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Singapore soars, Japan dips
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November 19, 1998: 5:09 a.m. ET
Straits Times up as International funds buy, but financial fears take Nikkei lower
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LONDON (CNNfn) - Singapore stocks leaped Thursday as overseas funds chased interest rate-sensitive stocks, but Tokyo on fears that banks are failing to tackle their long-standing financial problems.
Singapore climbed 3.53 percent while Hong Kong rose nearly 1 percent.
But even a visit by U.S. president Bill Clinton could do nothing to boost confidence in Tokyo where the benchmark Nikkei average closed down 1.68 percent.
Elsewhere, Australia added almost half a percent by its close, Taiwan finished nearly 3 percent higher while Korea leaped more than 4 percent by its close.
Thailand and Indonesia both leaped in afternoon trade. Malaysia closed nearly unchanged while the Philippines joined Japan in the red, easing 0.1 percent.
Singapore closed up an impressive 44.85 points at 1,316.55.
Having missed the Straits Times Index's 400 plus point rise since early October, overseas institutions were flooding back into the market, said Salomon Smith Barney sales trader Mark Julliem.
"From what I can tell, quite a few programs have been centered on banks and properties," he said. "The market in general is very well supported by buying."
Development Bank of Singapore was up 40 cents to S$6.95 while Hotel Properties was up 4 cents at 88.5 cents.
Banking news dominated the day in Japan. The Nikkei closed down 244.77 points at 14,354.46.
Press reports suggested the big 18 banks were set to accept an injection of state funds to the tune of 4-7 trillion yen ($33-58 billion).
"Some people are thinking that is a little bit too small to get the banking system back on its feet," said Richard Jerram, ING Barings' chief economist in Tokyo.
Sumitomo Bank fell 1.63 percent to 1,330 yen. Asahi Bank was down 2.37 percent at 412 while Industrial Bank of Japan was down 0.75 percent at 659 yen.
"There is also the issue of debt forgiveness for some construction companies by banks," added Jerram. "Aoki Corporation has asked banks to forgive 200 billion yen of its debt." Aoki fell 1.28 percent to 77 yen.
As a group, banking stocks were down 0.57 percent while construction stocks dipped 0.16 percent.
Fuji Heavy Industries fell 3.42 percent to 622 yen on reports that police had entered its offices, possibly in connection with a misuse of political funds scandal.
Hong Kong closed 99.88 points higher at 10,313.3. Expectations of an interest rate cut at Friday's meeting of rate-setting banks buoyed sentiment.
HSBC Holdings ended up HK$1.5 at HK$181.5 while Hang Seng Bank finished up HK$1.5 at HK$68.
But it was the second tier stocks that dominated the day. "Today the mid-cap stocks really replaced some of the activities of normal trading," said Terry Cheung, sales director at Core Pacific Yamaichi.
Australia closed 0.45 percent higher while Taiwan ended up 2.82 percent. Korea charged forward 17.32 points to 441.06, a 4.09 percent rise on heavy overseas institutional buying. The Philippines finished down 0.1 percent.
The other Asian markets rallied in late trade. Indonesia closed up 2.47 percent while Thailand finished 3.89 percent higher. Malaysia closed 0.05 percent higher. 
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