One day after the GIC sounded caution on the world markets, it happened. Asian stocks dropped like a stone today as the growing problems in the US mortgage market stoked concerns over how much the debacle may ulitmately cost.
The tone was set early in Sydney, down 3.3%, when Macquarie Bank said two high-yielding funds faced losses of up to 300 million dollars (258 million US) because of the problems in US sub-prime home loans. Yes, you read that right. 300 million dollars!
And they are not alone. There is a belief that many other financial groups are in the same boat as Macquarie Bank. Already Taiwan's Financial Supervisory Commission (FSC) is saying that it was checking whether the US problems might have any fallout on the island's financial firms.
Saftey first seems to be the motto for today as investor just unloaded on the market. The Taiwan market lost 4.26% in heavy turnover as Tokyo fell 2.19%. Elsewhere, Seoul was down 4.0%, Mumbai dropped 3.08%. In light of this, Kuala Lumper and Singapore did fairly well. KL dropped only 2.50% while Singapore lost 2.87%.
It could have been much worse. You must always see the silver lining in the dark clouds.
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