Accessibility links

Despite SARS, S&P Will Not Lower Ratings for Hong Kong, Singapore Banks - 2003-05-12


Atypical pneumonia is still depressing consumer demand in Asia but some signs indicate the worst of the slump is over. Standard and Poor's ratings agency says it will not lower its ratings for banks in Hong Kong and Singapore despite the outbreak of Severe Acute Respiratory Syndrome, or SARS. S&P says the banks in both places are likely to see some fall in earnings, but that they are strong enough to handle loan losses and other threats to profit.

Still, SARS is taking its toll on consumer demand, leading the conglomerate Citic Pacific to warn its profit for the first half of the year will be hurt. Citic executives say SARS has hurt demand in the conglomerate's sales of limousines, cosmetics, foodstuffs, and housing. Citic also is major shareholder in regional airlines, which have seen a dramatic fall in passenger numbers.

Joe Lo, a senior economist for Citibank Hong Kong, says consumer demand is slowly picking up, but will take some time. "Over the past week we have seen more people going to the shopping mall, to Chinese restaurants, but, on the other hand, the inflow of tourists is still very low."

The head of San Miguel Brewing Company in the Philippines says SARS remains a concern for the company's Hong Kong operations. Still, Eduardo Cojuango announced that first-quarter net profit rose 21 percent from a year ago to $25.6 million. He says overall he expects San Miguel to do better this year than last year.

Consumer prices rose 2.8 percent in the Philippines compared with a year earlier. The Philippines National Statistics Office says average inflation in the four months to April was in line with government targets.

Australian regulators are investigating AMD Limited for what they call "unusual" futures trading. They are focusing on an April 29 plunge in the value of futures on Australia's SPI, or share price index. That was the day before AMD made a surprise announcement it was splitting its Australian and British operations. AMD's shares plummeted 36 percent just days after the announcement was made.

A German-Singaporean consortium has won the right to buy a 51 percent stake in Indonesia's Danamon Bank. Singapore's state investment firm Temasek Holdings and Germany's Deutsche Bank are expected to pay about $350 million for the stake. The deal is expected to be finalized after a two-week assessment by Indonesia's Central Bank.

XS
SM
MD
LG