This Chronology of the crisis is based on information from several news sources (Reuters, Wall Street Journal, New York Times, CNNfn, Financial Times, Bloomberg,etc. 

February

    February 5, 1997 -  Somprasong is first Thai Company to miss payments on foreign debt.

March

    March 10 - The Thai government says it wil buy $3.9bn in bad property debt from financial instituions but renegs on this promise. IMF Managing Director Michel Camdessus says: "I don't see and reason for this crisis to develop further".
    March 28 - The Malaysian central bank restricts loans to property and stocks to head off a crisis.
    March - Sammi Steel, a Korean conglomarate, fails provoking fears of a looming corporate debt crisis.

April

Nothing for April

May

    Early May, 1997 - Japanese officials, concerned about the decline of the yen, hinted that they might raise interest rates. The threat never materialized. But it proved to be one of the first signs of the Asian crisis.  The Japanese threat shifted the decisions of global investors, who immediately began to sell Southeast Asian currencies, setting off a tumble not only in the currencies but in the local stock markets as well.
May 14-15,  1997 - Thailand's baht currency is hit by a massive attack by speculators who decided Thailand's slowing economy and political instability meant it was time to sell. Thailand and Singapore jointly intervene to defend the baht.
The Philippines is affected. The central bank raises the overnight rate 1-3/4 percentage points to 13 percent and dumps dollars.
     May 23 - Moves to save Finance One, Thailand's largest finance company, fail.

June

June 19 - Amnuay Viravan, staunchly against devaluing the baht, resigns as Thailand's finance minister.  The PM Chavalit Yongchaiyudh says: "We will never devalue the baht".
The resignation has immediate financial impact in the Philippines, where the overnight rate rises to 15 percent.
June 27 - The Thai central bank suspends operations of 16 cash-strapped finance companies and orders them to submit merger or consolidation plans.
June 30 - Thai Prime Minister Chavalit Yonchaiyudh assures the nation in a televised address there will be no devaluation of the baht.

July

    July - Korea's third largest car maker Kia suffers credit crunch and asks for emergency loans.
July 2 - The Bank of Thailand announces a managed float of the baht and calls on the International Monetary Fund for "technical assistance."  The announcement effectively devalues the baht by about 15-20 percent. It ends at a record low of 28.80 to the dollar.  This is a trigger for the East Asian crisis.
In Manila, the Philippines central bank is forced to intervene heavily to defend the peso.
July 3 - The Philippine central bank raises the overnight lending rate to 24 percent from 15 percent.
July 8 - Malaysia's central bank Bank Negara has to intervene aggressively to defend the ringgit. The intervention works and the currency hits a high of 2.5100/10 after a low of 2.5240/50.
July 11 - The Philippine central bank says in a statement it will allow the peso to move in a wider range against the dollar. The IMF backs the move and Managing Director Camdessus says he would recommend the IMF board approve the Philippines' request for an extension of its Extended Fund Facility (EFF).
In Indonesia, the rupiah is starting to be affected. In a surprise move, Jakarta widens its rupiah trading band to 12 from eight percent.
July 14 - The IMF offers the Philippines almost $1.1 billion in financial support under fast-track regulations drawn up after the 1995 Mexican crisis.  The Malaysian central bank abandons the defense of the ringitt.
     July 17 - The Singapore monetary authority allows the depreciation of the S$. It falls to lowest level since February 1995.
July 24 - Currency meltdown.
The ringgit hits 38-month low of 2.6530 to the dollar. Malaysian Prime Minister Mahathir Mohamad launches bitter attack on "rogue speculators."
The Hong Kong dollar remains steady, but territory later reveals US$1 billion was spent on intervention during a period of two hours on an unspecified day in July.
July 26 - Malaysian PM Mahathir names hedge fund manager George Soros as the man responsible for the attack on the ringgit. He later brands Soros a "moron."
    July 28 - Thailand calls in the IMF.

August

Aug. 5 - Thailand unveils austerity plan and complete revamp of finance sector as part of IMF suggested policies for a rescue package. Central bank suspends 48 finance firms.
Aug. 11 - The IMF unveils in Tokyo a rescue package for Thailand including loans totaling $16 billion from the IMF and Asian nations.
Aug. 13 - The Indonesian rupiah begins to come under severe pressure. It hits a historic low of 2,682 to the dollar before ending at 2,655. The central bank actively intervenes in its defense.
Aug. 14 - Indonesia abolishes its system of managing the exchange rate through the use of a band andallows it to float. The rupiah plunges to 2,755.  Bank Indonesia tries mopping up liquidity with high interest rates.
    Aug 15 - Speculators attack Kong Kong dollar; overnight interest rates up 150 basis points from previous day to 8%. Stock market sharply lower.
Aug. 16 - An unnamed Beijing source tells a local Hong Kong newspaper that China is prepared to use US$50 billion to defend the Hong Kong dollar.
Aug. 20 - IMF approves a $3.9 billion credit for Thailand. The package now totals $16.7 billion. Brunei later adds $500 to the bailout package, bringing it to a total of $17.2 billion.
    Aug. 23 - Malaysian PM Mahathir Mohamad blames US fianncier George Soros for leading attack on East Asian currencies: "All these countries have spent 40 years trying to build up their economies and a moron like Soros comes along".

September

Sept. 4 - Carnage in the Philippine peso continues. It falls to a record low of 32.43 to the dollar before central bank intervention helps it up slightly to end at 32.38.
Malaysian Ringgit breaks through 3.0000 to the dollar barrier.
Mahathir delays several multi-billion dollar construction projects.
Sept. 16 - Indonesia says it will postpone projects worth 39 trillion rupiah in an attempt to slash the budget shortfall.
Sept. 20 - Mahathir tells delegates to the IMF/World Bank annual conference in Hong Kong that currency trading is immoral and should be stopped.
Sept. 21 - Soros says "Dr. Mahathir is a menace to his own country."

October

Oct. 1 - Mahathir repeats his siren call for tighter regulation, or a total ban, on forex trading. The currency falls four percent in less than two hours to a low of 3.4080.
Oct. 6 - The Indonesian rupiah hits a low of 3,845.
Oct. 8 - Indonesia says it will ask the IMF for financial assistance.
Oct. 14 - Vietnam, bowing to months of pressure on its dong currency, doubles the permitted trading range to 10 percent either side of the daily official rate.
     Devaluation of the Taiwan dollar.
Oct. 17  Friday - Malaysia presents a belt-tightening budget to try to stop the economy sliding into recession.

Oct. 20-23 Monday - Thursday - The Hong Kong stock market suffers its heaviest drubbing ever, shedding nearly a quarter of its value in four days on fears over interest rates and pressures on the Hong Kong dollar. The fall, more severe than the 1987 crash, forces the Hang Seng index 23.34 percent down to 10,426.30 at Thursday's close, after 13,601.01 the previous Friday.
    The devaluation of the Taiwan dollar the previous week, the latest in a string of Southeast Asian currency devaluations, created doubt about Hong Kong changing its long-standing peg to the U.S. dollar."I think the biggest thing to scare Hong Kong was the devaluation in Taiwan," said John Bender, vice president at HSBC James Capel. "[Taiwan] is a country with substantial foreign exchange reserves." In short, Taiwan is a lot like Hong Kong and Taiwan  was unable to keep up the link. Taiwan's dollar has fared poorly since the devaluation, dropping about 5 percent, and is currently  valued at 30.23 to the U.S. dollar. The Hong Kong dollar is at about 7.50 to the U.S. dollar.

Oct. 27 - Monday . After regaining 718 points on Oct. 24, the Hang Seng loses another 646.14 points or 5.80 percent to 10,498.20. The loss ripples through global markets. On Wall Street, the Dow Jones industrial average posts its single-biggest point loss ever, falling 554.26 points or 7.18 percent to 7,161.15. The Nasdaq plunges 115.43 points and the S&P 500 index tumbles 64.65 points. The decline is so steep it prompts stock exchange officials to suspend trading.  Stock markets throughout Latin America suffered record losses Monday as Asia's markets crisis rippled to other vulnerable emerging markets and investors frantically sold their holdings. Stock prices in  Brazil, Argentina and Mexico saw their biggest single-day loss.

Oct 28 - Tuesday. 

Oct 29 - Wednesday.

Oct 30 - Thursday. Speculators scenting a  fresh kill outside Asia's wounded financial markets  took aim at Latin American stocks and currencies on Thursday, causing heavy losses in Brazil and Argentina.  Fears about the value of Brazil's real currency and a liquidity crunch in its banking system quickly spread to neighboring Argentina and also infected Mexico's volatile markets -- sending prices to their lowest levels in months.

Oct. 31. Friday.  IMF gives Indonesia $23B financial support package. The International Monetary Fund announces a $23 billion multilateral financial package involving the World Bank and Asian Development Bank to help Indonesia stabilize its financial system. The United States is willing to lend about $3 billion to Indonesia to back up the loan from the International Monetary Fund to help Indonesia stabilize its financial system.
    Concerns over the fate of world financial markets dominate U.S. stocks in a week that saw both record losses and record gains posted in record volumes of trading. After several wide gyrations, stocks closed on a positive note Friday, but ended the week well below where they were a week ago.The Dow Jones industrial average gained 60.41 points to close at 7,442.08, some 273.33 points down from last' Friday's closing level of 7,715.41.
    The market started the day with a boost from a 2.5 percent gain in Hong Kong overnight. The blue-chip Hang Seng index, whose swings had been at the heart of world markets' recent troubles, rose 260.92 to close at 10,623.78. It was followed by markets in Tokyo, where the Nikkei 225 index was up 94 at 16,458.94, and Singapore, where the Straits Times industrials index gained 44.68, or 2.9 percent, to 1,586.07.
    Brazilian shares rose Friday  after the nation's central back nearly doubled interest  rates to fight off currency speculators.  In early trading, the Sao Paulo exchange's  benchmark Bovespa index gained 57 to 8912.  Brazil's Central Bank raised its basic interest rate  late Thursday to 3.05 percent monthly from 1.58 percent. The government was pushed into the move as speculators began an attack on the country's currency, the real, sensing that it would suffer the same fate as  Asian currencies driven ever downward. A presidential spokesman said that the Central Bank already had spent $5 billion in defending the currency.

Nov 3 - Monday. Asian stock markets rallied on Monday as a financial aid package for Indonesia helped restore calm to the region, enabling investors there to refocus on their domestic markets and helping European markets get off to a good start. On Monday, Hong Kong saw some of the most dramatic gains, with the Hang Seng index rising 2.62 percent at the opening before zooming ahead amid fresh interest in China related shares.  The Dow Jones Industrial Average soared 3.12 percent, or 232.31 points, on Monday to 7,674.40 spurred on by advances in Asian markets..

Nov 4 - Tuesday. Asian stock markets got an early boost on Tuesday from Wall Street's powerful rally, but a big retreat in Hong Kong spilled over to other markets in the region, erasing many of the early gains. The recent gains in Asia reflected optimism some calm may be returning to the region after Indonesia agreed on a financial aid package with the International Monetary Fund (IMF). But many traders remained wary about whether the gains could be sustained.

Nov 5. Wednesday.

Nov 6 -  Thursday The Bank of Korea once again intervened Thursday in an attempt to halt the local currency's slide versus the dollar. The dollar is currently quoted at 973.65 won. Traders said the dollar rise versus the won reflected the U.S. currency's strength versus the yen. 'The dollar's sharp rise against the Japanese yen in global trade  boosted the U.S. currency against the won in Korea,' said a dealer at  SeoulBank. In addition, dealers said sentiment about South Korea is negative, based on  media reports in the Western press stating that South Korea's economic crisis is set to get worse. International Monetary Fund Managing Director Michel Camdessus said Thursday the fund's multi-billion dollar financial support package for Indonesia should break a vicious cycle of economic destabilization in Asia.
    Camdessus said that although South Korea has been affected by the crises in Thailand and in Indonesia, the measures the South Korean government has taken seem adequate so far.Despite continuing turmoil on South Korea's financial markets, Camdessus believes the country will be spared the sort of financial crisis which hit Indonesia, although the IMF is ready to provide help if needed. 'I don't believe that the situation in South Korea is as alarming as the one in Indonesia a couple of weeks ago.' We are following (the South Korea situation) very attentively and with an attitude of confidence,' he said.
    However, the IMF is gloomier on the outlook for Thailand, confident the IMF's $17.2-billion assistance will work, but only once the country's political  instability is over. Thursday, rival political parties racing to form Thailand's new government said they had gathered enough Parliament seats to form the country's next  government, lending a farcical air to the proceedings.  The opposition Democrat Party led by former Prime Minister Chuan Leekpai said its government would consist of seven parties encompassing 196 members of Parliament, making it one parliamentary seat short of a majority. However, the ruling coalition of Prime Minister Chavalit Yongchaiyudh  announced it would form the next government with a coalition consisting of 198 members of Parliament.
    Brazilian shares dropped 3.74 percent to 9,615 points in early trade as investors  dumped equities on continuing uncertainty in the local financial markets after two weeks of global turmoil, traders said.  After the shakeup in worldwide markets the last few weeks, business leaders' biggest concern was that a collapse of the Brazilian currency would devastate  the economy and drag all of Latin America into a  prolonged recession like that which followed the 1994 Mexican peso debacle. Brazil's central bank nearly doubled interest rates  in October in an attempt to fight off currency speculators.  Shares on the nation's stock exchange initially rose after the hike, but now seem to be running scared.

