In Hong Kong, police had to disperse rioting protesters outside one bank’s offices last Wednesday_Scenes of carnage in Asian markets

[link to www.sbpost.ie]


Scenes of carnage in Asian markets

Sunday, October 12, 2008 By Mairtin O’Riada in Beijing
Even for Asian investors who rode out the financial crisis of 1997, last week was one of pain and trauma without parallel.

In Hong Kong, investors burned by collapsing funds took to the streets in violent protest. The tiny city state of Singapore officially tipped into recession. In Jakarta, Indonesian authorities were forced to keep the markets closed for days after it haemorrhaged money in the first three days of the week.

Right across the region it was an epochal bloodletting, but the savagery was particularly brutal in Japan. Last Wednesday, the Nikkei Index fell by 9.6 per cent as fear of a looming recession took hold and traders began to panic. Analysts described the sheer drop as unprecedented, the biggest fall in decades.


But, just two days later, calamity struck again. Last Friday, the Nikkei finished the week down 24.3 per cent after another 9.3 per cent single-day drop. Earlier in the day, unlisted insurance company Yamato and real estate giant New City Residence Investment both filed for bankruptcy as credit dried up.

The chaos means the Nikkei has lost a quarter of its value over the last week, and now stands at a 20-year low. For Japanese observers, there was only one suitable reference point - the ‘Black Monday’ crash of 1987 that ripped the heart out of what was an economic powerhouse and dragged it into a recession from which it has never really emerged.

The new government of prime minister Taro Aso already has a two trillion yen stimulus package ready to roll out, but last Thursday, Aso called on lawmakers and the central bank to do more to stave off the economic gloom.

‘‘Honestly, this for us is beyond our imagination,” he reportedly told a budget committee meeting, before later telling journalists that his cabinet simply didn’t know what the long-term implications of the crisis would be for the country.

In Hong Kong, police had to disperse rioting protesters outside one bank’s offices last Wednesday as heavy losses wiped out months and even years of gains. The Hang Seng Index shed 7.2 per cent last Friday.

The Indian Sensex Index endured its worst week in history, losing 15.5 per cent over the five days of trading, and 7 per cent last Friday alone.

There were also heavy hits last Friday for South Korea’s Kospi (8.7 per cent),Shanghai’s Composite Index (3.6 per cent) and Thailand’s SET (4.1 per cent). In Australia, too, investors joined in the stampede to dump shares and liquidate their positions, leaving the S&P/ASX 200 down 8.3 per cent on the week’s final day of trading.