ad info


Asiaweek TIMEASIA.com CNN.com
 > magazine
 home
 intelligence
 web features
 magazine archive
 technology
 newsmap
 customer service
 subscribe
 TIMEASIA.COM
 CNN.COM
  east asia
  southeast asia
  south asia
  central asia
  australasia
 BUSINESS
 SPORTS
 SHOWBIZ
 ASIA WEATHER
 ASIA TRAVEL

Other News
TIME.com
TIME Europe
FORTUNE.com
FORTUNE China
MONEY.com
Asiaweek Services
Contact Asiaweek
About Asiaweek
Media Kit
Get up to 3 months of Asiaweek free when you subscribe online!


NOVEMBER 3, 2000 VOL. 26 NO. 43 | SEARCH ASIAWEEK

What Comes Next?
Unless you know where the market is headed — try aromatherapy
By TIM HEALY and ALEXANDRA A. SENO Hong Kong

ALSO:
Practical Coping Advice


The Rev. Joshua Kimjacobs has been enjoying unusual popularity among his flock at the Onnuri Presbyterian Church in Seoul recently. And he has begun to perceive some themes that tie together the young adults who ask him to lunch. For one thing, they often work in the financial services industry. And they invariably start the meal talking about family, work, the weather — whatever. "Then it comes out," says the 30-year-old Kimjacobs: They wonder if they could enlist God's support in picking hot start-ups, or at the very least get the Creator to lay off the vengeance. "I have to tell them their financial problems are not punishment," he says.

At least not in the Biblical sense. In fact, investors in Asia and throughout the world have been severely disciplined this month by the markets. Selective rallies in the last few days have pulled equities off the floor, but several markets are nevertheless near their low points for the year. Seoul, Taipei, Manila, Bangkok, Jakarta, Singapore, Tokyo and Nasdaq in New York are all either at or near the bottom of their Y2K performance. Especially bad in recent weeks has been market volatility. Uncertainty over renewed violence in the Middle East, which in turn threatens already high oil prices, is feeding market jitters. One U.S. trader recalled the infamous Black Monday stock plunge in 1987, when the market fell 23% in one day: The current situation, he says, "is the maddest market I've seen in 13 years." The carnage has exacted a toll on nearly all investors — and it is being felt by everyone from crisis-hotline counselors to aromatherapists.

Having seen its local bourse drop more than 35% in the last six months, the National Taiwan University Hospital in Taipei is organizing a symposium that will include a special section on "stock market depression." One publicized estimate from the island says there has been a 20% increase in psychiatric patients this year, many of whom suffered severe stock shocks. Dr. Stephanie Kumaria, director of the suicide prevention hotline The Samaritans, says a fifth of the 60 or so calls the group receives each day in Hong Kong are from people despondent about financial reversals. "Many [of our callers] start talking about 'gambling losses,'" says Kumaria. "Then later it turns out they're talking about stock investments gone bad."

Maybe they were right the first time. Markets were obscenely high in the first quarter of the year, valuing companies that sometimes owned little more than an idea higher than companies with real products, assets and a history of profits. And almost anyone who invested in technology back then was, at least in terms of short-term hindsight, an impetuous fool. Today? "It's too late to get out and too early to buy in," says Robert Rountree, managing director of Prudential-Bache Securities in Hong Kong.

That's one point of view. These days, if you can't find the opposite opinion (often from the same person) you just aren't trying. "Although the short-term outlook is unpredictable and could cause more volatility, we believe medium- and long-term investors should view current weakness as a rare buying opportunity," says a Goldman Sachs analyst in the U.S. And in Asia, Guy de Tonquedec of Indocam Asset Management says simply: "It's a good time to spot bargains."

With such conflicting advice on whether it's too early or the perfect time to buy, what's an investor to do? How about this: relax — and take time to moisturize. "I can always tell which clients work in stock markets," says Yvonne Lam, whose beauty salon is only steps from the Hong Kong exchange. "Their skin is drier because they are too busy to drink water and they don't moisturize. They also tend to fall asleep immediately on the massage table because they are so shattered. I'm seeing it more, recently."

Actually stock brokers, who are on the front lines of the equities' battle with themselves, are affected unevenly. Steven Vinik, former head of equity sales for Nomura Securities in Hong Kong, says the markets have been so lousy lately that many traders have simply withdrawn. "One is more likely to find tales of boredom" from brokers, he says, than excitement. Volume on the Hong Kong exchange has been dropping since July. And October is likely to be the slowest month since October 1999.