Nov 7 - Friday. Asia stocks nosedived on Friday as currency jitters shook South Korea and high interest rates and falling property prices rattled HongKong.  Hong Kong stocks fell four percent and plunged through the 10,000-point barrier, before recovering slightly. The Hang Seng Index finished down 2.96  percent, or 308.06 points, at 10,104.50. "However good the monetary authorities in Hong Kong are at defending the (Hong Kong/dollar) peg, interest rates will stay high here because of the problems in Korea, Thailand and Indonesia,"  a banker said.
    Heavy losses in Asia and the U.S. extended to Latin American markets on Friday, where investors in Brazil and Mexico ran scared from the global turmoil. Brazilian shares closed down 6.38 percent, off  earlier lows but still sharply weaker as players shed positions on drops in global equities and spill-over from wobbly Asian financial markets, brokers said. The mood was further darkened by renewed concerns that Brazil's real may be the next emerging market currency to come under speculative attack as a result of its looming budget and current account deficits.  The Mexican bourse took its cue from the shaky  Brazil market and also posted sharp losses. The leading share IPC index ended down 115.72 points, or 2.42 percent, at 4,664.49 points.  The story was continued in Argentina, where  stocks swooned in sympathy with an international market sell-off. The blue-chip MerVal index fell 5.1 percent to 651.18, wiping out gains mustered earlier in the week.  Finally, Venezuela was also hit by the global losses, as the key Bursatil index dropped 319.92 points to close at 9,211.41

Nov 8 - Saturday. Market prices fell sharply for a second day Saturday as foreign investors pulled out, fearing South Korea faced an  economic crisis on the scale of Southeast Asia's. The government blamed the drop on "speculative foreign press reports."  The benchmark Korea Composite Stock Price Index fell 19.93 points, or 3.9%, to end Saturday's half-day trading at 495.70. On Friday, the index plunged a record 6.9% to 515.63. Declining issues outnumbered advancers 684 to 157. A total of 196 shares fell to daily permissible lows. In South Korea, the price of a stock is allowed to rise or fall no more than 8% a day. Continuing worries over the falling value of South Korea's currency, the won, led foreign investors to sell $71 million of shares in the half-day trading, the exchange said. They bought only $6.4 million. The currency has lost 14% of its value this year to reach an all-time low of 979.90 against the dollar Friday. On Saturday, the government protested recent foreign press reports that have suggested the country's financial turmoil may surpass the recent market meltdowns in Thailand, Indonesia and the Philippines. Officials at the Finance and Economy Ministry suggested that panic triggered  by "sheer speculative foreign press articles" was driving foreign investors out.  Those reports -- carried in major international publications -- have also  indicated South Korea's foreign reserves were dwindling and that the country may also need such assistance from the International Monetary Fund. IMF head Michel Camdessus rejected that assessment Thursday, but said the IMF is ready to help if needed. The fund so far this year has organized multibillion-dollar bailout programs for Thailand and Indonesia and $1 billion in aid for the Philippines. South Korea's woes began when its trade deficit ballooned beginning last year and the value of its currency slipped. Then, Southeast Asian market shock waves reached the country. That came at a time the market was saddled with billions of dollars of bad loans in the wake of a series of major bankruptcies. International ratings agencies have downgraded South Korea's foreign debt --  estimated at more than $100 billion, about 80% of which is said to be  short-term. Interest rates soared. The stock market plummeted 28% this year to reach a five-year low at the end of October. The central Bank of Korea repeatedly intervened and defended the won by  selling dollars from its estimated $30.05 billion foreign currency reserves. It  hasn't revealed how much it spent. Despite such efforts, the markets started falling again Thursday. Jitters were renewed when two more South Korean conglomerates were declared in financial trouble in the past week, analysts said.
    International investors are dismissing South Korea's claims  that its financial system is sound -- and hastening the system's deterioration in the process. The latest market action highlights a shift in focus by increasingly risk-averse  global investors, who are turning their attention to South Korea's financial  position, and becoming frightened by what they see. It also raises the specter of a new round of North Asian financial turmoil that could be even more  violent than the Southeast Asian crisis still raging. South Korea is the world's 11th-largest economy larger than Thailand, Indonesia and Malaysia put  together -- and the prospect of a financial crisis has put everyone from  Japanese exporters to investors in Latin American debt on edge.  "We are convinced that the buildup of selling pressures on the Korean won will explode in the immediate term," Daniel Lian, head of Asian research at  ANZ Investment Bank, told clients in a weekend fax. "We foresee a 20% instant devaluation if the managed regime were to turn floating."
     And it wasn't just Korean debt that fell on worries about the country. Taiwan's stock and currency markets plunged on Friday and Saturday as traders cited fears that a collapse in the won would wipe out Taiwan's competitiveness against South Korea in key industries such as electronics and refining. A weaker won would likely force Japan to weaken the yen against  the dollar as well, in order to keep its exports competitive in world markets, currency traders say.

Nov 10 - Monday. Turmoil in global financial markets took its toll on Asian stocks again on Monday, but the losses were not as dramatic as in recent sessions as even bearish Hong Kong managed to climb briefly into positive territory before sliding back. Investors remained generally bearish about the region's outlook, citing uncertainties over the near-term trend for regional currencies as one of many factors dampening sentiment.But at least two government leaders tried to inject a note of optimism into the future. Hong Kong Chief Executive Tung Chee-hwa said the territory's financial crisis would be short-lived and reiterated his pledge that the local dollar's peg to the U.S. dollar would not be abandoned. Wall Street's 1.33 percent Friday fall set the tone for Monday's trading in Asia. News that the U.S.unemployment rate had fallen to 4.7 percent in October -- its lowest level in 24 years -- triggered fears of renewed inflation.
    Brazil on Monday unveiled an $18 billion budget belt-tightening plan designed to reassure investors it was prepared to swallow whatever bitter medicine was necessary to defend the economy against attack. The measures, which include a 10 percent hike in income tax, a 15 percent cut in 1998 federal spending and almost 33,000 job losses in the public sector, are Brazil's latest attempt to shore up its defenses against global financial turmoil. Last month, the Central Bank almost doubled prime interest rates to an annualized 43.3 percent to ward off speculative attacks against the real as currency traders turned their attention from Asia to Latin America's economic powerhouse. Brazil is seen as vulnerable to devaluation pressures because of its wide current account deficit, its bleeding public sector accounts and its overvalued real currency. Market reaction to the plan was positive but cautious. At the Sao Paulo stock exchange blue chips retreated from earlier highs to end up 1.96 percent. Bankers described the government plan as aggressive but warned the measures would slow economic growth in 1998, and might even lead to recession. Higher taxes are unlikely to boost Cardoso's popularity as he heads towards October 1998 with re-election in mind. But, having staked his political future on the continuing success of the "Plano Real" economic stabilization plan which brought hyperinflation down to just 10 percent last year, Cardoso has vowed to defend the real currency at all cost.

Nov 11 - Tuesday.  Asia stocks ended mixed on Tuesday, although the small pluses and minuses belied the underlying drama in some markets. But it was Hong Kong that garnered much of the attention as wide-spread rumors of financial problems at some banks was met with a well-orchestrated round of assurances from local officials and bank executives that all was well. The Hang Seng Index ended little changed up 0.11 percent, or 11.29 points, at 10,004.13, after swinging between the day's high of 10,251.65 and a low of 9,967.42.
    While already down over 15% this year due to financial instability at home,  the South Korean won is expected to suffer more blows as the Japanese yen continues to fall against the dollar, economists say.  After opening at 999.90 won to the dollar, the South Korean currency  recovered somewhat to 989.8 won/dollar at Tuesday's close, on repeated  intervention by the central Bank of Korea (BOK).  Although the central bank managed to keep the dollar from rising about 1,000 won, traders and economists say the local currency will soon fall far below  that psychologically important level on overwhelmingly bearish sentiment toward the country's financial industry. And worsening troubles in neighboring Japan only mean more pressure on the  local currency, they say.'A slow gradual depreciation of the won isn't going to be erased quickly but will persist for some time,' says Tim Condon, regional economist at Morgan Stanley Asia Ltd. in Hong Kong. 'If we see a sharp weakening of the yen against the dollar, it would be accompanied by a move in won' versus the dollar. The two largest Asian economies share many of the same exports, including electronics, steel, semiconductors, chemicals and automobiles. Over 50% of  Korea's exports compete directly with Japanese products, according to analysts. Hence, the won's moves against the dollar often mirror the yen's trading  movements versus the U.S. currency, as local exporters vie to make their products more attractively priced compared with the products of their Japanese rivals. 'Any positive effects of the won's depreciation are effectively cancelled out by the yen's decline versus the dollar,' says Kim Joo-hyung, head of research at LG Economic Research Institute in Seoul. 'If the yen was stable and the won depreciated by around 10%, then the price competitiveness of Korean export products would be greatly enhanced.' Meanwhile, the increasingly shaky banking sector and battered financial markets are undermining a recovery of the won.
The South Korean won's prolonged decline started to accelerate after Kia  Group's financial troubles arose on July 15. Since the eighth-largest conglomerate's troubles surfaced, several more of South Korea's largest conglomerates collapsed or fell into financial turmoil. In total, eight of the country's 30 largest conglomerates went bankrupt or are facing severe financial strains this year.   An official at the Ministry of Finance and Economy said Monday, even if the won continues to fall sharply versus the dollar, the government  won't alter or abandon its market-average system of currency trade.  'I don't think its possible,' Chin Young-wook, director of international finance at the ministry, told Dow Jones. 'If we abandon our current system, we'd have  to freely liberalize the market completely. It's too early to do that in view of our economic status right now and in view of the fact that the won isn't fully convertible now.'  Adopted in March 1990, the won is kept in a band of 2.25% above and below a base rate set daily by the central bank. The daily base rate, or the market average rate, is calculated from the weighted average of the previous day's transactions.
    South Korea's Ministry of Finance and Economy said Tuesday it  plans to put forth all efforts to stabilize the country's currency against the U.S. dollar by resolving concerns about financial market turmoil. 'The dollar has rapidly risen against the won recently because of bearish sentiment toward the domestic financial market,' said a ministry spokesman.  'So, the government will use all its means to calm such worries.'  However, the official declined to disclose what means the government would  take to stabilize the current jitters. Local newspapers, meanwhile, said the government may soon announce a  package of measures, which includes widening overseas borrowings by state-run corporations and a restructuring in merchant banks.

Nov 12. Wednesday. Asian stock markets once again felt the scourge of currency and interest rate jitters on
Wednesday, resulting in steep declines in Japan and Hong Kong and prompting early morning dips in Europe. In Tokyo, the benchmark Nikkei 225-share index fell to its lowest level in more than two years as the yen slid against the U.S. dollar. The Nikkei finished 2.73 percent, or 433.06 points, lower, at 15,434.17. Interest rate jitters sent the Hang Seng Index down nearly five percent in afternoon trade, dragging other less active Asian markets with it. The Hang Seng recovered slightly to end 3.96 percent, or 396.22 points, lower at 9,607.91.
    Other markets in the region turned in mixed performances. Shares in Kuala Lumpur, Manila, Seoul, Shanghai, Shenzhen, Sydney and Wellington all ended the day lower, while markets in Bangkok and Taipei rose. In Tokyo, the Nikkei Stock Average dropped 2.7%, or 433.06 points, to 15434.17, the  lowest close since July 1995. In Hong Kong, economic worries continued to dog the market.  "I think the deflation trend in Hong Kong will continue," said Tina So, a fund  manager at Schroder Investment Management (HK) Ltd. "Since we cannot
adjust our foreign-exchange rate to regain competitiveness, we need to have that adjustment internally through lower wages, lower inflation, and also lower rentals."
    U.S. stocks suffered heavy losses Wednesday on lingering investor concerns about a world financial crisis affecting markets from Hong Kong to Brazil. The Dow Jones industrial average lost more than 155 points, closing at about 7,400. Stocks were hit by heavy selling in the last hour of trading after the Federal Reserve left key interest rates unchanged as had been expected.
    After tripping circuit-breakers that halted trading, Brazilian stocks remained depressed as they resumed trading late afternoon Wednesday. Investors, already worried about a fiscal austerity package unveiled by the government earlier this week, were unnerved by another sharp decline in the  Asian stock markets overnight. Trading on the Sao Paulo Stock Exchange was halted in the afternoon when  the benchmark Bovespa index fell 10% to 7841 points.  Traders said the mood before trading opened Wednesday was pessimistic  following Tuesday's 3.3% drop and continued concerns about the economic effect of the fiscal austerity package announced by the Brazilian government  Monday.

Nov 13.- Thursday.  World stock markets regained their composure following Wednesday's  turbulence that rippled across Asia, Europe and Latin America. Asian stock markets went on a rollercoaster ride on Thursday after a sharp sell-off in New York overnight further unnerved the region. By the close, the volatile Hong Kong market had swung back into positive territory, although the rest of the region failed to shake off the gloom.A firmer yen enabled Tokyo stocks to recover from early lows, although dealers agree the currency remains vulnerable to a strong U.S. dollar and that the stock market is still a hostage to Japan's weak economy. Contributing to the more upbeat mood, International Monetary Fund Managing  Director Michel Camdessus dismissed speculation about a possible banking crisis in Hong Kong, saying, "These are solid institutions. I would be very surprised if a systemic banking crisis was to emerge in Hong Kong." Federal Reserve chief Greenspan said that turmoil in Asian markets is "cause for concern," but it has "fallen short of anything that would have really serious threats" to the U.S. economy.  Although Latin American markets had a volatile day, Brazil closed 3.2%  higher after a 10.2% drop a day earlier, Mexico gained 1.2% and Argentina rose 1.3%. And the Dow Jones World Stock Index rose 0.98, or 0.62%, to 160.00. 

