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Asia Business: The Week Ahead - 2003-06-30


Indonesia has put more of its largest banks up for sale in response to strong investor demand. Indonesian authorities say they plan to sell 20 percent of Bank Mandiri next month. It is the country's largest initial public stock offering since the 1997 financial crisis.

Original plans were to sell 15 percent of the state-owned bank. But the stake was increased after strong demand by international investors.

Indonesia expects to raise about $330 million when the sale goes through next month.

The Australian government has revived plans to sell its remaining stake in telecommunications giant Telstra. Communications Minister Richard Alston says a bill will go before Parliament by Thursday to sell Canberra's remaining 50.1 percent stake.

If it moves forward, it would be the country's largest privatization, worth an estimated $23 billion U.S dollars. Officials say Telstra's share price of about four and a half Australian dollars is too low to proceed immediately. They say the price must rise well above five Australian dollars.

The opposition Labor Party says it will block the sale. Shadow Communications Minister Lindsay Tanner says the deal is not in the public's interest. "Ultimately there's only one guarantee for country Australia that they'll get access to universal, accessible, and affordable telecommunications services. And that's government ownership of Telstra."

South Korea's consumer confidence level dropped this week to its lowest point in two years. The Consumer Survey Index, or CSI, dropped to 68 points in the second quarter, from 90 in the first quarter.

South Korea and its main Asian export market, China, suffered economically from the outbreak of Severe Acute Respiratory Syndrome, or SARS. Analysts say there has been a sharp increase in consumer pessimism about the country's economic outlook.

Taiwan's central bank is cutting interest rates in hope of mitigating the economic effects of SARS. The bank dropped its key interest rate by a quarter of a percentage point to 1.375 percent. The island's central bank governor says the move is aimed at warding off deflation and boosting consumption.

Taiwan has been among the places hardest hit by SARS, with 681 cases and 84 deaths. Like other Asian economies, it has suffered a drop in tourism and export demand.

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