theSun | WEDNESDAY MARCH 4 2009
868.74  7.82
business KLCI
STI
Hang Seng
SCI
Japan to tap forex
reserves to help firms
TOKYO: Japan said yesterday it would use US$5
billion (RM18 billion) from its currency reserves to
help companies raise funds as auto giant Toyota
Motor asked the government for financial aid.
Tokyo’s decision to dip into its US$1 trillion
forex reserves underscores growing fears that
a funding squeeze is deepening the country’s
worst recession in decades.
Finance Minister Kaoru Yosano described the
move as an “extraordinary measure” in response
to severe market conditions.
He said the government was also ready to
use all means to tackle stock market swings,
which could have a “devastating impact” on the
economy.
Companies looking to borrow public funds
through the state-backed Japan Bank for Inter-
national Cooperation (JBIC) include Toyota Motor
Corp’s financial unit, which is reportedly seeking
about US$2 billion.
Toyota Financial Services, which provides
loans to car buyers, is in consultations with JBIC
but the size of the loan has not been decided,
company official Mio Sugito said.
“The international financial market is getting
tighter, especially in the US,” Sugito said.
JBIC’s main role is to invest in projects in
developing countries, but the government in
December decided as an emergency measure
to allow the bank to lend to Japanese companies
operating in developed countries.
The move comes amid concerns that firms
are finding it increasingly hard to raise funds from
Asian shares fall after Wall St dive
TOKYO: Most Asian stock markets again fell
yesterday, following a Wall Street dive on fears
over the fate of some of the world’s biggest
financial companies amid the global crisis.
The previous day, US markets were ham-
mered down to 12-year lows on news that
Washington had rescued insurer American
International Group again, with US$30 billion
(RM111 billion), to stave off its collapse.
European markets were roiled after Brit-
ish banking giant HSBC said that it needed
billions in new capital to cope with the
financial crisis.
Hongkong ended the morning 1.5% lower,
as HSBC dragged down the main bourse,
dealers said, while Chinese share prices
ended down 1.05%.
Japan closed down 0.69%, Australia fell
1%, and New Zealand shares fell 2.56% to
their lowest level in more than five years.
In some regional gains, South Korean
shares rose 0.7%, Taiwan closed 0.21% higher,
and Philippine shares edged up 0.2%, lifted
by bargain-hunting.
HK tycoons back HSBC cash grab
HONGKONG: HSBC shares plunged yesterday
after the banking giant asked shareholders for
a US$17.8 billion (RM65 billion) cash boost, but
Hongkong’s powerful tycoons insisted the firm
remained a good long-term bet.
The bank’s share price slumped 18.8% to
HK$46.25 (RM21) trading yesterday in Hongkong,
after falling more than 18% in London overnight.
The collapse came after the bank on Monday
reported a 70% tumble in annual net profit last year,
mainly due to the dire performance of its US unit.
It also asked shareholders to back a huge
rights issue, worth US$17.8 billion, in an effort to
shore up its balance sheet.
Despite its worse-than-expected results, many
of Hongkong’s richest men believed the rights
issue, priced at HK$28, was a great bargain.
Allan Zeman, the developer behind Hong-
kong’s most famous nightlife district, said he
interrupted a trip to Thailand to call his invest-
ment agent to subscribe to the offer.
“I think it’s a once-in-a-lifetime opportunity,”
the founder of Lan Kwai Fong Holdings told AFP.
Zeman said he had been a customer and investor
in the bank for more than three decades and he had
full confidence that it would weather the crisis.
13
T 7,229.72 T
50.43
1,528.51  4.89
T
Nikkei
TSEC 4,435.34  9.51
S
12,033.88 283.58
T KOSPI 1,025.57  6.76
S
2,071.43 T
22.02 S&P/ASX200 3,219.20 T
30.90
market summary
MARCH 3, 2009
INDICES CHANGE
FBMEMAS 5,683.64 -45.26
COMPOSITE 868.74 -7.82
INDUSTRIAL 2,066.64 -20.82
CONSUMER PROD 282.37 -1.14
INDUSTRIAL PROD 65.28 -0.32
CONSTRUCTION 162.39 -2.32
TRADING/SERVICES 114.80 -0.72
FINANCE 6,753.59 -82.15
PROPERTIES 512.59 -3.70
PLANTATIONS 4,278.08 -50.75
MINING 231.01 UNCH
FBMSHA 5,948.94 -35.01
distressed markets and cash-strapped banks. FBM2BRD 3,954.81 +3.94
“The economy is in an extremely abnormal TECHNOLOGY 12.84 -0.18
situation,” said Masamitsu Sakurai, chairman of
the Japan Association of Corporate Executives. TURNOVER VALUE
“We want the government to take swift 368.989mil RM624.263mil
measures to boost the economy.”