Nov 14 - Friday.  U.S. stock markets ended the week with flying colors, as Wall Street took its  tone from friendly inflation data at home and put  financial turmoil in Asia and a growing conflict with  Iraq behind for a day.   The Dow Jones industrial average gained 84.72  points, or 1.13 percent, to close at 7,572.48.  Wall Street once again kept a close watch on  Asian markets, where on Friday it was Japan's turn to stage a major sell-off. Tokyo's key Nikkei 225 index  lost 344.75 points, or 2.23 percent, to 15,082.52, amid rising concerns about the health of the financial system supporting the world's second-largest  economy. The Nikkei 225 is down 753.84 points, or 4.76 percent on the week. But Hong Kong ignored the Japanese market's meltdown as the Hang Seng index rose 236.55 points, or 2.43 percent, to 9,957.33. Faced with a potential financial crisis, South Korea's majority party vowed Friday to pass a reform package it says will clean up debt-ridden banks. The proposed reform -- the first of its kind in half a century -- calls for a  major shakeup of the nation's banking industry to encourage foreign investors to return to South Korea. The package would set up a single watchdog agency, under the Finance and Economy Ministry, that would replace three agencies currently overseeing banks, brokerage houses and insurance companies. It also lays a foundation for mergers and acquisitions among the nation's troubled merchant banks.

Nov 17 - Monday. There was a sharp recovery in Tokyo's stock market, where the Nikkei 225 index soared 1,200.80, or 7.96 percent, to 16,283.32. Tokyo's  rally was due to investor hopes that the Japanese government is taking active steps to help the country's troubled financial sector. The failure on Monday of the Hokkaido Takushoku Bank, the first of Japan's big banks to collapse under the weight of bad loans, is the latest -- and strongest -- sign yet that the Japanese government is prepared to allow market forces to reconfigure the  domestic financial landscape.  With at least 3 other banks among Japan's 20 largest in no better shape than Hokkaido Takushoku, and many regional banks in worse straits, the once-sacrosanct financial system is being pushed to modernize and consolidate.
    South Korea abandoned its defense of the battered won Monday,  sending the currency smashing through the psychological 1,000/dollar level. The sudden weakening of the won sent stocks plunging by more than 4 percent and put renewed pressure on money market interest rates, dealers said. Officials hinted broadly that economic factors had less to do with abandoning the line than political ones. A Bank of Korea official told Reuters the central bank was simply following a decision by the Ministry of Finance and Economy.The Ministry of Finance and Economy has been trying to get 13 financial reform bills passed in parliament before the session ends Tuesday. The bills have stalled over the opposition's unhappiness with two of the bills, which define a new role for the central bank and consolidate supervision of all financial sectors into one agency under the finance ministry. In Moscow, leading Russian shares bucked the general upward trend on European bourses and closed down as fears of further domestic turmoil outweighed positive news from Asia and New York. Bearish sentiment was not helped by news that leading market reformer Anatoly Chubais only narrowly survived dismissal over the weekend. Wall Street nearly recovered from its sharp losses three weeks ago, staging a  powerful rally on the back of an overnight surge in Japanese stocks. The Dow Jones industrial average gained more than 120  points to close at about 7,697.

Nov 18 - Tuesday. The failure to Pass Financial Reform Bills in Korea suggests that the IMF wiil be required to bail out Korea.  The failure of the financial reform bills to be passed by the National Assembly in their entirety is a bad sign. It now seems clear that, until the IMF is called in, there will be no flanking policy forthcoming to support the won. The Bank of Korea's retreat yesterday from active intervention to keep the currency stronger than KRW1000:US$ was a recognition of that fact.  The rest of the world has made it quite clear that the IMF must lead the way in formulating rescue packages. It is likely that the Korean authorities will request IMF assistance before the presidential elections on December 18.  The uncertainty surrounding Korea has, as expected, pressured regional currencies. The uncertainty surrounding Korea has, as expected, pressured all regional currencies. Hardest hit have been the Thai baht (down 3.5% since last Friday), the Philippine peso (2.9%), and the Malaysian ringgit (2.8%). The New Taiwan Dollar has weakened by 1.7%, the Indonesian rupiah by 1.0%, and the Singaporean dollar by 0.5%. These currencies are likely to continue to weaken until Korea requests IMF assistance. There were mixed signals from Asia  overnight, with Tokyo posting more solid gains but  Hong Kong ending in negative territory. The Nikkei  225 index rose 443.25, or 2.72 percent, to 16,726.57,  while the Hang Seng index lost 174.57, or 1.68 percent, to 10,245.18. Fallout from a sell-down on the Malaysian stock exchange and a weaker Singapore dollar gave Singapore shares a knock on Tuesday, dealers said. Malaysia's key Composite Index had lost more  than six percent by Tuesday's close, falling 45,20  points to 622.09. The Straits Times Industrials Index  followed, losing 9.64 points to 1,689.01 on a  combination of concerns about regional economies and selling of the Singapore dollar.
    Brazilian Finance Minister Pedro Malan denied Tuesday that  his government is contemplating any financing agreement with the International Monetary Fund to bolster markets hit hard by the global volatility in equities. Despite repeated denials by government officials of such an agreement, the presence of a four-member IMF delegation in Brasilia this week to study a broad fiscal package unveiled last week continues to fuel speculation. The visit has been described as "routine" by government  and IMF officials.  Mr. Malan also said his interview in Monday's editions of Argentine  newspaper La Nacion had been blown out of proportion. He was quoted as saying "an accord with the IMF would be positive for Brazil," which Brazilian newspapers took as a sign that an agreement was in the works.
 

Nov 19- Wedenesday. Deputy finance ministers meeting in Manila on Wednesday issued a statement that proposed the formation of a new mechanism that would enhance the  International Monetary Fund's role in identifying possible financial crises in Asia and addressing them when they happen. The communique from 12 Asian finance ministries, plus the U.S. and Canada,  the IMF, the World Bank, and the Asian Development Bank, said the framework for cooperation would include meetings at least twice a year. It didn't mention specific participants in the new mechanism. By the end of the two-day Manila meeting of deputies, no hard numbers emerged for the possible size of financing arrangements that would always be supplements to the resources put forward by the IMF.  On the need to establish a new mechanism for regional surveillance to  complement the IMF's global monitoring efforts, the deputies said the move  would help identify potential risks to financial stability. Exactly what form a cooperative financing arrangement will take also remains  unclear.  Several ministers said it would resemble the model used in October's Indonesia bailout, where individual countries pledged money toward a rescue that now totals nearly $40 billion. The pledges were contingent on the country adhering to an IMF program. Furthermore, donors pledged funds that could be tapped by the recipient country if the IMF's contribution runs out. The IMF was also asked by the deputies to come up with a short-term  facility, which U.S. Deputy Treasury Secretary Lawrence Summers said is  needed because the crises that are being seen now in Asia aren't balance of  payments problems, but confidence issues that can't be addressed in the same way as traditional IMF packages. Wednesday's joint communique suggested none of the months of acrimonious debate that followed Japan's efforts, starting in September, to champion a new facility for the region. Many Asian countries were quick to back the original Japan initiative to create a wholly Asian structure, a body that they said would be complete with a permanent secretariat and funding that might amount to US$100 billion. But the IMF objected - along with the U.S. and other Western members of the Group of Seven - to the idea. They said a new pool of money would simply add a target for speculators and create moral hazards, by indicating to countries that they might get aid even if they failed to adopt tough economic  reform.
    South Korea's new finance and economy minister said Wednesday he will form an emergency economic presidential advisory committee to tackle the country's current troubles, but he doesn't foresee the country requiring assistance from the IMF. The Korean stock market rallied after the news,  regaining some of the dramatic losses from Tuesday.  Shares closed up 7.93 points, or 1.6 percent, at 502.59. Finance and Economy Minister Lim Chang-yuel,  had taken over South Korea's top economic post just hours before, after having served as minister of trade, industry and energy. He replaced outgoing minister Kang Kyong-shik, who resigned in order to take responsibility for the crisis.Determined to save its economy without turning to the International Monetary Fund, the South Korean government announced Wednesday a sweeping set of financial support measures aimed at stemming the country's deepening financial crisis.  Although a step in the right direction, analysts and economists say the  measures are too little too late, as IMF support seems the only way to restore foreign and domestic confidence in the local economy. In Korea, where the policy announcement came after markets closed  Wednesday, the foreign-exchange market remained paralyzed. Trading was halted for a third consecutive day only minutes after the market opened when the Korean currency, the won, fell to its daily permissible  limit at 1,035.50 won per dollar. The benchmark interest rate, the  three-year corporate bond yield, climbed again, to 14% from 13.65%.  The new policies include widening the daily trading band for the currency  to 10% from 2.25%, opening more of the local bond market to foreign  investors and increasing the size of a bank-bailout fund.
    In Japan, the Nikkei 225 average plunged 5.3%,  884.11 points to 15,842.46 -- the biggest point drop this year.  Brokers in Japan said weak bank shares were responsible  for the overall losses as investors, discouraged by the prime minister's denial that he was considering using public funds to help ailing banks, sold off shares in the sector. The losses grew larger in the afternoon as worried investors sold off shares of banks and brokerages with financial health worries, brokers said.  Around Asia, markets tuned in to the developments in Korea and Japan.  In Hong Kong, stocks dropped nearly 300 points during morning trading on worries about the won's depreciation  and heightened fears of an attack on Hong Kong's own currency, although the market closed the day down slightly less than 1%, partly because of a  successful land auction. Shares in Bangkok, Kuala Lumpur, Manila, Singapore, Shanghai, Sydney and Wellington all closed the day lower, while stocks in Taipei rose on a surge in buying of technology shares.
    One large burden now weighing on Asian markets' performance is that Korea's currency turmoil is unlikely to stop at its own borders. If the won depreciates, the yen is likely to depreciate as well, analysts say.  "People are saying the yen will go to 150 if the won goes to 1,200 or 1,300," says one Hong Kong-based hedge-fund manager, citing the two countries' linked economies and shared trading partners. "Basically it means  the whole currency contagion is not over yet." In that environment, the fund manager says, few investors will be willing to wade into regional stock markets. The further depreciation of the won may also prove to be a final slap in the  face for hopes of an Asian export-led recovery. If the won depreciates another 15% to 20%, as many think it may, Korean exports -- for example, in the high-tech sector -- will become much more competitive against those of regional neighbors such as Taiwan, Singapore and Japan. Global deflationary pressures will also increase.  Shares dropped 4.3% in Indonesia partly because of concerns about pullbacks in Korean loans to the already cash-starved corporate sector. In Hong Kong, pressure also began to build again on the local currency's peg to the U.S. dollar. The sky-high interest rates the city saw in October  have yet to reappear, but many think that another attack could be likely  when attention turns from the won to the last fixed exchange rate in the region's open economies. Although the Hong Kong Monetary Authority chief, Joseph Yam, said he saw no evidence of speculators, the three-month Hong Kong interbank offered rate was quoted at 12.1%, up from 11.3% on Tuesday.
    To understand how the Asian malaise can spread, consider the recent travails of China Steel Corp., Taiwan's largest steelmaker. Shortly after the plant rumbled to life in June, Asia's  currencies began their tumultuous fall and the region's economy began to   teeter. Since then, steel prices have fallen 3% in Southeast Asia, and  demand has dried up.    Now comes worse news: The company's Korean rivals are trying to export  their way out of misery. Instead, they're spreading it. China Steel now hears  from customers that Korea Inc. is offering steel on the cheap. "Hong Kong,
Taiwan, Southeast Asia -- they're everywhere," frets Tsou Jo-chi, vice  president of the commercial division at China Steel.  Price slashing by Asia's industrial giants will hit companies around the world,  not just regional players like China Steel. Industries as diverse as polyester  and personal computers will soon feel the pinch, analysts say, as Korean    companies -- already huge exporters within the region -- cut prices in a bid  to boost exports and earn foreign currency to service massive debts. Even   strong companies in fundamentally healthy countries are being sucked into  the turmoil by the very nature of their trade-driven economies.  The looming price war in these industries could be especially fierce, for two  reasons: With Korea's currency losing value by the day -- it hit a new low  Wednesday, closing at 1035.5 won to the U.S. dollar -- its companies can  afford to further slash export prices. And as their foreign debts balloon, cash-starved companies could be driven to more devastating cuts just to  earn foreign currency to stave off creditors.
    The Ukrainian National Bank said Wednesday that reserves are adequate to defend its fledgling currency, the hryvna, despite recent pressure on foreign exchange markets. On Nov. 1, the central bank said, reserves totaled $2.5 billion. 'The fall of the hryvna is impossible,' said Viktor Lisitsky, aide to chairman of National Bank of the Ukraine. 'We have reserves and they are sufficient.' Lisitsky added that the central bank will continue to defend its declared corridor for the hryvna.
'There won't and can't be an abolition of the currency corridor,' he said. 'That can't happen ever. That's dictated to us by life and we're happy that the International Monetary Fund (IMF) supports it as well.' The hryvna has been under increasing pressure in recent weeks due to the selloff in emerging markets around the world. 

