Accessibility links

Breaking News

Confirmed Bird Flu Cases in Thailand Rattle Investors - 2004-01-23

The first confirmed cases of bird flu in Thailand have rattled stock market investors.

Thai stocks were the focus in Asia this week, with the SET index closing lower on concerns over bird flu. It lost 0.75 percent on Friday to finish at 754. For the week, it was down more than three percent.

Thailand's top poultry producer, Charoen Pokphand led the decliners closing down seven percent. Shares in another major exporter, GFPT, also sank, losing 11 percent on the day. Bangkok has temporarily suspended all exports of poultry products, an industry worth more than $1 billion a year. Investors and market analysts fear the illness could damage other agricultural stocks as well as the tourism industry, the country's biggest foreign exchange earner.

Elsewhere in Asia, Japan's benchmark Nikkei Average rose 0.6 percent Friday to end the week at 11,069.

The day's most active stock was Advantest, the world's largest maker of equipment used to test semiconductors. It rose 1.5 percent on expectations it will post a strong profit for the year ending in March.

Other computer chip companies rose on the news, with NEC climbing nearly three percent.

Japan's strong yen remains in the headlines and continues to be a worry for Japanese exporters. Its strength against the U.S. dollar makes Japanese exports more expensive and that can hurt corporate profits.

Finance Minister Sadakazu Tanigaki this week hinted that if necessary, Japan will sell yen to push it lower against the dollar.

Mr. Tanigaki says it is important for the foreign exchange market to remain stable and in line with economic fundamentals. He says Japanese officials will monitor market moves and take appropriate action as needed.

Japan has intervened in the currency market numerous times in recent months, but the technique has had limited success.

Stock markets in Australia, New Zealand and Indonesia ended the week higher, with the Philippines' blue chip index ending flat.

Several Asian markets were shut late in the week for the Lunar New Year Holidays. In Hong Kong, the market was closed Thursday and Friday, but by Wednesday, the Hang Seng Index had gained four percent on the week to 13,750.

Traders are forecasting more gains in the coming days. Hong Kong's property stocks helped boost the overall market and China related shares were also popular with investors.

South Korea also rallied. It closed for the week on Tuesday, hitting a 20-month high because of strong interest from overseas investors. The composite index gained 1.6 percent on the shortened holiday week to close at 861.

Traders predict stocks will rise higher in the coming trading sessions as institutional buyers such as mutual and pension funds buy more stocks.