4 S.E. Asian nations are good to invest in again: ING Barings

Asian Economic News, August 20, 2001

SINGAPORE, Aug. 16 Kyodo

Indonesia, Malaysia, the Philippines and Thailand, shunned by foreign investors in recent years, are coming back to life again as good markets to invest in, ING Barings said Thursday.

In a new report, the major European financial group said the four economies have made considerable progress in terms of domestic corporate restructuring even though external demand remains weak.

It said this means that when external demand eventually picks up, the ensuing rallies expected in these markets ''have a greater chance of being sustained.''

But ING Barings also warned that timing for investments will be crucial as resolutions to the current political risks can be so swift that little time may be left for investors to react.

Regarding Indonesia, the financial group said the lineup of President Megawati Sukarnoputri's new cabinet, announced last week, ''represents a positive first step.''

It also said the International Monetary Fund's anticipated decision in September to release the next tranche of its $5 billion loan to Jakarta ''is likely to serve as an important milestone to judge the effectiveness of the new team.''

On Malaysia, ING Barings said the market has already bottomed out as any potential negative news has been discounted. It added that the changing landscape backed by the fading risk of ringgit devaluation and introduction of new fiscal stimulus measures are also welcome developments.

While noting that the economic outlook in the Philippines is dependent on political action, the financial group said the country's reform momentum, which had been sidetracked by political concerns in the second half of last year, has been regained.

ING Barings said the Thai market has factored in bad news and a recent shift in liquidity flows favors equities. But it cited as areas of concern slow debt restructuring, overvalued collateral and a lack of good-quality credit demand.