SINGAPORE, March 5 (UPI) -- Most Asian stock markets posted gains this week, apart from Hong Kong and Thailand, which suffered from profit-taking.
Monday's rally in U.S. markets, buoyed by ISM numbers for manufacturing which comfortably held above 60 signalling economic expansion, set a strong tone early on in Asia. However, the fall in the Institute of Supply Management's services index in February disappointed investors pointing to a slowdown of sorts that month.
By the end of the week, profit-taking set in with many investors awaiting Friday's U.S. employment numbers. While a weak number would be some cause for concern, a strong figure could also lead the Fed to conclude that interest rates really are too low. Federal Reserve chairman Alan Greenspan already commented this week that interest rates would have to rise to a more neutral state.
Sentiment in the tech sector was further dented at the end of the week by Intel Corp. lowering the midpoint of its quarterly revenue forecast by $100 million and missing Wall Street expectations.
Among the worst performer this week, Thailand lost 2.2 percent with the SET index closing Thursday at 700.50. The market was closed Friday for public holiday.
Investor sentiment was undermined by Merrill Lynch's downgrade of Thailand's weighting to neutral from overweight, saying Thai equities had run their course near term.
Prime Minister Thaksin Shinawatra's calls for the cancellation of a share swap deal between state-owned Electricity Generating Authority of Thailand and coal mining firm Banpu added to the bearish sentiment.
Even Fitch Ratings raising the outlook on the country's long-term foreign currency sovereign ratings failed to excite investors.
Profit-taking hit companies that had posted 2003 results in line with expectations.
Construction contractor Italian-Thai Development feel sharply as investors worried the company's share sale plan triggered will dilute shares.
KOREA
The market posted strong gains this week supported by interest in tech shares, which rose in tandem with their U.S. peers. The benchmark Korea Composite Stock Price Index (KOSPI) closed Friday at 905.38, just off a 22-month high, but still up 2.5 percent on the week.
There was also good news on the economic front, with exports up 46 percent in February on the back of strong chip sales, while a separate business survey showed the overall business outlook was expected to improve in the second quarter of 2004. February inflation data also show price pressures remained under control.
Speculations about consolidation in the financial sector lend support, with LG Card, the largest credit card issuer in South Korea, the focus of takeover gossips. Shinhan Financial Group also posted strong gains after its banking unit said it had sold 10.1 percent of shares in parent Shinhan Group to unspecified investors.
Electric power company KEPCO also attracted interest after announcing high dividends.
TAIWAN
The TAIEX closed Friday at 6,943.68, unable to hold on previous gains, but still up 2.8 percent on the week. On Thursday, the index had reached a 41-month high.
Investors took heart a massive rally last weekend, the island's biggest ever, went by peacefully as more than one million Taiwanese joined hands and created a human chain to oppose China's military threats.
There was also hope of improving corporate earnings for the tech sector, and UMC, which had lagged the market recently, powered ahead.
Financial stocks were among the best-performing with First Financial up on media reports that Taishin and Hua Nan were courting the firm for a tie-up.
HONG KONG
The benchmark Hang Seng Index closed Friday at 13,454.76, down 3.2 percent on the week, the worst performing in the region.
The market was undermined by profit taking pressure on index heavyweight HSBC after it posted annual results. The banking giant posted a 33 percent rise in annual pre-tax profit to $12.8 billion, largely in line with expectations. The counter, which account for a third of the main index's capitalization, had risen sharply ahead of the release.
Property firms managed to post some gains on on-going side the market is improving. The government announced this week the number of property transactions in Hong Kong rose a monthly 16 percent in February.
SINGAPORE
Overall, it was a disappointing week for the Singaporean market, with the Straits Times index underperforming the region to close Friday at 1,891.54, up 0.1 percent on the week.
The 2004 budget delivered last Friday failed to excite investors. Although the government cut by 2 percentage point corporate taxes to 20 percent, it left income tax unchanged disappointing those that had hoped for a lift in domestic demand.
The market was also disappointed by lacklustre manufacturing data, with growth slowing for a second consecutive month in February because of a fall in electronics demand from the United States.
City Developments continue to lose ground on the back of its fundraising plan, which will dilute earnings for shareholders. Shipping firm Neptune Orient Lines was also down after two trading houses downgraded the company stock.
Oil refiner Singapore Petroleum rose after announcing it would buy British Petroleum Singapore's one-third stake in Singapore Refining Company and one-sixth equity interest in Tanker Mooring Services. This should help double its refining capacity and strengthen its position as a supplier in the region.
News of the imminent listing of Belgacom also supported SingTel as the company has an 11.72 per cent stake in the Belgium telcos.
MALAYSIA
The Kuala Lumpur Stock Exchange composite index closed the week at 886.15, up 0.8 percent.
Investors took heart from the finance ministry's decision to sell some of its stake in heavyweight Telekom Malaysia, as the move is seen increasing liquidity.
Meanwhile, Temasek's interest in Telekom Malaysia, the financial arm of the Singapore government took a 5 percent stake, renewed speculation it is on the prowl for more assets in Malaysia. In recent week, the market has been speculating that Temasek is seeking to take a stake in the Malaysian Plantations-controlled Alliance bank.
Profit-taking set in after Prime Minister Abdullah Badawi called for a snap election, dissolving Parliament Thursday. The election will be held on Mar 21 and the real issue for investors is whether Abdullah will be able to improve on its majority. Traders said the correction was somewhat overdue, with the market having risen more than 10 percent in recent weeks on hopes of an early election.
Crest Petroleum emerged as the top gainer after it announced it had secured a 2-year tender for the transportation and installation of offshore facilities for Petronas Carigali, Shell and Exxon Mobil.