 Nov 20 - Thursday. Dashing any early hope for controlling its financial turmoil, South Korea's  currency fell 10% in trading Thursday, a day after the country unveiled an  emergency bailout package.  Most regional currencies fell sharply following the fall in the Korean Won. Relative to the US$, the Indonesian Rupiah fell 1.86%, the Malaysian Ringitt by 2.09%, the Philippines Peso by 1.85%, the Taiwan Dollar by 2.59%.  South Korea acknowledged that it could not resolve its trouble without outside help, and asked Japan to help persuade its banks to roll over  maturing short-term loans to South Korea.  South Korea's self-rescue measures included, among other things, allowing its currency to fluctuate by up to 10% per day. The previous limit was 2.5%. Officials hoped that would boost investors' appetite for the won.  But initial response on Seoul's foreign exchange and stock markets was  not encouraging.  After half an hour of trading, the South Korean currency had plunged by the daily permissible 10% to 1,139 won per dollar. After reaching its limit  low, trading was suspended. Dealers said the central bank didn't intervene in the market.  The won has plunged to its daily limit low for the fourth consecutive session, and trading has been suspended on the local exchange also for the  fourth straight day. "Because of the pent-up pressure on the won, the currency is expected to drop another 10% Friday, and then it may begin stabilizing," said Chang  Dong Ryul, an analyst at the First National Bank of Chicago. South Korea's economy is interlocked with  those of the U.S. and Japan. The falling won could hurt Japanese and American exporters  by making South Korean goods cheaper in overseas markets, while making their goods  more expensive in South Korea. South       Korean companies compete with Japan and Taiwan in semiconductors, shipbuilding  and other exports.  The Korea Composite Stock Price Index, meanwhile, dropped 14.18, or  2.8%, to 488.41. The equities market was hit on news that investors had   rushed to withdraw their deposits at investment-trust companies earlier in  the day.
    Tokyo stock prices were bolstered by optimism that the government will  use taxpayer money to aid banks burdened with bad loans:  Japan's equities market rose nearly 3% Thursday. However,  turmoil in the  South Korean and Malaysian markets sent Asian-Pacific investors into the sell mode.   Hong Kong's market fell 1% as investors remain concerned  about a possible spillover of South Korea's financial turmoil into the Hong Kong economy. The key index at the Malaysia's Kuala Lumpur Stock Exchange fell 11% as   investor confidence in the market caved in following a series of bad news  recently. Rumors of bank runs added the final push to the market's plunge. The Malaysian ringgit tumbled to new lows against the dollar late Thursday  in Asia, at one point sinking to 3.5201 ringgit against the dollar, its lowest  level since it was officially floated in 1973. In late trading, the dollar was at  3.5130 ringgit, up from 3.4850 ringgit late Wednesday. In Taiwan, stocks fell slightly on worries over an unstable currency. Philippine shares were mixed as bargain-hunting on blue-chip stocks  fizzled out towards the end of the session.  In Thailand, the key index dipped to the lowest level in more than eight  years as investors fretting over the South Korean economy dumped stocks  in most East Asian countries.  Indonesian shares fell sharply on investors' concern over the country's high  foreign debts and the fall of some regional major markets. Singapore's  shares were also dragged down by Malaysia's decline.

Nov 21 - Friday. South Korea, buckling under the pressure of a slumping currency and  crumbling investor confidence, said it would seek a rescue package from the  International Monetary Fund. The decision, announced by the country's new    finance minister, Lim Chang Yuel late Friday in Seoul, had been widely expected. Mr. Lim said he expected his country would receive the funds within three to four weeks and that the country intended to ask the IMF to arrange a $20 billion loan and open a line of credit.  A high-ranking ministry official, speaking on condition of anonymity, said Mr. Lim and other officials were alarmed by news reports that the country  might need up to $60 billion in IMF loans. The official said South Korea hoped to deal with its problems with a much smaller loan, and reports of a  massive bailout would only mislead foreign and domestic investors about the depth of the crisis.   An IMF bailout is a humiliating necessity for South Korea, proud of its
meteoric rise from a war-torn nation to the world's 11th-largest economic  powerhouse. Although its problems were spinning out of control, the country  insisted as recently as last week that it would never seek help from the IMF, which requires stringent economic reforms and policy controls.  Although South Korea's announcement came after its markets had closed,
the currency and stock prices rallied on reports leading up to the news. Breaking a four-day falling streak, the South Korean won closed 7.9% higher Friday at 1,056 won to the dollar, compared with 1,139 won at  Thursday's close. The South Korean composite index rose 17.66 points Friday, or 3.6%, to close at 506.07.
    In Tokyo, Yamaichi Securities Co. said Saturday it is considering whether to close down, with a final decision planned for Monday.  The company, one of Japan's so-called "Big Four" securities houses, is  facing severe financial problems and pressure from government regulators over newly discovered debts. Yamaichi made the announcement after news reports that late Friday that  the firm had decided to close down.  The reports of Yamaichi's closure shook up financial markets Friday. Nikkei  News reported that Yamaichi, with debts of about Y3 trillion ($23.82 billion), had decided to inform the Finance Ministry of its decision to close. There is  a suspicion that Yamaichi has more than Y200 billion ($1.6 billion) of
off-balance sheet debt, Mr. Nagano said.  Bank of Japan governor Yasuo Matsushita and other top officials have said they won't allow individual financial collapses to destabilize  the overall financial system. Nikkei News reported that the central bank  would extend special loans to protect the assets of Yamaichi's customers. Tokyo's Nikkei 225 index posted a  2.5% rise, while Hong Kong's Hang Seng jumped 5%.
    Share prices rose Friday in the key equities markets of Latin America, lifted by growing confidence in local shares as well as strong gains in  Asia. A strong performance in Asia relieved investors' fears about the outlook for emerging markets in Latin America.  In Brazil, progress in government reforms and currency stability bolstered  confidence. Mexican and Argentine stocks rose on gains in the U.S. market.

Nov 22 - Saturday. South Korea, said it would seek a rescue package from the International Monetary Fund.  The decision,  was announced by the country's new finance minister, Lim Chang Yuel late Friday in Seoul. South Korean shares dropped 4.1% Saturday, the first trading session following Mr. Lim's announcement.
Foreign investors have been briskly pulling money out of Russia's bond market in recent weeks, the central bank chairman said Friday. Sergei Dubinin said about $5 billion had recently left the market and Russian banks have been buying dollars in an attempt to cover the outflow.  He told the state Duma, the lower house of parliament, that if world markets stabilize in the coming weeks, the pressure on Russia also will ease. "The  next seven to 10 days will be decisive," Mr. Dubinin said.  Also Friday, a World Bank official said Russian economic reforms are "broadly on track," and that the government could receive a $250 million loan  installment aimed at revamping its welfare and pension system. Speaking to reporters later, Mr. Dubinin said the central bank's foreign  exchange and gold reserves totaled $21.5 billion as of Friday.   On Nov. 10, Mr. Dubinin reported reserves of $22.6 billion. On Friday, he  noted the central bank has had to spend heavily from its reserves in recent  weeks to steady the ruble currency.  Mr. Dubinin also said the bank wasn't planning another increase in interest rates, and predicted that rates would decline "when the situation on our  market and in the world settles down" -- perhaps before the end of the year. On Nov. 10, the central bank raised its key lending rate to 28% from 21% to try to ease pressure on the financial markets.  Before the rate increases, Mr. Dubinin noted, the central bank had hoped the international market instability would pass Russia by. "This view turned out to be overly optimistic," he said. 

Nov 25 - Tuesday . The yen tumbled to its lowest level against the dollar in more than five years on Tuesday and Tokyo stocks plunged five percent. Standard & Poor's ratings agency on Tuesday lowered South Korea's currency ratings because of its growing financial crisis and warned that current events could result in another downgrade in the next few months. The agency dropped South Korea's foreign currency long-term credit rating to an A- from an AA+, said spokesman Joydeep Mukherji.The agency also issued a "credit watch negative" designation for South Korea, meaning current events could have a negative fiscal effect and result in another downgrade, Mukherji said.South Korea has about $25 billion in reserves,     enough to keep the government going, Standard & Poor's said. But the problem is private sector short-term debt totals $70 billion -- well above the IMF bailout package. The agency lowered the country's short-term foreign currency rating from A2 to A1. The local currency rating was dropped from A1+ to A1. The credit watch status will depend on a range of factors, including: the results of the presidential elections on Dec.18; the administration's willingness to start market-based reforms to reduce private sector debt.
    The 18-member Asia Pacific Economic Cooperation forum on Tuesday ended an annual summit with a call for greater trade freedom and common front against the economic turmoil gripping the region.  "Certain of the dynamism and resilience of the  region, we underline our resolve to achieve sustainable  growth and equitable development and to unlock the  full potential of the people who live here," the group said in the communique issued after a two-day  summit.  This year's summit has been overshadowed by economic crises in East Asia and fears over Japan's ability to spearhead a recovery. The APEC leaders said it was "critically important" to act quickly against the Asian turmoil. Their communique said the region's underlying economies were "exceptionally strong" and it  "welcomed and strongly endorsed" a plan forged in Manila last week to entrust a financial bailout to the   International Monetary Fund. The leaders also supported a proposal to begin
liberalizing trade in nine key sectors in 1999 and urged that talks under the World Trade Organization to open up financial services markets should be successfuly concluded by a Dec. 12 deadline.

Nov 26 - Wednesday . Asian currencies stabilized on Wednesday as the flow of bad news out of Japan slowed.  The yen fell in early trade and looked poised to test five-year lows but then rallied back a little. The other regional currencies followed suit, paring early losses.  But the general trend still appeared to be downwards and analysts said some currencies could fall further. "Sentiment is as bearish as ever," said Andy Tan, general manager at Standard & Poor's/MMAS in Singapore. "Nothing much has changed, but the events  in Japan are gradually being factored into the regional currencies."  The morning news from Tokyo was grim --  another failure, this time the regional Tokuyu City Bank. Foreign exchange markets swirled with unconfirmed rumors that more Japanese banks may have done "tobashi" deals -- where losses are hidden by shifting them around between clients. But the mood was noticeably calmer than it had been at the beginning of the week when news of the closure of Yamaichi Securities rocked financial markets. The yen hit an early low of 127.84 to the dollar, but then made another sortie on 127 to stand around 127.16/21 late in the Asian afternoon.  The South Korean won gained a little to trade around 1,110, up from 1,122 at Tuesday's close, due to reduced dollar demand. Dealers said eight troubled Korean merchant banks were expected to sell dollars after the government ordered them to give up their foreign-exchange assets and transfer them to their commercial bank counterparts as early as possible. But the early yen weakness helped depress several other currencies, most of which had their own problems to worry about. The Malaysian ringgit fell through 3.50 to the dollar  in morning trade as a slide in Kuala Lumpur shares and worries over bad loans weighed on the market. The Thai baht fell to an early low of 40.20 to the dollar in the onshore market as Thai firms bought dollars to repay outstanding loans. But it came back  later to stand around 39.95/40.05. The Singapore dollar remained steady with no immediate sign of a break below the 1.60 level to the U.S. dollar seen on Tuesday. It traded around 1.5952/62 in the late Asian afternoon. The Indonesian rupiah was steady around 3,650/60 for most of the afternoon but then rose after Bank Indonesia said it intervened to sell dollars. It ended around 3,635/50. The Taiwan dollar was firmer at 2.386/405 from 32.500 at Tuesday's close.
    Japan made an extraordinary  appeal Wednesday for calm among the public and financial markets over the country's economic crisis.  A rare joint statement by Finance Minister Hiroshi Mitsuzuka and Bank of Japan Governor Yasuo
Matsushita, also promised there are no more major bankruptcies among financial institutions ahead for the  nation.  In a sign of how the closure of four financial institutions, including two in the past three days, has rattled the public, the statement said people were withdrawing their deposits from banks. Against the trend, the Tokyo stock market's key 225-share Nikkei index rose, buoyed by hopes that politicians are moving towards deciding on the controversial step of using public funds to help clean up the financial sector's mess. The Nikkei closed 1.12 percent, or 178.02 points, up at 16,045.55 after falling more than five percent Tuesday.  Still, rumors of dubious deals and more bank and brokerage failures sparked heavy selling of shares in the sectors. Banks and other major brokerage houses had to take the unseemly action of denying rumors of imminent failures.   There was more gloom when Moody's Investors  Service said it is looking at downgrading credit ratings of five banks, Long-Term Credit Bank of Japan Ltd., Nippon Credit Bank Ltd., Mitsui Trust & Banking Co. Ltd., Yasuda Trust & Banking Co. Ltd. and Chuo Trust & Banking Co. Ltd. The economic fundamentals of the five banks are very weak, the rating agency said.    U.S. stocks ended their pre-Thanksgiving session mixed, as some investors picked bargains while others cashed in on the day's early gains: the Dow Jones  industrial average closed 11.44 points lower at 7,797.51. 

Nov 27 - Thursday. Markets in Tokyo rallied Thursday while other Asian markets used the U.S. Thanksgiving holiday to take a breather from their recent roller-coaster rides.  In Tokyo, share prices were boosted by hopes that  public money will be used to cope with Japanese financial firms' bad loan mess, but policy-makers face an uphill battle to repair confidence in the country's  financial sector.  Tokyo share prices rose steadily from the start to close up a hefty 3.48 percent, or 557.65 points -- the  fifth-largest point gain this year -- at 16,603.20.  A rare statement of assurance by the Bank of  Japan and the Finance Ministry Wednesday evening eased jitters sparked by a recent string of financial failures, including Monday's collapse of "Big Four"  brokerage Yamaichi Securities Co Ltd. Despite growing hopes for public funds, jittery investors again sold shares in some financial firms as  worries persisted about potential failures, and foreign and domestic lenders to Japanese financial institutions  grew increasingly cautious. Meanwhile, Hong Kong stocks closed marginally down, supported by futures-related trading, lower  interest rates and a recovery in other Asian markets. But brokers said they still are wary of regional trends. "We are in a little bit better shape," said Lennon Chan, executive director at Tai Fook Securities. "But  we will have to watch the trend in the early part of  next week to see if we are really going better."  The Hang Seng Index closed 7.01 points, or 0.07  percent, lower at 10,583.10 after bouncing off a low of 10,385.14 early in the day. The battered South Korean market also closed lower as brokerage stocks plunged on worries that several of them could be forced to shut down in a widely anticipated restructuring of the local financial industry. Seoul's market stabilization steps, announced  Wednesday, failed to impress investors, who were disappointed at the lack of an immediate inflow of cash into the market.  The Seoul stock market composite index ended  down 5.60 points at 433.10.  As South Korea's market turmoil eased, the government said the World Bank and Asia Development Bank had expressed a willingness to join  a bailout effort led by the International Monetary Fund (IMF).   Separately, the Finance Ministry said the head of  the IMF delegation had indicated the fund would finish its assessment of South Korea's financial crisis earlier  than expected to head off further market volatility. Finally, markets in Singapore, which have so far managed to escape the worst of the Southeast Asian  turmoil, ended mostly firm, with banks and electronic stocks leading the way. The benchmark, Straits Times industrial index ended 2.58 points lower at 1,650.97. 

Nov 28 - Friday. Japanese stocks closed marginally higher on Friday while the Hong Kong market dropped slightly in "directionless" trading.  Market jitters over Japan's financial institutions  were eased following official assurances on stability in the financial system and a rebound in financial stocks, brokers said. The key Nikkei average inched up 33.06 points or     0.20 percent to finish at 16,636.26. Brokers said the stock market had been on a roller-coaster ride for the past two weeks due to uncertainly over the possible use of public funds to protect the financial system and a string of domestic business failures, including the collapse of Yamaichi Securities Co. Ltd. Finance Minister Hiroshi Mitsuzuka reiterated at a morning news conference on Friday that no more financial failures were imminent after the Yamaichi failure on Monday. He also said that the ministry and the Bank of Japan stood ready to provide sufficient liquidity to the market.  Hong Kong stocks closed lower on Friday despite a late afternoon rally dispelling some of the gloom generated by bad news for the crucial real estate  market, but brokers said buyers could be back next  week. The Hang Seng index closed 56.18 points, or 0.53 percent, lower at 10,526.92, after gapping down to 10,441.20 at the open. Singapore stocks closed marginally higher, buoyed by a report in the Strait Times Friday that the United States and Japan will lead a move to hold a finance ministers' meeting to discuss the Asian economic crisis. Shares on the Strait Times index closed up 9.62 points at 1,660.59.
 

Dec 1- Monday. Boosted by investor optimism about U.S. inflation and hopes for an end to  Asia's financial woes, Wall Street charged ahead on  Monday, pulling the Dow industrials up above 8,000   for the first time in more than a month. The Dow Jones industrial average rallied 189.98 points, or 2.43 percent, to 8,013.11.  The bond market joined the rally, rising after the  release of weaker-than-expected economic reports from the Commerce Dept. and the National Association of Purchasing Management. Relief that Japanese financial institutions might not have to sell Treasurys to raise cash also helped the market. The  benchmark 30-year Treasury bond gained 6/32 in price to yield 6.03 percent.  Wall Street was also boosted by rallying overseas markets. Japanese investors, encouraged by  government assurances that the country's troubled       financial system must be stabilized, lifted the Nikkei 225 index 2.23 percent to 17,007.59. Meanwhile, bargain hunters pushed Hong Kong's Hang Seng index  up 2.13 percent to 10,769.10.
    South Korea was the only major trouble spot in  Asia overnight, with Seoul's composite stock price index losing 3.6 percent to 393.16 as investors worried about the impact of an International Monetary Fund rescue package on the Korean economy. South Korea and  the International Monetary Fund resumed talks Monday on a package to rescue the world's 11th-largest economy after an initial deal floundered.  Hours after the talks were resumed, Seoul's Finance and Economy Minister Lim Chang-yuel said  the talks were at a closing stage. Both sides had disagreed over South Korea's growth rate next year and the IMF's demand that 12 merchant banks be liquidated. The Korean Broadcasting System (KBS) also reported that the package called for total loans of $55 billion, with $20 billion coming directly from the IMF and the remainder from other countries and international institutions. Analysts said South Korea will need at least $40 billion to $60 billion from an IMF-led rescue package. The World Bank and the ADB have said they  would contribute, and other countries, especially the United States and Japan, are expected to come up    with additional financial aid now that there is an  agreement with the IMF. Camdessus said South Korea would experience lower growth for "a year, a year and a half". But just how low that growth would be has apparently been a bone of contention in the negotiations in Seoul. A growth rate of between 2.0 and 3.0 percent in gross domestic product would halve this year's  projected 6.0 percent GDP increase. It also would be far less than the 8.6 percent average annual growth rate Korea has enjoyed over the past 30 years. KBS said the two sides also haggled over how to deal with the country's banking system. Devastated by bankruptcies and debt defaults, several Korean commercial and merchant banks are on the brink of collapse.  It was all very dispiriting for the stock market,  which continued its two-month downward march Monday. The key composite index broke through the once unthinkable 400 barrier, down 3.6 percent to close at 393.16

Dec 2 - Tuesday.  Federal Reserve Chairman Alan Greenspan said Tuesday financial crises in Asia will subside and leave the nations with stronger economies. "While the adjustments may be difficult for a time, these crises will pass." Greenspan said the current Asian crisis will likely  accelerate the move from large amounts of  government-directed investment to a system that encourages more private-sector involvement.  He said the booming stock markets of the 1990s  led many in Asia to expect unrealistic returns. While Asia's troubles have rattled investors, Greenspan said they were largely inevitable, but characterized them as only temporary.  "There is no reason that above-average growth in
countries that are still in a position to gain from catching up with the prevailing technology cannot persist for a very long time, provided their markets  are opened to the full force of competition."
    Worries over the terms of a financial rescue package for South Korea weighed heavily on most Asian markets Tuesday, depressing currencies and trimming share gains, despite sharp rallies on Wall Street and in Hong Kong. Dealers were dismayed that an agreement on financial aid for Seoul, which has been estimated at US$55 billion, had still not yet been sealed several days after final details were anticipated. The result was a flight to the safe haven of the U.S. dollar, which made big gains against several Asian currencies. The gloom also held back gains on most Asian stock markets, which had been expected to jump after New York's Dow Jones Industrial Average made its fourth-biggest points gain and closed above  the key 8,000-mark for the first time in six weeks. "It is still too early to talk about a situation where the worst is over in Asia," said Kim Teo, managing director of Nicholas-Applegate Capital Management  Asia in Singapore. The Hang Seng index closed up 4.33 percent, or 465.47 points, at 11,216.35.  Singapore's Straits Times Industrials Index rose  moderately, gaining 0.18 percent, or 3.07 points, to 1,697.26.   But South Korea stocks slipped to a 10-year low after news of the suspension from business of nine troubled merchant banks.  Seoul's composite stock price index shed 4.14 percent, or 16.29 points, to end at 376.87, its lowest level since May 1987. The Korean won hit a record low of 1,290 to the dollar during the morning before  recovering somewhat, finally closing at 1,235 on  Monday. "Everybody is panicking," said Yoon San-yoon, a  strategist at LG Securities. "There seems no way out of this situation."  Tokyo stocks were also lower, ending four consecutive sessions of advances, pressured by selling of financial shares. The Nikkei 225 average also fell, slipping 0.57  percent, or 97.30 points, to close at 16,910. "Worries over the Japanese financial system have eased, but the economy still has fundamental problems," said a broker at a second-tier Japanese securities house.
    Russia's central bank raised interest rates for the second time  in less than a month, giving up efforts to shore up the country's slumping  currency and bond markets with direct intervention.  The move, which was announced late in the day, came as the International   Monetary Fund and World Bank appeared ready to step in with nearly $2 billion in loans before year end to help steady the government's finances. And   German Chancellor Helmut Kohl on Sunday pledged to help Russia obtain  more financial support from Western governments.   Early Monday, the central bank sharply raised its daily intervention limit for  the dollar, effectively letting the market go. The ruble recorded its sharpest  one-day drop this year, falling to the central bank's limit of 5,963 rubles per   dollar, from 5,931 Friday.   "Everyone's scared -- no one wants to sell dollars," said Alexander Grushko, a  trader at Inkombank. "Nobody wants to take any risk."    Government bond prices also plunged Monday as the central bank stopped    supporting that market. Yields surged to 35%-45% -- the highest levels in a year -- as investors dumped their holdings.   After bond trading closed, the central bank announced its rate change. Lombard lending rates, which the central bank charges to commercial banks for short-term loans secured by government bonds, were lifted to 36%.  Previously, Lombard rates ranged between 22% and 28%, depending on term.

Dec 3 - Wednesday. South Korea's economic plight and delays in signing a loan agreement with the International Money Fund sent Asian money markets sinking on Wednesday and left stock exchanges in a state of nervous anticipation.  The new downturn in Seoul's difficulties sent mixed signals to stock and currency markets as  South Korea, the world's eleventh-largest economy,  only announced after the end of Asian trading that it  had signed a letter of intent with the IMF to bail out its troubled currency. The Korean key share index recovered some composure, shaking off a five percent loss in early trade to end the day up 2.44 points at 379.31, breaking an eight-day losing streak in the second-busiest trading day in the Korea Stock Exchange's history. But major exchanges in Japan and Hong Kong posted declines.  Hong Kong stocks slipped to a slightly lower  close after seesawing throughout the day to end down 8.77 points at 11,207.58 in moderate trading,  down from Wednesday's HK$13.87 billion at HK$10.21 billion. Tokyo's Nikkei shed 1.9 percent to 16,585.51 as  the market grappled with fears about restructuring in Japan's beleaguered financial sector. Turnover  totaled 457 million shares, down from 563 million on the previous day.  Singapore's falling dollar, which hit a 52-month low against the greenback of 1.6170, dampened market sentiment and the Straits Times Industrials Index edged down 0.97 points to 1,696.29.
    The won, rupiah, baht and ringgit were each sent crashing to all-time lows against the dollar. The Singapore dollar also slumped in line with the regional trend, hitting its lowest level against the U.S. currency since July
1993.  And although most market commentators agree that Asian currencies are now massively undervalued according to fundamental economic measures, few are predicting a rebound anytime soon.  "At these levels nearly every regional currency is undervalued, but that does  not mean that the market could not continue to force them lower in the future.
The danger at this stage is that the downward momentum will build up and become self-reinforcing. Sentiment being what it is, people will just jump on  the band wagon," said Tim Condon, regional economist at Morgan Stanley in  Hong Kong.
    Latin American countries have so far withstood the  ripples from Asia's financial turmoil, but the region is not immune to the effects of the crisis, top finance officials said Tuesday.   U.S. Treasury Secretary Robert Rubin said the impact on the U.S. economy   will not be strong enough to change the Clinton administration's projections of  continued "solid growth with low inflation."   He attributed Latin America's good performance to its sound macroeconomic   policies in recent years.   The Asian crisis and its repercussions was expected to dominate the discussions of the top financial officials from around the Americas. The need  for stronger supervision and regulations of international financial flows and  banking operations was also on the agenda. Chilean Finance Minister Eduardo Aninat agreed that the effects of the Asian    turmoil "are substantially less than those of the already resolved 1994 Mexican crisis."   But he warned that the crisis in Asia may threaten countries on the American continent, and some of them have already had to adopt measures to defend   their currencies.    Latin American currencies have been feeling the effects of the Asian  turmoil. Central banks in Brazil and Chile were forced to intervene to support  their currencies as they quickly lost terrain to the U.S. dollar.

Dec 4 - Thursday. A record loan package led by the International Monetary Fund to bail out South Korea helped calm jitters in most regional markets, but Tokyo traders concentrated on signs of growing  economic problems at home.    Seoul stocks soared after Korean officials and IMF Managing Director Michel Camdessus signed a letter of intent on Wednesday covering an  international accord to provide Korea, the world's 11th-largest economy, with $57 billion to help dig it out of its financial mess. "It's a collective sigh of relief that South Korea has finally turned the corner," said Yoo In-chae,  vice-president of Hanjin Investment and Securities. The agreement brought an end to weeks of  tension that had gripped financial markets.  Investors gave the agreement a rousing welcome and the stock market rallied throughout the day before closing just shy of seven percent higher, in what the Korean Stock Exchange said was the biggest percentage gain in any day in its history. News that foreigners will now be able to hold up to 50 percent of an individual stock also boosted blue-chips seen as potential targets of foreign buying. Volume hit a record 111.1 million shares, worth   571.3 billion won (US$488 million). The previous record was the 88.2 million shares worth 452.9 billion won traded on Wednesday.  The composite index ended up 6.99 percent, or  26.50 points, at 405.81. The won ended firmer at 1,170 against the U.S. dollar, compared with Wednesday's finish of 1,196.
     TheIMF-led rescue package for South Korea was expanded to a record $57 billion Thursday, and many South Koreans reacted with humiliation and anger to the deal even though it has breathed new life into the country's ailing economy. The militant Korea Confederation of Trade Unions promised to wage "all-out strikes" if companies push for layoffs as a result of concessions to the IMF.  South Korea was rocked by a month of worker  unrest earlier this year after the government rammed  a controversial labor law through parliament. The  government was forced to postpone until 1999 a  provision that would have made layoffs easier. The Finance Ministry said the package of IMF-arranged loans had grown by $2 billion to $57 billion after Italy said it would join in and three other countries increased their donations. About $5.5 billion of the package was to arrive in Seoul Friday evening local time, and more than $10  billion will be provided by year-end, the ministry  said. The increases brought the total value of other  nations' portion of Seoul's aid package to $22 billion. The money is intended to be used only if the $35  billion committed by the IMF, World Bank and Asian Development Bank is inadequate.Details are expected to be disclosed after the pact is formally approved by the IMF board of governors Thursday in Washington. It is expected to call for Seoul to put the brakes  on economic growth, liquidate or restructure troubled banks at the heart of the country's debt crisis, further open the financial markets and end restrictive trade  practices. The pact also is expected to call for more transparency in government data and in the bookkeeping practices of major conglomerates. Newspapers complained that the United States and Japan had used South Korea's financial crisis as leverage to force Seoul to open its markets further.  As part of the IMF deal, Seoul agreed to raise its  foreign stock ownership ceiling on a combined or individual basis to 50 percent, effective Dec. 15. At present, the shareholding limit for foreign  individuals is 7 percent in a specific stock, while the combined foreign shareholding limit is 26 percent.  South Korea also agreed to allow Japanese  products greater access to the Korean market,   finance ministry officials said. Previously, imports of Japanese goods had been restricted because of Japan's large trade surplus with South Korea.  South Korean markets responded to the package enthusiastically.  Seoul is desperate for assistance because of a  ticking time-bomb in the form of its short-term debt,  the reason it called in the IMF.  South Korean media reported this week that the central Bank of Korea had been forced to pay $10  billion in short-term foreign debt on behalf of Korean  banks over the last few days. About $66 billion of Korea's estimated $120  billion in foreign debt is short-term, and about $20 billion is due at the end of this year, analysts said. The IMF package for South Korea is its biggest  rescue effort to date, exceeding the $50 billion  rescue program for Mexico in early 1995. Similar IMF packages were provided recently for Thailand and Indonesia. Thailand received $17.2  billion and Indonesia $40 billion under IMF-led rescues that also involved offerings from other countries.
    Most Asian stock markets joined in the Korean rally, albeit to varying degrees, with Japan the exception on concerns over its own fragile financial system.  The key Nikkei 225-share index fell 1.68  percent, or 278.72 points, to 16,306.79. The latest negative shot was fired by Moody's Investors Service, which put another group of Japanese banks under review for a possible downgrade.  "After the failure of Yamaichi Securities, the market has become very sensitive to credit ratings," said Noboru Yorita, Tachibana Securities general manager.  Hong Kong stocks powered ahead, driven by gains in the futures market and bargain-hunting.The Hang Seng Index ended 2.39 percent, or  267.36 points, higher at 11,474.94.  Market sentiment was, however, seen to be strong."There is more of a feel-good factor in Asia now that they are starting to sort things out," said Rory McAllister in institutional sales at HSBC James Capel. "But we are not out of the woods yet by any means." Stocks in Singapore were little changed, with the Straits Times Index finishing up 3.94 points to1,700.23.
    Russian financial markets powered to strong gains Thursday as the Kremlin looks to be winning its psychological war against foreign  investors.  The Russian stock market followed Asian equities higher to post a 6.3% gain on volume of $96 million, the highest in nearly three weeks. The most dramatic rebound, however, was in the government's Treasury market, where  yields at the weekly auction fell to 33% from 41%, largely on the strength of  foreign buying.   "We seem to have turned the corner," said Eric Fine, Russian debt strategist  with Morgan Stanley in London. "It's obvious to the world now that the  rumors about Russia were overdone."   Russia remains susceptible to the fluctuations of global emerging markets and faces considerable financial challenges ahead. But for now, investors are  looking beyond immediate domestic concerns and buying into a package of   both real actions taken by the government and perceived assistance coming   from the West -- even though no new money yet has been committed.   Russia insisted all along that it didn't suffer the same financial problems as  Asian nations. Yet it watched its markets steadily deteriorate as investors   panicked amid government inaction.Then, in an unusual display of coordination, the Kremlin launched a belated   emergency plan largely at the behest of foreign investors in Moscow. It  dispatched top finance officials to Washington to negotiate additional  assistance from the International Monetary Fund. No money was pledged,  and bankers say the IMF is only considering a $1.6 billion stabilization package and the release of a $700 million loan installment suspended because  of Russia's poor tax collection. But investors got the message: The IMF and  the West stood behind Russian reforms. The message was driven home after German Chancellor Helmut Kohl offered  another unspecified aid package. Meantime, the World Bank stepped in by  saying it would provide up to $1 billion in loans by year end. A top Russian businessman said Thursday that the  government should devalue the ruble and that it doesn't have enough money to  defend the currency at its current levels until the end of the year.   Boris Berezovsky, believed to be one of Russia's wealthiest individual with  holdings in the automobile, media, oil and aviation industries, didn't say why he   thinks the government should devalue the ruble, which has come under intense  pressure in recent weaks amid market turmoil in Japan and on world emerging   markets.    But Berezovsky, who recently lost a high-level post on Russia's National  Security Council, is a sharp critic of top officials in the government and their  policies.   Berezovsky estimated that the ruble would fall to 7,500 per dollar if the central bank abandoned its current trading corridor and allowed the ruble to float.  That would be down around 21% from its current spot level of around 5,928.5 rubles per dollar.  'We need to devalue the ruble,' Berezovsky said. 

Dec 5 - Friday. South Korea agreed to lower its economic growth to 3 percent in 1998 from  a projected 6 percent this year under the terms of its  International Monetary Fund (IMF) rescue package,  the Finance Ministry said on Friday.
South Korea also said it would set an inflation target of 5 percent in 1998. Inflation this year has  been projected at 4.5 percent which was last year's  inflation level.  On the budget, South Korea agreed with the IMF to seek a budget surplus through spending cuts and tax hikes.  Earlier, the International Monetary Fund approved a $21 billion loan for South Korea, opening the door to a record-breaking $57 billion  rescue package for the troubled Asian state.   The IMF said in a statement that Seoul would receive the first payment of $5.6 billion immediately,  while a second payment of $3.6 billion would be available from Dec.18, after the first review of the comprehensive economic reform program underpinning the loan. South Korea also said it would restrain its current  account deficit to less than one percent of Gross Domestic Product or about $5 billion in 1998 and1999 from a projected $14 billion in 1997 and $23 billion last year.  South Korea also said insolvent financial institutions should close under the agreement with the IMF.   "Ailing financial institutions deemed impossible to  recover should close down," a statement from the  Finance Ministry said.  South Korea would also allow foreign banks and stock brokerages to set up subsidiaries by mid-1998.  In addition, South Korea would demand that  financial institutions speed up the write-offs of  non-performing loans, the statement said.   The Finance Ministry also said it would draw up  measures to reduce cross-debt payment guarantees  among units of a conglomerate.  All controls on overseas borrowings by private companies would be removed, the ministry said, although it gave no time table.
    Monetary stability in Southeast Asia was short-lived as most currencies showed renewed volatility on a variety of  regional concerns.
    Hardest hit was the Malaysian ringgit, which reached an all-time low of 3.8650 to the U.S. dollar before struggling back to the 3.6950 level. The ringgit's rebound was prompted by the Finance Minister Anwar Ibrahim's announcement that the government would cut spending on several large  government projects and tighten credit in an attempt to restore confidence in the economy.  It was a rare occurrence for a Malaysian government officials' remarks to calm the markets. On several occasions, the country's prime minister, Mahathir Mohamad, has roiled the waters by attacking speculators of his country's currency.  As recently as Thursday, Mahathir sank the ringgit  again as he announced the country would continue its construction of a expensive land bridge. Singapore's dollar took its cue from Malaysia and recovered from a year-low of 1.6250 to the U.S. dollar to 1.6100/10.
    The Korean won, which had managed to stem some of its losses in the wake of a bailout agreement with the International Monetary Fund, slipped back down Friday to 1,230.00 to the U.S. dollar, compared to Thursday's close of 1,170.00. Indonesia's rupiah hit a record low on Friday of 4,020 to the dollar as traders shrank from Southeast Asian currencies. However, the country's central bank came to the rescue, selling off dollars and stabilizing the rupiah at 3,965. The stalwart of Friday's currency trading was the Taiwan dollar, which remained virtually unmoved, closing at 31.75 to the U.S. dollar.
    The International Monetary Fund is revising down its forecasts for world economic growth as Asia's economies crumble under the sustained impact of a deep financial crisis.  IMF First Deputy Managing Director Stanley  Fischer told a news conference Friday that the new  forecast, to be released Dec. 22, will put 1998 economic growth at 3.5 percent, down from 4.3 percent predicted just three months ago. Fischer said healthy economic performances in Europe and the United States are offsetting some of  the impact of the Asia turmoil, which started in July when the Thai baht collapsed, and then spread across the region and beyond.  But he said growth in Asia and Japan is likely to be lower than the IMF predicted in its last report,  issued in September during the annual meetings of the IMF and World Bank. The closely followed World Economic Outlook projects growth and inflation in developed and developing states. The September report forecast U.S. growth of 2.6 percent next year and said the Japanese economy would grow by 2.1 percent. 

Dec 9 - Tuesday. Rumors that Indonesia's President Suharto is gravely ill  swept Southeast Asian currency markets Tuesday, sending the rupiah into a tail spin.  Senior ministers' assurances that the 76-year-old president is in 'good health' and merely resting on the advice of his doctors were unable to prevent the  currency from crashing 10% against the U.S. dollar.  By the close of Asian trading, the rupiah had dropped to an all-time low of  4,625 rupiah to the U.S. dollar, down from 4,141 rupiah late Monday, and 47%  below its value just five months ago, before the Asian currency crisis struck  Indonesia. The Korean won also hit a new low, trading limit down to 1,465.70 from 1,342.40 won at Monday's close.    The won has now shed 32% of its value over the past month, and many    market traders expect that Wednesday's session will again see the currency  trade limit down, hitting the floor at which the Bank of Korea halts trading in   the domestic market. With the little remaining confidence in Asia's financial markets fast  evaporating, the Singapore dollar dropped to a 53-month low, while the ringgit  and the baht both finished Asian trading lower on the day.
    Major Asia stock markets were mixed on Tuesday, with Tokyo posting dramatic gains on hopes of an infusion of funds into the financial system while Seoul stocks continued to decline as investors took flight.  On Tuesday, shares in Tokyo rallied on news the government may issue 10 trillion yen in new bonds to  support the financial system.  Although the news hurt the Japanese bond market, it was welcomed by equities traders who took the view that stability in the financial sector would support  the nation's ailing economy. The key Nikkei 225-share index  ended up 3.44 percent, or 554.94 points, at 16,686.51.
    A plunge in South Korea's won to around 1,465,  another record low, and continued tight conditions in  the money market led stocks downward. "Sentiment was devastated by the paralysis in the  money market, fueling worries about mass corporate failures," said Kim Dae-hee, a trader at LG Securities. In addition, the country's financial markets were stunned by revelations of just how low its foreign currency reserves had fallen prior to the record $57 billion bailout package it agreed with the International Monetary Fund last week.  South Korea Tuesday threw a lifeline to two ailing banks -- Korea First Bank and Seoulbank - by approving the government's plan to take a majority stake. The cabinet endorsed the plan to increase shareholder equity in each of the two banks to two trillion won ($1.5 billion) from the current 820 billion  won ($615.4 million) and take 59 percent of the banks' equity. New shares issued by the banks would be swapped for shares of state-run firms or directly purchased by the government this week, the finance  ministry said. "It looks like the only way to save those two banks," said Lee In-hyung, senior economist at LG Economic Research Institute. "But what about the  fate of other financial institutions? They have to go under instead?" A ministry official said the government had no choice considering the massive adverse impact the demise of the two major commercial banks would inflict on the country. "Letting those two banks go bankrupt would certainly shatter the people's faith in banks," said the  official. "Imagine people rushing to banks en masse to withdraw their money. That would really be a  disaster." Some analysts said collapse of the banks could  paralyze the entire financial system, blocking fund flows between banking institutions and corporate  groups.  "I sympathize with the government," said Steve Martin, head of research at Ssangyong Investment and Securities. "But I don't think the government decision is right economically and in the long-term perspective." But the government appears to face even harder  work ahead, economists said.  "It is really foolish for the government to try to save all banks while pressure for restructuring is mounting," said an economist at the Korea Institute of Finance.
    Selling also hit other markets in Asia as investors turned cautious, with Hong Kong shares ending a three-day winning streak. "People are getting a bit more cautious. The market hit resistance levels yesterday . . . and people think there are not many factors to support it further from here," said Kelvin Tang, an analyst at ImPac  Asset Management. The Hang Seng Index fell 1.98 percent, or 232.28 points, to end at 11,490.66.  Singapore's Straits Times Index was off 1.11 percent, or points, at 1,734.22. Although some players wondered if the plague of  Asian economic jitters might spread again, the overall  mood was calm. "I think the Asian situation is now mainly passed in terms of the instability coming from their markets,"  said Richard Herring, a dealer with Burrell & Co.  Thai stocks also succumbed to profit-taking, which erased some of Monday's gains that followed news  the government would close all but two of the ailing finance firms that had been suspended. "Investors are waiting for fresh news. Yesterday's  announcement . . . is expected to strengthen investor  confidence in the long-term," one broker said. The SET index was down 6.47 percent, or 26.43  points, to 388.00 at the close of trading.
    Asia's continuing economic and financial turbulence started taking its toll on Wall Street Tuesday, dragging U.S. stocks down after a  major technology company, Oracle, blamed its poor results on the Asian flu.

Dec 10 -Wednesday. Hong Kong stocks led a day of selling in major Asian markets Wednesday, with shares tumbling in the last half hour of trade to close sharply lower.  The Hang Seng Index closed 468.25 points, or 4.08  percent, lower at 11,022.41, the low for the day. Brokers blamed a lack of institutional interest for the fall, adding that an upswing looked unlikely before the end of the year. "We have fallen 700 points in two days, not a very encouraging sign," said a broker. "I think that's it for  the year."  The market was also influenced by regional and U.S. market weakness, analysts said. Jakarta, Bangkok and Manila all traded lower on Wednesday, while Taipei and Kuala Lumpur bucked the trend with  good gains. Tokyo stocks closed modestly lower on Wednesday as the market grew wary about the effectiveness of a proposal to issue new bonds to stabilize the nation's financial system, brokers said. The key 225-share Nikkei average lost 208.39 points or 1.25 percent to end at 16,478.12. Nikkei December futures fell 190 points to end at 16,520.  "The proposal to stabilize the financial system was good news," said Tetsuya Ishijima, chief strategist at Okasan Securities Co. Ltd. "But we still have to see the 'tankan' survey and the LDP's economic package."
    South Korea on  Wednesday unveiled a package of steps to stabilize its faltering financial markets, but analysts said more comprehensive restructuring will still be required to repair the nation's economy.  In a desperate effort to remove the bottleneck in  the financial system, the Finance Ministry also suspended the business operations of an additional five            troubled merchant banks.  "The problem is that people, especially foreign investors, do not trust the South Korean government,"  said Yi Seung-, head of research at ABN Amro  Hoare Govett Asia. "The government needs to come
up with a more clear-cut restructuring plan."  Analysts said anxiety over the December 18  presidential election was keeping the government from adopting more fundamental measures.  The Finance Ministry had said last week after ordering nine merchant banks to close that there would be no further merchant bank suspensions.  However, Finance Minister Lim Chang-yuel told  reporters on Wednesday the government would also suspend operations of Nara Banking, Daehan
Investment Banking, Shinhan Investment Bank,  Central Banking and Hanwha Merchant Bank until the  end of January.
"Five merchant banks were now unable to pay their loans, estimated at a combined one trillion won daily," Lim said. "They were only disturbing operations of other merchant banks and corporate groups." "But we will firmly support the remaining merchant  banks by moving the state deposits to them," Lim said.  The five merchant banks were told to submit plans
for capital increases or mergers and acquisitions by the end of this year. In spite of Wednesday's 3.05 percent rise that
lifted the composite stock index 11.85 points to 399.85, analysts doubt there will be a big influx of foreign funds. "The government is setting up a table for foreign  investment in a great hurry," said Yoo In-chae, vice  president of Hanjin Investment & Securities. "There is no reason not to buy South Korean  stocks. There are still some good stocks to pick up,"
Yoo said, adding that the risk factors were already out  in the open and the won's plunge looked overdone.  The ministry also said it would allow banks to buy commercial paper directly from corporations until the end of next year, freeing them from the requirement  of going through a merchant bank. "Banks will be able to buy commercial papers in  their trust accounts without brokering by merchant  banks," the ministry said. The ministry also said the central Bank of Korea  would guarantee call loans that banks extended to  merchant banks.
    Despite repeated denials by South Korea's Minister of Finance and  Economy Lim Chang-yuel that he hasn't discussed the closure of commercial banks with the International Monetary Fund, an internal IMF document shows that unviable local commercial banks will be closed.  'Two commercial banks in distress will be required to submit a plan for  approval in consultation with the Fund, within two months, to meet the Basle capital standards within four months after approval of the plan,' according to the report. 'That plan could initially include a merger with another financial  institution or disposal of some or all of their banking business, to restore their profitability to an acceptable level, and meet the minimum solvency               requirements set by the supervisory authorities.'  The report added, 'if the head of the supervisory authority concludes that
rehabilitation has not been successful within four months, the institution will be closed.'  The finance ministry refuses to comment on the fund's report. The Korea First Bank (q.kfb) and Seoul Bank (q.bsl), which are suffering  from mounds of non-performing loans from the chain collapse of local companies this year, are rumored to be the two banks most likely to be
liquidated under the IMF-Korea agreement, as bank officials said the banks  have suffered a sharp drop in their deposits recently.   Asked whether the Korean government and IMF discussed the shutdown of  any local commercial banks, Lim said last Friday: 'The two sides haven't  discussed the closure of commercial banks.'     On Tuesday, the Korean government said it would invest 1.18 trillion won in  each of the two banks.   The report also showed that the Korean government took action to bring the call rate to 25% by Dec. 5 before the IMF Board approved the stand-by  arrangement for Korea.
    The report also revealed South Korea's foreign-exchange reserves have run dangerously low, with its official reserves standing at $23.9 billion on Dec. 2,  down from $30.5 billion at the end of October. Of the $23.9 billion, $6 billion 'usuable funds.' $17.9 billion of the reserves have been deposited at overseas branches of  local commercial banks.  'Gross reserves declined sharply, with a large amount used to finance the  repayment of the short-term debt of Korean commercial banks' offshore branches,' according to the bailout agreement document entitled 'Request for Stand-By Arrangement.' The document also states that of the country's foreign reserves, $6.2 billion  is committed to forward dollar contracts the government bought in its defense of the won in recent months. But only 400 million of the forward dollar  obligations are due this year, according to the document.
    In addition, the country's short-term external liabilities, including 'debt contracted by residents, nonresident branches and affiliates of domestic financial institutions, and offshore banking debt contracted by domestic banks,' are estimated at about $100 billion at the end of September, the statement reports. This contradicts the finance ministry's statement that South Korea's short-term foreign debt was $65.6 billion at the end of September.  The finance ministry said its figures are correct, as under internationally  recognized definitions of external debt, nonresident borrowing is excluded. 'Korea's external financing situation deteriorated markedly in late October following the decline in the Hong Kong stock market on October 23 and a downgrading of Korea's sovereign risk by Standard and Poor's,' the    agreement states.  'New external financing virtually dried up and substantial difficulties were  experienced in rolling over the relatively large amount of short term debt.'  The IMF also indicates South Korea waited too long to approach the fund for aid. 'Despite the sharp turn for the worse in the external situation in late October,  the authorities waited until November 21 to approach the Fund.   'By this stage, market sentiment had turned overwhelmingly negative, and an  increasing share of gross official reserves had become 'unusable' as they  had been deposited by the Bank of Korea at overseas branches and subsidiaries of domestic banks, which then used the deposits to repay their  short-term debt that was not being rolled over. 'This process led to a sharp depletion of reserves.'  Of the country's short term external debt, totaling $65.6 billion excluding nonresident borrowing, $39.9 billion is held by financial institutions while $25.8  billion is held by the private non-banking sector as of the end of Sept,  according to the agreement.  The agreement also calls for more transparency in reporting data on  international reserves.  'A key issue is the need for greater transparency in reporting data on  international reserves. Reported reserves include deposits at overseas  branches of Korean financial institutions. Hence, the recent shifting of the Bank of Korea's foreign currency deposits to these institutions for liquidity  support purposes is not apparent in the official reserve data,' the agreement  said.  'The reporting of Korea's international reserve position would be made more transparent by including only deposits held at foreign monetary institutions and  high quality short-term foreign government securities as gross reserves.'    The IMF said that data that separately identifies the forward position of the Bank of Korea's reserves will be reported every two weeks under the program, while data on short-term external debt will be publish every three  months. On financial sector restructuring, current deposit guarantees, intended to  'facilitate an orderly restructuring of the financial system in the present circumstances,' will be eliminated by Dec. 31, 2000, to enhance market discipline and minimize moral hazard problems, according to the agreement.  The current system will be replaced by a regular deposit insurance system that will only protect small depositors and be financed solely by contributions  from the financial sector.
    Indonesia's currency rebounded Wednesday on news that Suharto plans to  attend a meeting of Asian leaders. The announcement eased rumors the  president is in poor health, talk that pushed the rupiah down 10% Tuesday.   Still, the currency's gyrations illustrate the continued weakness in Asian   markets. Multibillion-dollar international rescue plans haven't yet brought  stability to the region's jittery markets.  Suharto will go to Kuala Lumpur for the informal              meeting of leaders of the Association of  Southeast Asian Nations, State Secretary  Murdiono said Wednesday. The Indonesian  currency gained in response, climbing to 4,395 rupiah to the dollar, an upward currency   revaluation of 2.3% from 4,495 rupiah to the dollar on Tuesday.

Dec 11 - Thursday. Ripples from South Korea's economic crisis spread throughout Asia on Thursday as Asian stock markets wilted from the contagion effect.  Traders said equity investors throughout the Pacific  Rim could not afford to ignore the economic meltdown currently occurring in South Korea.
    The ravaging of South Korea's financial markets continued on Thursday as the tide turned against the country's effort to regain foreign confidence in its economy, traders and analysts said.  Currency trading again came to a halt in the first few minutes after the won plunged by its 10-percent daily limit to 1,719.8 on the dollar. The stock market  slumped nearly six percent to 377.37 during the day. A trader at Jardine Fleming in Seoul said, "Buy orders were almost nil. Foreign investors were not interested in buying South Korean stocks because of the won's fall against the dollar."  On Thursday, South Korean President Kim Young-sam apologized to the public for the second time in a month for the country's economic crisis. "I feel bitterly responsible that the economy has reached the current situation," he said in a nationwide  address. But his remarks touched no one as frustration and cynicism were growing toward the government's handling of the crisis. "Government policy has lost its consistency," said Kim Wan-hee, chief trader at Dongsuh Securities.The Finance Ministry's hasty decision to move up the stock-market opening schedule to Thursday from  next Monday showed how desperate it was, brokers said. "Foreign investors saw it as another Korean joke," said a broker at Daewoo Securities. The government was telling the world that it was flat broke in dollars, brokers said. "It seems the South Korean government is really trying to do its best but it doesn't have much mileage," said Lee In-hyung, a research director at LG Economic Research Institute. The composite stock price index closed Thursday's trading down 5.62 percent, or 22.48 points, at 377.37,  heading back toward the year's low of 356.82  registered on Dec. 3. The plunge was a slap in the face for the South Korean stock market because it was opened to 50  percent foreign investment on Friday, compared to the previous aggregate limit of 26 percent. "Buy orders were almost nil," said a broker at Jardine Fleming. "Who would buy? If they buy South Korean stocks today, they may lose 10 percent in currency tomorrow." The won's agony was casting a long shadow on the stock market, traders said. "The enormous risk of the Korean currency is scaring off even the most daring  investors," said Oh Yon-suk, a director of Hannuri Investment & Securities. "I am really scared," said one trader at Dongsuh Securities. "The mayhem will go on and on."  An executive at a local brokerage added: "It's a massacre. Even the country's president is helpless." The South Korean currency has lost more than half of its value against the dollar so far this year. "If the government lets the market stay as it is, the dollar will head for 2,000 on Monday," a foreign bank dealer said. "But it has run out of ammunition." LG economist Lee said: "The situation will become worse. The won must gain stability, corporate default risks go down and South Korean paper overseas do better. But we don't see any of those things happening." South Korean credit ratings have been battered on  an almost daily basis. Overnight, Moody's Investors Service lowered  South Korea's foreign debt currency ceiling and downgraded the ratings of 31 Korean issuers. On Thursday, Standard & Poor's cut ratings on three South Korean financial institutions. Traders said South Korea was caught in a vicious circle with the currency crisis driving away foreign investors despite the allure of a cheap and now open stock market.   "As long as the won doesn't recover, foreign funds will not flow in," said Wang Jang-sik, a broker at Shin Young Securities .
    South Korea's escalating financial crisis sent currencies   and stock prices across the rest of Asia reeling -- even renewing fears for the  future of the so-far-untoppled Hong Kong dollar. Hong Kong stocks plummeted 5.5% on fears that the Hong Kong dollar could come under attack again and as interbank rates moved up again. Most markets in Asia fell with Indonesia down 4.8%, Malaysia down 7.4%, the Philippines down 4.9%, Singapore 2.3% lower, and Thailand off 4.9%.  Tokyo stocks were jittery and additionally affected by Japan's ongoing financial problems. The 225-share Nikkei average fell 427.97 points, or 2.60 percent, to 16,050.15.
    Hong Kong's exchange rate weakened and its interbank interest rates surged Thursday as the Korean won sank to a new low. In Hong Kong, regional currency worries caused the Hang Seng index to fall 5.46 percent, losing 602.19 points to end at 10,420.22. The blue chip index has lost 1,302.72 points, or 11.11 percent, over the last three days. Analysts said 10,200 points looked like support in the near term and it would be important to see if the index could hold above 10,000 points. "Currencies are falling about our ears," said Miles Remington, sales trader at SocGen Crosby Securities The market in Hong Kong was not helped by a weakening Hong Kong dollar and a government land auction, the results of which did not live up to expectations Concerns about the Hong Kong dollar, which trades near a fixed rate of HK$7.80 to the U.S. dollar,  threw the local stock market's recent mini-rally sharply into reverse.  "The center of the problem is the Korean crisis," said Sean Lai, a fund  manager at London-based Pictet Asset Management. For one, fund managers  are increasingly worried about Korea's links to regional economies. They also fear that the won's swan dive might spark another debilitating round of competitive depreciations throughout Asia.  In particular, sentiment toward Hong Kong is souring fast. That marks a  sharp turnaround: Until two days ago, stocks had rallied nearly 30% from their   lows of late October. Buoying stock-market bullishness were Hong Kong's interest rates, which earlier this week touched their lowest level in months. Suddenly, though, jitters spurred by Korea's woes are sending investors  rushing to buy U.S. dollars. That has squeezed Hong Kong interest rates sharply higher. Hong Kong's three-month interbank rate jumped to 11% Thursday, up from 10%  Wednesday and sharply above 8.78% on Monday. The U.S. dollar,  meanwhile, edged higher against the Hong Kong dollar in Asian trading,  rising to HK$7.7484, compared with HK$7.7440 late Wednesday.   "The position covering is coming from everywhere," said Tony Ma, a  treasurer at Bank of America in Hong Kong. Andrew Fung, treasurer at   Commonwealth Bank of Australia, dismissed the notion that hedge funds  were behind the selling: "There are a lot of corporates buying back U.S. dollars, rather than speculators."  But few analysts or fund managers expect the Hong Kong dollar to collapse   anytime soon. Official data for October show a slight shift among bank  depositors away from Hong Kong dollars to U.S. dollars -- but not enough to   rock the banking system. Speculators, meanwhile, would have a hard time   destabilizing the currency because trading in the interbank market is thin. That makes speculative positions hard to accumulate.    But the high interest rates needed to protect the linked exchange rate are torpedoing prospects for economic growth next year, which many analysts  predict will fall to 3% or less from over 5% this year. Meanwhile, China trade  -- on which Hong Kong is hugely dependent -- looks likely to slow, too, as  the mainland economy weakens. All that makes for a compelling reason to avoid Hong Kong stocks.    Pauline Gately, regional strategist at BZW Asia Ltd., says she downgraded  Hong Kong's weighting last week, arguing that the market was ripe for a
correction.
    Wall Street had a third-straight day of severe losses as investors went on a selling spree, worried about the Asian turmoil's  impact on U.S. corporate earnings. The Dow Jones industrial average closed 129.80 points, or 1.63 percent, lower at 7,848.99. Boeing. Oracle. Microsoft,. J.P. Morgan. Coca-Cola. The list of companies suffering from the current economic crisis in Asia seems to get longer every day. And, with less than three weeks to go before the end of the quarter, experts say the list is likely to get even longer as more firms come forward to warn investors that the Asian economic crisis is going to take a big bite out of U.S. corporate profits. "December, as the last month of the quarter and the last month of the year, is true confessions month," John Manley, investment strategist at Salomon Smith Barney told CNNfn. "For the first time we are seeing real, numerical signs that Asia is having a bigger impact on earnings than we expected." Indeed, since the Asian crisis first surfaced last month a steady stream of companies have come out with warnings to investors, sending the price of their stocks, and the overall market, lower.
    In Latin America, after several weeks' respite from the effects of Asian economic woes, jittery  Latin and global investors took their cue from the U.S. Thursday and sold off  Latin stocks because of renewed concerns about South Korea.  In Latin America, Brazil's Bovespa Index, which was down more than 6%  during the day, closed down 3.7% to 9108, Argentina's Merval Index declined   1.5% to 662.93, and Mexico's IPC index closed down 1.8% to 4953.04.    The declines followed what some analysts had hailed as the "decoupling" of   Asian and Latin markets. From mid-November until last week, Latin bolsas  had rallied about 17% while Asian markets dropped about 16%.  Over that period, many analysts and investors had attempted to demonstrate    that Asia and Latin America have few economic ties. They also attempted to   show that Latin countries, having already lived through the painful   deregulation and market reforms now required of Asia, are more fundamentally sound.  But many of those distinctions were lost Thursday as investors rushed to bail  out of the most liquid Latin stocks, regardless of their actual links to Asia.   Brazil's overvalued currency and looming deficits came under renewed  scrutiny, despite the fact that the government took strong steps last month to  bolster the economy and assuage investor concerns.   Despite the day's sharp declines, traders said losses were stunted by the fact  that most investors have much lighter positions in Latin America than they did   a month ago, making it feel "safer" to trade in and out of the markets.

