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Asia's bull run ends in 2008 with record falls
(Agencies)
Updated: 2008-12-31 15:30 In China, only 6 percent of the 25,000 investors participating in one survey reported this week said they had made a profit from stock trading in 2008.
Nearly two-thirds said they had lost 70 percent of their investments or more, according to the survey by the Shanghai Securities News, a newspaper affiliated with the stock exchange. Many Asian hedge funds, meanwhile, took a drubbing and closed shop by the dozens, with their traditionally long bets on the markets' moves souring amid the furious sell-off. Whether 2008's lows, reached mostly in October and November, hold in 2009 is a matter of debate. But most investment strategists have written off any chance of a major rebound in at least the first six months of the new year, when company earnings could prove especially bleak. And there could be more violent swings if companies aren't done with the massive clean up of debt-laden balance sheets that began last year. Trillions of dollars in assets may still need to be shed in the global financial system because there may not be enough capital to shore it up, said Paul Schulte, a chief Asia equity strategist at Nomura International in Hong Kong. How China's economy shapes up will also be closely watched. Fourth quarter growth in 2008 is already forecast to drop to as low as 2 percent from nearly 12 percent in 2007. "China's economy is obviously at a turning point. There are too many uncertainties, and past huge losses have made investors increasingly cautious," said Cheng Weiqing, an analyst at Citic Securities in Beijing. Asia's fortunes could depend greatly on the mood of consumers, especially in the US, whose appetite for cars, electronics and other goods have been the lifeblood of regional growth. Credit markets still haven't returned to normal. Traders are hopeful economy-boosting measures worth hundreds of billions of dollars by governments around the world will help on that front, bringing about some recovery by the second half. "The landscape has been completely changed," said Chan of Macquarie. "People's confidence needs to be rebuilt, and that has to come through the stimulus packages around the world that are being put out by various governments." Many still are bracing for even more selling. "For 2009, we will see a lot more pain in Asia," said Daley, who doesn't see stock markets rebounding until 2010, at the earliest. "The desperate hunt for a bottom is futile, because when we get to the bottom, get used to it," he said. "We're going to be here for a while."
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