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Bank Report Says Asia's Property Market Prospects Are Promising

A Hong Kong bank says Asia's property market is healthy, and a South Korean lender has joined forces with a Japanese bank to strengthen their position in Asia's financial sector. Claudia Blume at VOA's Asia News Center has more on these and other stories in our weekly look at regional business news.

Property prices in some Asian economies have risen significantly over the past few years. In South Korea, for example, home prices went up more than 11 percent in 2006, while in parts of China, prices surged by more than 20 percent.

A report by the British bank Standard Chartered says, however, that housing prices in the region are still some distance from the peaks seen before the Asian financial crisis in 1997. Nicholas Kwan, Standard Chartered's regional head of research in Hong Kong, says his bank sees no large property bubble that could unsettle the region's strong economic fundamentals and could send financial markets into a tailspin.

"Overall, our assessment of the region's property market - it is much healthier than what we have seen in the past 10 years, with one or two exceptions like China or [South] Korea where some isolated bubbles actually have been brewing and where we need to pay some attention," said Kwan. "But it doesn't distort the whole picture of the region which we think the fundamentals are very strong."

Kookmin Bank, South Korea's largest lender, signed an agreement with Japan's Sumitomo Mitsui Banking Corporation to cooperate in corporate banking services. The tie-up includes the creation of joint investment banking and cash management services for corporate clients in both countries.

The two banks hope the alliance will help them grow into leading players in Asia's banking industry. Kookmin signed a similar deal with China's Industrial and Commercial Bank in January.

Burma's state-run oil and gas enterprise has signed a contract with two foreign companies to explore for natural gas and oil in the country's coastal waters. The companies are Rimbunan Petrogas, which is registered in the British Virgin Islands, and Singapore's UNOG.

Several Western countries, including the United States, have imposed economic sanctions on Burma over the military government's human rights abuses. But the effect of sanctions has weakened as many of Burma's energy-hungry neighbors - such as China, Thailand and India - invest in the country's offshore natural gas and oil resources.

U.S. chipmaker Intel will build a $2.5 billion semiconductor plant in China. The factory in the northeastern city of Dalian will produce chips for computers and mobile phones. Intel has already invested more than $1 billion in China.

Malaysia has a new budget airline. Firefly, a subsidiary of national carrier Malaysia Airlines, will fly four local routes and to two destinations in neighboring Thailand. Firefly's first planes will take off in April.