Toyota Motor ended General Motors’ 77-year
reign as the world’s top selling automaker in
CI lower as sell-off
2008, but it has not been immune to the global continues
economic downturn and expects its first ever SHARE prices on Bursa Malaysia ended
loss in the current financial year to March. lower yesterday on a continuous sell-off
Analysts, however, said Toyota does not face on most counters, especially financial
a cash crunch like its US rivals such as GM. and plantation stocks, dealers said.
“This not like the case of GM,” said Yasuaki Dealers said market players re-
Iwamoto, auto analyst at Okasan Securities. mained sidelined, not wanting to make
“This is a positive strategy in which Toyota any move on investment decisions, due
intends to use its credibility to secure cash flows so to lack of fresh leads after Wall Street’s
that it can cope with the tough situation in the US.” huge overnight losses.
Japan has already announced a series of steps Stocks in the US fell to a new 12-year
to stimulate the economy, including a plan to overnight low following a record US$61.7
hand US$21 billion back to the public to kick-start billion (RM223 billion) loss posted by the
consumer spending. American International Group.
The government said last week that it had On the local front, the dealers said
started work on an emergency plan to halt a the global economic slowdown had
plunge in share prices that Tokyo fears could adversely affected the gross domestic
deepen the recession in Asia’s biggest economy. product (GDP), with a mere 0.1% growth
It did not say what form any action might take. registered in the fourth quarter of 2008.
Japan is reportedly considering using public They said investors are concerned
funds to purchase stocks and other assets di- over bank earnings as weak economic
rectly from the market to prop up prices. growth would result in lower loan bor-
The Nikkei stock index has fallen more than rowings and an increase in bad debts
18% in 2009, approaching levels last seen in due to a higher unemployment rate.
1982, after a record 42% plunge last year. – AFP Dealers said losses on plantation
counters amid weaker exports due to
the economic slowdown and lower
crude palm oil prices, were also among
the contributing factors to the perform-
ance of the local bourse. – Bernama
The performance on Asia’s bourses was
not as bad as Wall Street’s fall overnight as
regional bourses had already dropped on
Monday, traders said.
StanChart reports 20% jump in 2008 profits
“We could improve a bit because early LONDON: Standard Chartered, last year, more than double the through Standard Chartered’s
selling pressure wasn’t overwhelming,” Tol- the emerging markets bank, said amount of US$818 million (RM3.03 “rigorous focus on Asia, Africa and
hurst associate director Peter Morgan told yesterday its net profits jumped a billion) in 2007. the Middle East” in addition to a
Dow Jones Newswires. “We factored in a lot fifth to US$3.41 billion (RM12.6 bil- “To deliver record results in “prudent approach to liquidity and
of it yesterday (Monday).” lion) in 2008, leaving it well-placed this exceptional environment is capital” and “continued discipline
In Asia’s largest economy, Japan’s Nikkei to tackle the Asia slowdown. a great achievement,” its acting in cost and risk management”.
dropped to 7,229.72, having at one point Despite the lift in profits after chairman, John Peace, said in the Sands said that the second
during the morning session dipped below a tax, Standard Chartered was not group’s earnings statement. biggest British banking group after
26-year closing low. The Topix index fell 1.1% immune to rising bad debts linked Chief executive Peter Sands HSBC is “on a firm footing for the
to 726.80, the lowest since November 1983. to the credit crisis, as it wrote off said the best way to continue challeges and opportunities that
Even worse falls were avoided as the US$1.79 billion (RM6.62 billion) delivering shareholder value was will come during 2009”. – AFP
government is reportedly considering using
public funds to purchase stocks directly from
the market to boost prices, although the timing
and size of the intervention remained unclear.
“A tug of war may continue between
gruesome external factors and hopes for
domestic government support,” Daiwa Secu-
rities SMBC market analyst Yumi Nishimura
said. – AFP
David Tung, Hongkong’s oldest stockbroker,
said he would subscribe to the offer and would
also advise his clients to do the same.
“I have 100% confidence in it. To me, it is the
best bank in the world,” the 79-year-old said.
Some big-name investors also lined up to take
advantage of the rights issue.
Lee Shau-kee, chairman of developer Hend-
erson Land and nicknamed “the Asian God of
Stocks”, told the South China Morning Post he
was so confident in the strength of the bank his
firm would even act as a sub-underwriter for
HK$2.4 billion of the rights issue.
However, small investors were disgruntled
that their stake in the bank would be diluted
after the offering. Some analysts also warned
that caution should be exercised.
Ricky Tam, chairman of the Hongkong Institute
of Surveyors, told the Post: “Hongkong investors
have been long-time supporters of HSBC but it’s
time to make a rational decision.”
Shin Wing-ching, head of Centaline Property
Agency, said: “I always feel that the financial
analysts who guarantee long-term investors in
HSBC good returns are wrong. No one can make
that guarantee.” - AFP