Reserve and other global central banks to pump more money into credit markets will help thaw tightening credit conditions caused by the US subprime mortgage crisis.

A credit ratings downgrade for US banking giant Citigroup and warnings from Lehman Brothers about further write-downs due to the credit market crisis further sapped market confidence, particularly in bank stocks.

“Ultimately, credit is the key variable for the health of all economies," said CLSA strategist Christopher Wood.

“The reality for fund managers is that they are involved in financial markets, (and) financial accidents or financial crises can have serious short-to-medium term implications for stock markets," he added.

Losses in bank shares in Singapore, Malaysia and Indonesia helped send their stock exchanges down a third consecutive session.

In Singapore, the Straits Times Index dropped 0.4% to 3,466.38 points as its biggest banks went skidding. DBS Group Holdings fell 1% to S$20.40. UOB Ltd fell 0.5% to 19.70.

Singapore’s second-largest taxi operator SMRT gained 1.2% to S$1.67 after saying it will raise taxi fares from 21 December, four days after leading rival ComfortDelGro announced it would do the same.

In Malaysia, the benchmark Kuala Lumpur Composite Index slipped 0.5% to 1,403.41 points.

Biggest lender Maybank dropped 0.9% to 11.70 ringgit, while second-largest financial group Bumpiputra-Commerce Holdings Bhd fell 2.8% to 10.50 ringgit.

But Malaysian monopoly power distributor Tenaga Nasional added 0.5% to 9.40 ringgit after it said electricity demand may grow faster next year than forecast.

In Indonesia, shares lost 0.6% to 2,740.06 points. Shares of Indonesian bank PT Bank Danamon Tbk slid 3.6% to 8,100 rupiah while Bank Internasional Indonesia Tbk also fell, slipping 1.6% to 300 rupiah.

The main shareholder in both companies, Fullerton Financial Holdings, said it planned to merge the two lenders, to comply with Indonesian banking rules.

In Manila, shares fell 2.4% to 3,538.69 points, while Vietnamese stocks fell 0.9% to 922.09 points. Thailand’s composite SET index , which added 0.3% to 835.75 points at 0914 GMT, was the only gainer in the Southeast Asia region.