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Japan Aims to Boost Ailing Stock Market


Japanese Prime Minister Junichiro Koizumi has reportedly agreed to a controversial plan to channel public funds into the country's struggling stock market. Local media reports say the government plan, compiled by the ruling coalition, calls for an infusion of about $25 billion into the market to help boost the economy and combat deflation.

The Nikkei stock market average fell to a 19-year low last week, breaching the 9,000 mark and sparking fears of a financial crisis. Outsiders ranging from financial analysts to the U.S. government have been calling for Japanese government action to stimulate the economy, but Chuck Lambert, a strategist with JP Morgan Securities in Tokyo, says many investors dislike this latest government plan. "It is something to buy more time instead of addressing the real problems out there. I think that history has shown that the performance of [government] funds put into the equity market has not been positive," he says.

In China, the central government will allow ten large local companies to issue more than three billion dollars in bonds in the country's domestic debt market. Most of the companies are unlisted state enterprises, but two, Zhejiang Expressway and PetroChina, already trade on regional stock markets.

Many Chinese companies are eagerly eyeing the bond market, since the country's stock markets have fared badly over the last year. But Beijing is said to be cautious about the development of corporate debt-trading and is likely to pursue it gradually.

Chinese regulators are also tightening the rules for initial public offerings. Now, companies that want to list on the stock market will have to provide tax payment records for the past three years. They will also be required to hand over the business records of their controlling shareholders, covering financial activity for the previous year.

The government says the new disclosure rules will give regulators a better picture of a company's financial background. South Korea's KT Corporation says it will start offering third-generation cellular phone service in June. It will be the first time cell phone users in that country will have access to the Internet and other high-speed functions, which are already in use in nearby Japan.

South Korea is Asia's third largest telecommunications market, with 65-percent of the public subscribing to mobile phone services. Providers such as KT are hoping to win more sales by introducing new services.

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