18 theSun | MonDAY OCTOBER 20 2008

business news
KLCI Points

South Korea moves

best to tide over the
financial crisis and stop an
economic slump,” Prime
Minister Han Seung-Soo
said.
His government offered
up to US$100 billion

to shore up banks
SEOUL: South Korea
moved to shore up its
banks yesterday, adding to
global efforts to tackle the
worst financial crisis since
the Great Depression,
which has ravaged stock
markets and economies
around the world.
The government
announced a US$130-
billion (RM455 billion)
finance package,
including a guarantee
for the offshore debt of
domestic banks, aimed at
maintaining stability and
keeping Asia’s fourth-
largest economy away
from recession.
The announcement
came hours after US
and European leaders
announced they will hold
a series of summits to
address the crisis, starting
soon after next month’s US
presidential election.
US President George
W. Bush, French President
Nicolas Sarkozy and
European Commission
President Jose Manuel
Barroso said after meeting
in the United States that
the first summit would
look at reforming the
financial system.
Nations across
the globe have taken
emergency steps to
rescue banks and restore
confidence during the
current crisis, and South
Korea became the latest
to do so with its bank
guarantee plan yesterday.
“We have to do our
in guarantees for bank
borrowings in foreign
currencies, and a US$30
billion injection into the
banking system.
Despite foreign
reserves of almost US$240
billion, South Korea was
seen as vulnerable to the
current turmoil because
of a surge in short-term
foreign borrowing by its
banks in the past year as
US interest rates fell.
The credit crunch
was complicating efforts
to roll over those loans,
causing a scramble for
dollars and a plunge in
the value of South Korea’s Bridge to
currency, the won, which the past
has fallen around 40%
against the dollar this pg 22
year. – AFP

Bursa likely to see volatile trading this week

BURSA Malaysia is expected to “The announcement of a
see volatile trading this week domestic ‘stabilisation plan’
amid continuing worries over by the Malaysian government
global economic recession, today may present such an
dealers said. opportunity,” he said.
They said the players are He said Bank Negara
expected to watch closely the Malaysia’s announcement
global market environment, of a full blanket guarantee
KL market summary especially the impact of the
recent actions by the US and
across all banking institutions
and deposit base has helped
euro zone governments to to reaffirm confidence in the
OCTOBER 17, 2008 bail out battered financial country’s banking system to
INDICES CHANGE
institutions and boost investor face the current challenging
confidence. economic scenario and the
PMEMAS 5981.51 -108.45 “Their actions have helped impending global slowdown.
COMPOSITE 905.23 -14.79
INDUSTRIAL 2132.07 -24.14
to initially stem the massive “Some bargain-hunting may
CONSUMER PROD 278.31 -1.33 sell-downs in the global emerge as stocks have fallen
INDUSTRIAL PROD 71.99 -0.95 markets. However, the influx of significantly. The focus will
CONSTRUCTION 155.18 -5.00 poor economic data has raise be on blue-chips like Tenaga,
TRADING/SERVICES
FINANCE
126.56
6965.32
-2.19
-172.20
fears of recession, resulting in
the markets giving up most of
MMC, IOI Corp, Tanjong, Heads to roll at scandal-hit French bank
Gamuda and Resorts World.”
PROPERTIES 556.71 -5.58 their gains,” a dealer said. The dealer pegged the PARIS: The fate of top executives at French savings bank Caisse
PLANTATIONS 3820.00 -34.23 He said if the situation in immediate resistance for the d’Epargne hung in the balance yesterday over huge losses in a trad-
MINING 277.62 -10.13 ing scandal that President Nicolas Sarkozy said were unacceptable.
FBMSHA 6209.99 -97.45
the US were to deteriorate, it benchmark KLCI at 1,000
will definitely affect the region, points and strong support at Caisse d’Epargne, considered one of France’s most trustworthy
FBM2BRD 4464.22 -44.39 banks, lost €600 million (RM2.88 billion) in high-risk derivatives trading
TECHNOLOGY 15.78 -0.02 including Malaysia. 883 points.
Meanwhile, another dealer The KLCI closed the week last week at a time when European governments were scrambling
TURNOVER VALUE said trading opportunities are 28.78 points lower at 905.23 to rescue banks.
582.434mil RM1.107bil likely to emerge this week points compared with the A meeting of the supervisory board was called for later yesterday
as more measures would be preceding Friday’s 934.01. to decide whether bank chairman Charles Milhaud and other top
unveiled globally. – Bernama executives would be ask to step down. – AFP

Chips are down for Asia’s gaming sector

SINGAPORE: The chips are down
for Asia’s gaming sector, with high
rollers and other visitors expected
to stay home as the world financial
crisis takes its toll.
But analysts say the squeeze is
likely to be short-term, and Asia’s
gaming sector should weather the
financial turmoil better than Las
Vegas.
“I don’t think this will end the
Asian gaming boom,” said Bill Ead-
ington, economics professor and
director of the University of Nevada
Institute for the Study of Gambling
and Commercial Gaming.
However, he said the crisis “cer-
tainly is going to have a noticeable
impact for a year or two.”
Early signs of an industry-wide
slowdown have already emerged
in Macau, the Las Vegas of the East.
Government figures showed average
hotel occupancy rates sank 7.1% to
76.7% in August from a year ago.
Gaming revenues in the southern
Chinese city are reported in local me-
dia to have dropped 3.4% to around
US$860 million (RM3.01 billion) year-
on-year in September, the first such
decline since January 2006.
Part of the drop can be attributed
to recent moves by Beijing to impose
restrictions on mainland Chinese visi-
tors to Macau, analysts told AFP. But
the region, including Macau, can also
expect to feel the pinch from a finan-
cial crisis which has already slowed
the US economy, analysts said.
“The recent shocks to the global
economic system have definitely
impacted the psyche of the Asian lei-
sure tourist,” said Jonathan Galaviz,
a partner with Nevada-based travel
and leisure consultancy Globalysis.
“There is some evidence that
spending by tourists in Macau is
softening,” he said, but “in the long
run, Asia continues to be a bright
spot for long-term tourism sector
growth and Macau’s casino sector
should be able to capitalise upon
this growth over the next decade.”
While Macau government figures
show visitors from China down
10.7% year-on-year in August, those
from Southeast Asia soared 119.2%
over the same period.
Sometimes during economic
adversity people actually gamble
more, said David Green, Macau-
based gaming practice director with
Pricewaterhouse Coopers.
Analysts said Asia’s growing
reputation as a gaming hotspot can
only increase with several projects
under development.
Official figures from Macau
earlier this year said there were
28 casinos in the territory. Analysts
have said another 15 are to open in
the next four years.
Elsewhere, central Singapore
has become a giant construction
zone where two multi-billion-dollar
“integrated resorts” featuring enter-
tainment and convention facilities,
as well as gaming, are being built.
“The current economic crisis is
only going to soften the market, but
the interest in visiting Macau is only
going to get stronger in the future,”
said Andy Nazarechuk, dean of the
Singaporean campus of the Univer-
sity of Nevada, Las Vegas.
The Singapore projects are going
to be “the two most spectacular” in
the region, he added.
Malaysia’s Genting International,
which is behind Singapore’s Resorts
World at Sentosa integrated resort,
is sticking with its target of 15 million
visitors in the first year of operation
when it opens in early 2010.
“We remain confident and opti-
mistic about the prospects of Resorts
World at Sentosa,” said Krist Boo,
vice-president for communications.
She added the company completed
financing for the project in April.
The US$4.2 billion development
is to include Southeast Asia’s first
Universal Studios theme park.
Las Vegas Sands, which is build-
ing the other Singapore integrated
resort, declined to comment when
contacted by AFP.
Sands operates two Macau
casinos including the giant Venetian,
which opened last year with a gaming
area the size of three football fields.
The Wall Street Journal reported
early this month that Sheldon
Adelson, chief executive of Las
Vegas Sands, had agreed to lend his
company US$475 million of his own
cash, in a sign of confidence that his
company would weather the global
credit crunch.
The report quoted him as saying
the company is pursuing with Asian
banks the financing of nearly US$2
billion needed for its latest Macau
project.
Analysts said the global credit
squeeze may make raising funds
more difficult for any project, not
just gaming.
“Anyone who is lending the
money will want to analyse how
fast the money is coming back,” said
Matthew Gorman, head of corporate
practice with Stephenson Harwood,
an international law firm.
Canadian-based Asian Coast
Development Ltd (ACDL), involved in
a Vietnam beachfront project it says
will include the communist coun-
try’s first Las Vegas-style casinos,
remains positive. – AFP