[PEN-L:8283] Here we go again!

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Here we go again, setting Asia and Latin America up for another financial
crisis a year from now.  The average timing will be one crisis every two
or three years to repatriate all surplus value from the periphery back to
the core.

Henry C.K. Liu

Business Times On Line  June 24 1999

Whopping US$6b from US set to flood global funds this month

                  Amount is almost as much as for whole of last year

                  From Meera Tharmaratnam in Hongkong


                       ATTRACTED by soaring returns in Asian and
                       Latin American markets, investors in the US are
                       on course to put as much money into
                  international stock mutual funds this month alone as
                  they did for the whole of last year, according to a
                  published report.

                  US investors are expected to put as much as a net
                  US$6.6 billion (S$11.2 billion) into funds that invest
in
                  foreign stocks, the Los Angeles Times reported
                  yesterday, citing figures from Trimtab.com, a
                  California-based research firm.

                  The newspaper said even though that would be half
                  what is expected to flow into US stock funds, it
                  represents "almost as much net new money as investors
                  put in international funds all of last year".

                  Investment Company Institute, the fund industry's chief
                  trade group, was also quoted as saying that if the June
                  projection holds, it would be the largest monthly inflow

                  into international funds since January 1997.

                  Markets in Asia have posted a huge rally this year.
                  Since January, Hongkong's share market has risen 39
                  per cent while Singapore and Korea have risen 56 per
                  cent and 58 per cent respectively.

                  "Our revenues have been running ahead of budget.
                  Institutional investors have been putting a lot of money

                  into Asia all year," Simon Maughan, regional financial
                  services analyst at WI Carr, told BT, adding that there
                  has been a lot of interest in Korea and Singapore banks.

                  According to investment managers here, interest from
                  US-based institutional investors has been growing since
                  January. Hongkong, Singapore and Korea have been
                  prime beneficiaries of the new inflows.

                  That's reflected in the data. Asia-Pacific funds
                  excluding Japan saw inflows of US$161 million this
                  quarter, compared with US$207 million in outflows in
                  the first quarter of 1999, according to AMD Data
                  Services.

                  The new inflows bring total investments in Asia-Pacific
                  funds to US$9 billion as at June 16, up 24.5 per cent
                  from the figure six months ago. Funds for emerging
                  markets as a whole, including Latin America, have risen
                  22.5 per cent to US$26 billion from six months ago.

                  Hongkong-based analysts say most of the money so far
                  has been from institutional investors. US-based retail
                  investors have just been slower to catch on.

                  "We do see some increased interest in Asian markets.
                  Our customers are looking at mutual funds as a vehicle
                  to invest in Asian markets," said Fanny Lum, marketing
                  director at Charles Schwab HK.

                  Charles Schwab, which operates one of the largest
                  mutual fund supermarkets in the US, said international
                  stock funds have attracted more new money so far in
                  June than any other stock fund category.

                  Just about half of all net inflows into stock funds at
                  Schwab this month have gone into international stock
                  funds, LAT reported the firm as saying.

                  Strong Funds in Milwaukee reported that its Asia
                  Pacific fund has seen its total assets double thus far
this
                  year, the paper said. More than half of the new money
                  arrived in the first 17 days of June.

                  Franklin Templeton, American Century and Newport
                  Funds also reported increased foreign fund buying in
                  recent weeks, the report said.

                  The current rally helps. The typical US stock fund is up

                  7.9 per cent. By contrast, average emerging markets
                  funds, which embrace markets in Asia and Latin
                  America, are up 31.6 per cent year to date.

                  Some fund managers believe more money could flow
                  into emerging markets if there is little fallout from an

                  expected rate hike in the US.

                  "There has been more money from asset-allocators,
                  particularly for our clients with Asia dedicated funds
                  but it hasn't been a whole lot of money," said Andy
                  Xie, managing director at Morgan Stanley Dean Witter.
                  "A lot of global fund managers are waiting on the
                  sidelines to see what happens when the Fed raises
                  rates."

                  How much money ends up Asia's way will depend on
                  how Asian markets react to a Fed rate hike. As
                  investment managers here said, the US market must
                  underperform Asia for a prolonged period for that to
                  happen in a big way.