Depressed markets have had a ripple effect across different parts of Asia's economy. Choong Khuat Hock, regional sales director at Dresdner Kleinwort Benson Securities in Singapore says that investors in the region have lost so much money in equities over the last few months that "personal consumption is trending down all across Asia. That's why property markets in Hong Kong and Singapore are so lackluster." Nasdaq, with its predominance of young technology companies, is typically one of the world's most volatile markets. Choong says that this year Asian bourses like Taiwan, South Korea and Singapore, newly bursting with tech counters, have been nearly as bad.

The effect of volatility on listed companies is harder to gauge. Just facing up to the impact is Watson Wyatt, a global human resources consultancy that went public only recently and began trading on the New York Stock Exchange two weeks ago. John Haley, chief executive of the company, spoke to Asiaweek recently about the early days as a public company and how employees, who are big owners of the company, have responded. "We're advising our [employees] not to get too caught up in the volatility," says Haley, who is on an annual visit of his company's many Asian offices. But it isn't easy. During a recent interview involving Haley and Grahame Stott, Watson Wyatt's Asia-Pacific regional director, Haley was asked how it felt to be the CEO of a public company with a successful IPO — up 31% on its first day to close at $16.38 a share. "I haven't been following the price," he said, at which point Stott chimed in: "I think it's at $17 and 7/16 today." Haley shot him a quick glance, and Stott lowered his eyes: "Or something like that."

But Haley appreciates the situation. He says his 15-year-old daughter is following his company's stock more closely than he is. Everyone, it seems, is following the ups and downs of the market. Haley also knows that the stock price is a critical matter for the employees of many companies, especially dotcoms in Asia that pay a large percentage of compensation in the form of options because they can't afford cash. Some companies in Asia put their stock price on the screen savers of employees to constantly remind them that their primary allegiance is to shareholders — that performance translates into a successful stock price. And if that relationship does not hold? If the stock of a successful company gets hammered along with everyone else? There's always prayer.

With reporting by Assif Shameen/Singapore

Back to the top

Write to Asiaweek at mail@web.asiaweek.com

This edition's table of contents | Asiaweek.com Home

AsiaNow


Quick Scroll: More stories from Asiaweek, TIME and CNN

   LATEST HEADLINES:

WASHINGTON
U.S. secretary of state says China should be 'tolerant'

MANILA
Philippine government denies Estrada's claim to presidency

ALLAHABAD
Faith, madness, magic mix at sacred Hindu festival

COLOMBO
Land mine explosion kills 11 Sri Lankan soldiers

TOKYO
Japan claims StarLink found in U.S. corn sample

BANGKOK
Thai party announces first coalition partner



TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state



ASIAWEEK:

COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


Launch CNN's Desktop Ticker and get the latest news, delivered right on your desktop!

Today on CNN
 Search
  ASIAWEEK'S LATEST
Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?


  THIS EDITION
COVER: Cronies: Why Asia's battle against cronyism is taking forever
Connections: Li Ka-shing has got them
Fall: Suharto's buddies are fighting their way back
Fighter: Sabri Zain on the new Malaysia
Reformers: Crusaders wage war against corruption
Cronyism in Asia: A primer

THE NATIONS
JAPAN: A housewife's win means politics will never be the same

DIPLOMACY: Why the U.S. was at Kim Jong Il's coming-out party

UNITED STATES: Where Gore and Bush stand on Asian issues

PHILIPPINES: Gloria Macapagal Arroyo rallies the opposition

MALAYSIA: Post reformasi, NGOs push for change

SINGAPORE: Living with Shame — the island-state lightens up

INSIDE STORY
Timor: Despite the dangers, refugees begin the long trek home

TECHNOLOGY
Faded Beauty: Getting nervous about 3G network costs

Please Hold: Firms turn to computers to serve customers better

Best Bettor: Winning at the track just takes the right software

Cutting edge: Snoop-proof and wire-free

ARTS & SCIENCE
Cinema: Digital drive: a boost for Asia's young movie-makers

People: Wiranto croons the wrong note with Indonesian activists

Health: A cold cure that could kill


BUSINESS
Markets: How to survive the roller coaster

Insurance: Who'll be left standing in Japan?

Investing: Biotechnology may be the next dotcom

Renong: Can Halim Saad save his troubled company?

Interview: Hong Kong's monetary chief: no new Crisis


STATISTICS
The Bottom Line: Asiaweek's ranking of world economies

Back to the top   © 2000 Asiaweek. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines.