SE Asia stocks-Markets stage biggest falls since 1997 crisis

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Reuters
Tue Feb 27, 2007 11:11 PM ET

 By Wee Sui Lee
 SINGAPORE, Feb 28 (Reuters) - Most Southeast Asian stocks
suffered their biggest one-day declines since Asia's 1997
financial meltdown, as investors sold off shares in a panic,
following the slump in global markets.
 Singapore's benchmark Straits Times Index <.STI> fell 5.63
percent by 0341 GMT and Malaysian shares tumbled 5.95 percent.
 The Philippine index lost 7.3 percent, while Indonesian
stocks fell 3.22 percent. Thai shares were down 1.64 percent.
 Dealers said the selloff in Southeast Asian markets
followed a near 9-percent plunge in Chinese stocks on Tuesday
 "China's the culprit. We have a lot of listed Chinese
companies, so we're dependent on China," said a dealer with a
regional brokerage in Singapore.
 Singapore-listed Chinese companies -- which make up more
than 100 of about 700 listed firms on the city-state's bourse
-- sank sharply on Wednesday.
 Shipbuilding and repair firm Cosco Corp. ,
controlled by China's top shipping firm, plunged 8.9 percent,
which reduced its market cap to below US$ 4 billion.
 Several other big-cap China plays also fell more than 7
percent, including food groups People's Food  and Pine
Agritech . More than 20 small- and midcap China plays
fell between 10 and 19 percent.
 Dealers said the Singapore market was also rattled by the
slump in U.S. stocks on Tuesday, with the Dow Jones industrial
average <.DJI> in its worst slide since the aftermath of the
Sept. 11 attacks.
 Losses in Southeast Asia's largest and most liquid bourse
were led by DBS Group , Singapore's biggest bank,
which fell 6.2 percent, and United Overseas Bank , the
country's second-largest bank, which also tumbled 6.2 percent.
 Index heavyweight Singapore Telecommunications ,
Singapore's largest listed company, was down 5.5 percent.
 Genting International  sank 11 percent after
Singapore said the Malaysian gambling firm's successful bid to
build a casino in the city-state would not automatically
qualify it for a casino licence. Sister company Star Cruises
 also slumped 14.5 percent.
 Analysts have long warned of an imminent correction in
Southeast Asian markets, many of which have recorded record or
multi-year highs in the year to date.
 "Singpore has been at an all-time high, and there's the law
of gravity -- investors are getting nervous and are locking in
profits," said Winson Fong, who manages $2 billion as chief
investment officer at SG Asset Management in Singapore.
 "For the short-term, stocks which have gone up strongly
will see sharp corrections; investors will look at underlying
fundamentals before going in," Fong said.
 But other analysts said the selldown in the Singapore
market would be temporary.
 "We anticipate the market will recover from this selloff
within the next 10-15 trading days. Leading the resumption of
the rally would be the blue-chips," said OCBC analyst Ritesh
Menon in a research note, who added that his mid-year technical
target for the index is at 3,350.
 In Kuala Lumpur, Malaysian power utility Tenaga Nasional
Bhd  led losses, sinking 5.7 percent. Malayan Banking
, the nation's biggest lender, fell 5.4 percent.
 In Jakarta, Indonesia's largest telecommunications firm PT
Telekomunikasi Indonesia  fell 3.3 percent. PT Bank
Mandiri Tbk  lost 7.4 percent.
 In Bangkok, PTT PCL , Thailand's biggest energy
firm, fell 1.9 percent. Advanced Info Service PCL ,
Thailand's top mobile phone firm, slipped 2 percent.
 In Manila, PLDT , the Philippines' largest telecoms
group, fell 8.2 percent, and Ayala Land , the country's
top property developer, lost 6.1 percent.
(Additonal reporting by Doreen Siow and Jamie Lee)