Singapore said it was not aware of a plan by Southeast Asian nations, backed by Japan, China and South Korea, to set up a multi-billion dollar fund to buy toxic debt and help the region's banks hit by the financial crisis. Philippines' President Gloria Macapagal Arroyo said on Wednesday the countries have agreed to set up such a fund and the World Bank has committed to provide $US10 billion to the fund.
However, a World Bank official said the bank has no plans to contribute to the fund, and the Asian Development Bank said it was too early to talk of contributions to the facility because the region remains economically strong. ''We are not aware of any proposal for the ASEAN+3 nations to set-up a multi-billion dollar fund to buy toxic debts and help the region's banks,'' a spokesman from Singapore's finance ministry said late.
ASEAN+3 refers to the 10-member Association of South East Asian nations, and Japan, China and South Korea.
Governments around the world have pledged around $US3.2 trillion in a variety of schemes to combat the worst global financial crisis in decades that has toppled financial institutions in the United States and several other countries.
The crisis has provided plenty of reminders to Asia of its own financial crisis a decade ago, when currencies in several countries crashed and foreign investors fled the region.
It was not immediately clear why Arroyo made the announcement, rather than Thailand, the current chairman of ASEAN. A Thai official said it could be because of political problems in the country.
East Asian countries earlier this year proposed an $US80 billion currency swap agreement, expanding a much more modest agreement that was set up in the wake of the 1997/98 Asian financial crisis to protect any country facing a balance of payments crisis.
Arroyo also reiterated that the ASEAN plus 3 grouping would hold a meeting on the sidelines of the Asia-Europe summit in Beijing next week to discuss how the crisis was affecting the region.
ASEAN comprises of Indonesia, Malaysia, Singapore, Brunei, Vietnam, Myanmar, Laos, Thailand, Cambodia and the Philippines. - Reuters Could this be the reason why Asian bourses is being sell-down today? Malaysia in denial of a recession is down 1.61%, Singapore admittedly in recession is down 3.62% while Indonesia is down 4.36%. Obviously, we are still resilient if you looked at the percentage of the decline, so to speak. But if you take a look at the broader market, decliners again outnumbered gainers by 2.5:1 with dwindling volume. Second liners and third liners seemed to be taking the wrath of this selling force over the past few days. What does this means to us? If I looked at all the parameters available before me ie the velocity of this sell-down in relation with the ringgit, there is another pull out by foreign funds ahead of the transition. We are in for another bout of consolidation with more downside. Gloomy picture. Our real economy does not help either. Totally stalled since last year. Hopeless. Hang on to your cash in Singapore currency. Ringgit is going to weaken further. Continue to short the futures on strength. Only place to make some money. That's all for now. Happy hours awaits me...