Asian mar­kets up as Deutsche fears ease

The Myanmar Times - - International Business -

ASIAN mar­kets ral­lied yes­ter­day with fi­nan­cials up on eas­ing fears about the fu­ture of Ger­man gi­ant Deutsche Bank af­ter a source said it was near­ing a deal to slash a multi-bil­lion-dol­lar US fine.

Traders fled for cover last week af­ter US of­fi­cials slapped the lender with a US$14 bil­lion charge over its role in the subprime mort­gage cri­sis.

How­ever, news on Septem­ber 30 that the Ger­man bank was near an agree­ment to pay a much more man­age­able $5.4 bil­lion to re­solve the case lifted mar­kets.

“A lot of the mar­ket sen­ti­ment has im­proved be­cause ob­vi­ously peo­ple were wor­ried that Deutsche Bank might be go­ing to re-cre­ate the Lehman mo­ment,” said An­drew Sullivan, manag­ing di­rec­tor for sales trad­ing at Haitong In­ter­na­tional Se­cu­ri­ties Group in Hong Kong, re­fer­ring to the US bank whose fall pre­cip­i­tated the fi­nan­cial cri­sis.

“The fact that Deutsche Bank ac­tu­ally came out and said it’s well cap­i­talised and close to se­cur­ing a deal with US Depart­ment of Jus­tice over that fine has given the mar­ket more con­fi­dence that we’re not go­ing to have an­other break­down in the global bank­ing sys­tem,” he said.

In Ja­pan, the Nikkei ended 0.9 per­cent higher, with in­vestors brush­ing off the closely watched Tankan sur­vey show­ing Ja­panese busi­ness con­fi­dence at its low­est in three years.

Hong Kong gained 1.2pc, Syd­ney closed 0.8pc higher and Jakarta put on 1.3pc. There were also gains in Taipei and Manila. The ad­vance tracked a rally on US and Euro­pean mar­kets.

In­vestors also wel­comed the week­end re­lease of a gauge of Chi­nese fac­tory ac­tiv­ity that in­di­cated con­tin­ued im­prove­ment in the world’s num­ber two econ­omy.

Among the main winners were banks, with Syd­ney-listed Com­mon­wealth Bank up 1.5pc, while HSBC was up 1.6pc in Hong Kong. Mit­subishi UFJ Fi­nan­cial Group added 0.4pc in Tokyo.

Shang­hai, Seoul and Kuala Lumpur were closed for pub­lic hol­i­days.

In cur­rency mar­kets, the pound slid against the dol­lar af­ter Bri­tish Prime Min­is­ter Theresa May set a timetable to leave the Euro­pean Union by 2019.

The an­nounce­ment sets up Bri­tain for years of horse­trad­ing af­ter June’s shock ref­er­en­dum vote to leave the EU.

Ster­ling fell to $1.2870 – its low­est since June while it also eased to 1.1446 eu­ros.

“We’re back to the Brexit risks,” said Vishnu Varathan, a se­nior econ­o­mist at Mizuho Bank in Sin­ga­pore. –

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