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Earnings worries hit SE Asian equities


October 24, 2008

Earnings worries hit SE Asian equities
Southeast Asian equities took another beating on Thursday on earnings worries, while uneasiness over persistent credit tightness hit banks such as DBS Group and PT Bank Rakyat Indonesia, reported Reuters.

Asian stocks fell to four-year lows on growing fears emerging market weakness will lead to a global recession.

Singapore's benchmark Straits Times index lost 4 percent and looked set to mark its worst month in history, having slid 25 percent in October. The index ended at its lowest level since June 2004.

Analysts said despite worldwide government efforts to ease credit markets, global trade had been affected as distrust between banks and businesses persisted.

"Banks are still staying on the sidelines. They're simply not lending because they're afraid to lose," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore.

"There are buying opportunities, but I would be very cautious because those who went in too early have been burnt."

Indonesian shares slid 3.1 percent to mark a fresh 2-year low, the Philippine index dropped 4.6 percent, while Vietnam gave up 3.9 percent.

Thai stocks lost 2.8 percent, while Malaysia eased 1.4 percent, maintaining its outperformance in the region.

Banks were among the main losers in the region.

Singapore's top lender by assets DBS Group fell 5.3 percent to mark a new 5-year low. The bank said on Wednesday it will compensate as much as $53.4 million to some investors who bought structured products linked to collapsed bank Lehman Brothers.

Malaysia's Maybank , which said it has identified Lehman-linked investors, also fell 2.8 percent.

Rival Bumiputra Commerce slid 3.6 percent, even after the country's Association of Banks said in a statement its banks remain well-capitalised and lending activities have not been affected.

Among other losers, Thai's Siam Commercial Bank dropped 4.2 percent, while Indonesia's PT Bank Rakyat Indonesia Tbk plunged 7.1 percent.

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