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Asian markets seen

drifting in coming week

HONG KONG: Asian markets, with the exception of Tokyo, are expected to drift in the coming week because of the lack of pointers from the United States, brokers say.

The U.S. Federal Open Market Committee meets on Tuesday to discuss monetary policy, but economists believe that interest rates, which have a significant effect on Asian equity markets, will be left unchanged.

Also, Wall Street is unlikely to provide much direction as it struggles to cope with the stronger dollar, they said.

Tokyo shares, however, are expected to build on their powerful rise in the past week because of the favourable exchange rate, brokers said.

Following are the market highlights:

TOKYO: Many brokers believe that good sentiment in the Tokyo market will stay intact in the coming week.

This week, sharp rises in the dollar against the yen coupled with active buying by foreign investors gave shares a powerful boost. The Nikkei average jumped by 1,240.15 points, or 7.39 percent, to close at 18,032.49 on Friday.

"The market will take some time to consolidate at the 18,000 levels and then will test higher levels next week," said Yasuo Ueki, general manager at Nikko Securities.

HONG KONG: Hong Kong stocks are expected to drift lower in quiet range trading in the coming week with the market awaiting the U.S. Federal Open Market Committee meeting for directions, brokers said.

In the week just past, the blue-chip Hang Seng index lost 111.11 points or 1.23 percent to 8,895.82.

"The 8,850 level is critical, if the market sustains above that next week, it would set for a rebound," an analyst said on Friday. Otherwise, the next bottom was seen at 8,500, he added.

The weak local economy continued to depress market sentiment but traders could not completely rule out the chance that a possible U.S. interest rate cut next week might beef up stock prices.

BANGKOK: The Stock Exchange of Thailand index is expected to drift in dull trade in the coming week as a bearish mood persists, brokers said.

"I can't see any great change. It'll trade in this range until we see some concerted foreign buying," said a broker at Ekachart Finance and Securities.

Foreign investors were likely to await clear signals that Thailand's new government was serious about keeping inflation down before returning to the Thai bourse, he said.

The index is likely to move between 1,315 and 1,350 next week, brokers said. The SET index closed down 19.61 points, or 1.46 percent, lower at 1,320.91 on Friday. The index closed at 1,330.62 on Aug 11.

BOMBAY: Indian shares are expected to continue an uptrend in the coming week on buying by local and foreign investors, brokers said.

The 30-share Bombay Stock Exchange index rose 42 points over the previous week and closed on Thursday at 3,446.18 points. The bourse was closed on Friday for a Hindu festival.

"Foreign investors are active in A group shares and the average investor is unwilling to sell at the current levels," said dealer Mehul Patel at brokers Mukesh Babu.

"The index will rise another 30-40 points next week unless there is some adverse political news," he said.

COLOMBO: Sri Lanka stocks are expected to open firm on strong fundamentals, after a flat week when trading was hampered by low share liquidity, brokers said.

"Selected stocks offer good fundamental values which cannot be ignored," said Chaminda Perera of HDF Securities. "The main constraint is the lack of shares."

"Colombo is now trading at a price earnings ratio of 10.8 and nine on earnings forecasts for 1995 and 1996," he said.

During the week, the Colombo Stock Exchange all share index fell 6.46 points from 754.78 to 748.32.

JAKARTA: Brokers said it was possible Jakarta stocks would remain weak despite the ongoing reporting season.

One analyst said some funds would continue to cash out and divert money to Japan following the recent rises in the dollar against major currencies, including the yen.

"But the market will see some resistance around the 500-point level," the analyst said.

Another broker said the consumer and cement sectors still offered value despite recent rises but property and first line stocks could see extended pressure due to profit taking.

The composite index ended at 500.65 points on Friday compared with 519.18 the previous Friday.

KUALA LUMPUR: The market will focus on company earnings to help set its course in the coming week, traders said.

Barring earnings surprises, the key index is likely to move between 1,010 and 1,040 as sentiment remained largely weak after falling for most of the previous week, they said. "We may go for one to two weeks of consolidation," a dealer said.

The Kuala Lumpur Stock Exchange's Composite Index rose 8.39 points on Friday to 1,028.33, a loss of 26.10 points, or 2.48 percent, for the week.

MANILA: Philippine share prices are seen climbing in the coming week on the back of low interest rates, brokers said.

"Since interest rates will be unattractive to portfolio fund managers, we should see some gentle accumulation in the equities market," Archie Arambulo at Crosby Securities said.

Brokers, however, warned that continuing anxiety over weak first half earnings of blue-chip companies might still cast a pall over the market. They see the index moving between 2,800 to 2,900 points. The composite index closed at 2,840.41 points today from 2,874.17 on Aug 11.

SEOUL: Seoul stocks are seen remaining at current levels in the coming week, with the possibility of a rebound if corporate bond yields stabilise, brokers said.

"Until the corporate bond yield settles at around the 12 or 13 percent level, buying interest in the market won't be very high," said a Jardine Fleming broker.

A weakening Japanese yen hurt export-oriented blue chips and speculation on falling bond yields diverted interest from stocks. Three-year corporates closed at 12.43 percent from Thursday's 12.77. The composite index ended at 906.90, off 3.13 points from last Friday's 910.03.

SINGAPORE: Singapore shares are expected to firm slightly in the coming week on bargain hunting and with the entry of institutional funds, brokers said.

"Bargain hunting, which started yesterday, seems to be gathering momentum and likely to continue next week," an investment analyst at a foreign securities house said.

The 30-Share Straits Times Industrials Index finished Friday at 2,188.34, up 28.35 points from a week ago.

Some technical analysts say the market could see some consolidation before it breaks up above a band of resistance between 2,180 and 2,190. But others are more positive, suggesting prices will hold their current levels or move slightly higher next week after five days of gentle gains.

SYDNEY: The Australian share market is seen as firmer in the short term despite three consecutive days of losses.

The All Ordinaries index closed at 2,102.0 points, down 25.6 points over the week.

Brokers said that the lower finish to the week was due to Wall Street and a lack of clear direction in the local market.

"What direction we get from offshore will determine how our market goes next week," said Eric Gale of Ord Minnett.

The market was expected to firm depending on offshore moves. "We are still vulnerable to the U.S. results tonight (triple witching hour) but our market looks okay," said a Sydney broker.

TAIPEI: Taiwan share prices are expected to be volatile in the coming week amid uncertainties caused by the upcoming presidential elections in March, 1996, and China's attitute toward the island, brokers said.

The ruling Nationalist Party will hold its party congress next Tuesday and Wednesday and will likely announce its candidates for the presidential elections. "The ruling party is expected to nominate incumbent President Lee Teng-hui, but China may say something bad or take action against the nomination," said Allen Huang of National Securities.

On Friday, the index ended at 4,830.34 points, compared with 4,551.89 a week ago. A 4,500-5,200 range was seen for the coming week.

WELLINGTON: The New Zealand share market is seen meandering on much the same path it has taken in the past week, softening on light volume, brokers said.

The reporting season is in full swing and that is influencing individual stocks but the weakening currency and the lack of investor interest are the main influences.

The top 40 index closed just under 2,100 on Friday after starting the week 32 points higher.

Concern about weakness in the currency could prompt the Reserve Bank to tighten again as it did on August 11 and the resulting higher interest rates would further dampen equities, brokers said.-Reuter