Dec 12 - Friday.  Its currency melting down, South Korea must either  renegotiate a $57 billion rescue package or risk large-scale defaults on  international loans, bankers and economists said -- even as the framers of the  bailout package insisted that it be implemented as is.  With the ink barely dry on last week's International Monetary Fund-led  bailout, fears have mounted this week that Korea faces a wholesale debt crisis. The country's currency plunged its daily permissible limit of 10%  repeatedly this week, before posting a slim gain on Friday.  Only central bank intervention -- the first in  several weeks -- managed to support the won  Friday. Early in the day, the won fell its permissible limit to a low of 1891.40 won per dollar, but its strengthened to 1600 won to the dollar after the central bank sold dollars. The won jumped so strongly because, with foreign-exchange trading thin as Koreans clutch their remaining dollars, the central bank's  won-buying packed a wallop. The won's weakness this week have helped to fulfill the very prophesies of financial doom that  have dragged the won down this year. A vicious cycle took hold: Borrowers scrambled to buy dollars before the won fell more -- and in the process, they bid down the value of the Korean currency further still. Despite Friday's signs of  life, the won's recovery remains uncertain.  The lower won makes it difficult for Korea's  government, banks and companies to pay off  their heavy foreign-currency borrowings, more than $100 billion of which comes due in less than one year.  In an effort to ease the cash crunch, the Cabinet Friday ordered the central bank to extend $6.3 billion in special, low-interest loans to cash-short banks, securities firms and investment trust companies.  The government also said it would lift controls on long-term overseas borrowing by private businesses, state-run companies and provincial  governments to help ease the cash crunch.    The Korean gloom gripped stock and bond markets across Asia much of the  week. On Friday, the South Korean market dropped 7.1%, while the    Indonesian market -- roiled by new concerns about the health of the President   Suharto -- dropped 7.6%. The Japanese stock market lost 0.9%, but the Hong  Kong market climbed 1.9%.
    Despite reports that Korean officials seek to change the terms of the pact to  get funds disbursed more quickly, IMF and U.S. officials don't see any   immediate need to change the agreement, reached Dec. 3 after weeks of  tense discussions. Implementation of the IMF program is "the absolute key to ... re-establishing confidence in the financial market," Treasury Secretary  Robert Rubin said. "They've taken important steps but there's a lot that  remains to be done and that is the key to success."   IMF and U.S. Treasury officials say South Korea must carry out the reforms  to which it has agreed before there can be any talk of new money. The IMF  is to release an additional $5.6 billion by Jan. 8, if Korea eases restrictions on foreign investment, as promised, and makes its banking system more  accountable to market forces. The Asian Development Bank plans to make  $2 billion available by Jan. 1. The World Bank, which has pledged $10 billion,  is scurrying to finish negotiations with Seoul, and announce its schedule for  loans, by the new year. International bankers said, and the continued depreciation of the won  signaled, that the question isn't whether Korea will need a new bailout, but   when. "There's going to have to be more money made available," said  Deutsche Bank Asia-Pacific economist Angus Armstrong. "The won will just
keep going down until a new package is negotiated."   Foreign lenders are increasingly reluctant to extend or renew loans and credit  facilities to Korean banks; the banks in turn are short of the dollars needed to roll over loans to the country's debt-heavy conglomerates, known as chaebols.   In addition to the won's problems, the equities market has been depressed by  news that Dongsuh Securities Co. was declared bankrupt after failing to  honor maturing debts for two straight days. In South Korea, a company is  declared bankrupt when it defaults on maturing loans for two consecutive   days. Dongsuh Securities is the second local brokerage house to go bankrupt, following last week's collapse of Coryo Investment & Securities Co.    Citing the prospect of a liquidity squeeze, Standard & Poor's has cut South  Korea's long-term foreign-currency credit rating by three notches to   BBB-minus, just one level above junk-bond status, from A-minus, while  Moody's Investors Service trimmed the country's rating to Baa2 from A3, a  two-notch downgrade. A $2 billion international bond issue for this week was  delayed by state-owned Korea Development Bank.  Such problems will complicate what now appears inevitable: a fresh round of  Korean negotiation with the IMF, Japan and the U.S. As the won falls and the  burden of servicing Korea's debt rises, the IMF may face an unappetizing choice: raise more cash for Korea, or let Korea's banking system implode, unable to meet its international obligations.  Even if the IMF can renegotiate a new package that will stabilize the won, economists say, Korea Inc. shows disturbing signs that it isn't taking the  original agreement seriously enough. Between the end of October and early  December, the government deposited about $10 billion into the overseas  branches of Korean commercial banks to help them meet short-term debt payments. That has exasperated international economists, who were assured Korea's offshore banking affiliates would have to fend for themselves, said P.K. Basu, economist at UBS Securities in Singapore. "Now the Bank of Korea is trying to shore up all the Korean entities," said Mr. Basu. "It boggles  the mind."
    Among the key conditions of the IMF agreement is a commitment to keep  interest rates high and to curtail public spending. That means public-works  projects, the lifeblood of the construction companies around which many chaebols are built, will dry out at a time when the domestic market is being opened to foreign competitors. Demand from Southeast Asia, which  accounted for 70% of Korean contractors' orders overseas, has also diminished as the region grapples with its own economic woes. And the construction companies' principal asset, Korean real estate, has been steadily  shedding value.
Rising interest rates will make it difficult for Korean construction companies  to retire their debt. Some are preparing for the worst. Half of the 300 middle  managers at the construction affiliate of Anam Group, Korea's 26th-largest conglomerate, resigned to help the company "lose weight in these tough  times," said a spokesman.   "The construction sector is extremely vulnerable," said Stephen Marvin, head  of research at Ssangyong Investment & Securities Co. "And that means no           chaebol is safe."
    Indonesian stocks plunged 7.6% and the nation's currency, the rupiah, sank on Friday as concerns about the health of President Suharto returned on news he  won't attend an Asian summit next week after all.   Assurances earlier this week that the  76-year-old president would travel to Kuala  Lumpur for the Southeast Asian Nations Summit  had helped to stabilize Indonesia's markets. They   plunged earlier on rumors that he was gravely ill,  talk that government officials had moved   aggressively to quash. But on Friday, official word emerged that Suharto would heed the advice of doctors, who urged him not to make the trip. The reaction in the markets was swift. The Jakarta Stock Exchange index lost 30.255, or 7.6%, to 365.853. Before Friday's announcement, the currency had already slumped on Friday amid fresh rumors about Suharto's health. Then, within minutes of the disclosure, panic selling sent the currency crashing through the key   psychological barrier of 5,000 rupiah to the U.S. dollar.  Late in the day, the Indonesian currency was traded at around 5,150 rupiah to   the U.S. dollar, compared with 4,580 rupiah to the dollar late on Thursday --  an 11% devaluation. The rupiah is down 22% for the week and 54% for the  year, making it the worst performing currency in the region so far this year.
The currency freefall has led to predictions by some economists that  Indonesia will experience a recession next year, as the rupiah's plunge makes  places an impossible debt-servicing burden on Indonesian corporations. That  would be the first contraction in growth since Suharto came to power in the 1960s, and raises fears of social unrest.  These worries are starting to dwarf previous concerns about Indonesia's commitment to the economic reforms mandated by the International Monetary  Fund as part of its $40 billion bailout.
    In Russia, the International Monetary Fund's (IMF) decision Friday to  recommend restarting a $10 billion loan program will provide much-needed   financial support for the government amid persistent market tension, analysts  said.  'It's very welcome news,' said Charles Blitzer, who covers European   emerging markets for Donaldson, Lufkin and Jenrette in London. 'It gives credibility to Russia's macro-economic program, particularly its renewed  efforts to deal with fiscal problems.'    Although the $700 million IMF disbursement isn't expected to come until early    January, the decision to recommend release of the loan opens the way for as   much as $1 billion in credit from the World Bank before the end of the year.  The money comes just in time.   With borrowing costs spiralling and tax revenue slumping, the government is         desperately short of cash to meet President Boris Yeltsin's Jan. 1 deadline for   paying nearly $2 billion in wage arrears to state workers. Concern about the government's financial problems, combined with the plunge    in emerging markets worldwide, worsened this week after Yeltsin was   hospitalized with a bad cold.   Investors unloaded Russian assets and sold the ruble on the news earlier in  the week.   Local markets were closed for a national holiday Friday, but in the offshore
market for hard-currency Russian debt, prices rose on the IMF news, analysts said.  'It was largely expected, but not fully discounted,' said Stuart Brown, head of  research for Europe, the Middle East and Africa at Paribas in London.   He said Russian debt, especially the securities generated out of the London  Club debt-rescheduling deal, are good buys at current levels, in contrast to  ruble-denominated debt (GKO), which yields 30%-35% and is fraught with  currency risk.   'I don't think you're being paid for the risk in GKOs,' Brown said.   He said the ruble remains at risk if another shock - either domestic or foreign,  such as the worsening problems in Korea - hurt confidence among foreign  investors.   'We're going into Jan. 1 with a very uncomfortable ratio of foreign ownership   of GKOs to foreign-exchange reserves,' he said.      The central bank plans to lift remaining restrictions on foreign investment in    the bond market from Jan. 1.   Reserves, drained by heavy intervention in recent weeks, total about $18  billion, while foreign investors hold about $16 billion in GKO, accrding to  central bank figures.

Dec 15 - Monday. South Korea stepped back from the financial brink as the prospect of billions of dollars in emergency credit from the International Monetary Fund restored confidence in the country's shattered markets. The won rose 10 percent to 1,563.9 against the dollar after tumbling by almost a third inside two weeks. The benchmark stock index soared 7.22 percent -- its biggest one-day  percentage rise ever -- paring its loss for the year to 41 percent. The IMF board, meeting in Washington today, will  consider a Korean request to speed delivery of a portion of the $60 billion international bailout announced Dec. 3, Korean newspapers reported. Several Korean government officials said they are unaware of any such request.
     The Indonesian rupiah plunged as much as 12 percent to the U.S. dollar, leading the rout in Southeast Asian currencies, as a possible freeze on Indonesian loan repayments raised concerns of a deepening financial crisis. The rupiah has lost 58 percent of its value this year, making it the world's worst performer against the dollar. The Philippine peso plunged to the lowest in more than 25 years, the Thai baht plummeted 5.3 percent to 47.35 a dollar, the lowest since the Thai central bank started keeping  records in 1969, and the Malaysian ringgit fell 3.7 percent to its lowest since it was floated in 1973.
    Stock prices fell on most major Asia-Pacific markets on Monday, sunk by   weak currencies across the region. But a rise in the value of the South  Korean currency helped spark a 7.2% advance in Seoul. The  Malaysian market dropped 2.9%, while shares in the Philippines lost 1.9%   and those in Singapore fell 2%.  The Hong Kong market followed the lead of other slumping markets,   dropping 1.7%. The decline erased much of an advance that was posted on  Friday, leaving the index with an 11% loss for the past five sessions. Tokyo's shares rallied toward the close of trading to end little changed. The market dropped earlier in the day on a weaker-than-expected tankan   survey of business sentiment. Issues dropped in Taiwan amid profit-taking.

Dec 16 - Tuesday.  New hopes for  fresh dollar infusions helped the South Korean won defy recent Asian exchange trends Tuesday by surging nearly 16 percent after the central bank decided late on Monday to scrap its trading band and allow it to float.   The won ended at 1,425.0 against Monday's 1,563.9 close.  Dealers said the won was benefiting from expectations of heavy dollar inflows under the IMF's  nearly $60 billion bailout scheme for South Korea,  which had moved players to unwind long dollar  positions built during the won's near 50 percent drop  last week.  The government's decision to float the won, as requested by the International Monetary Fund (IMF),   sell off one or two troubled banks and push forward  with a $10 billion sovereign bond issue boosted Korean financial markets on Tuesday.   But dealers said sentiment could quickly turn  negative if more of the pledged IMF loans were not  disbursed soon.   The won was also expected to face selling pressure from importers seeking dollars towards the  weekend. But the won's sudden surge against the dollar  fueled another buying spree on the stock market on Tuesday, pushing the composite index 4.78 percent   higher to 404.26 by the close. The country on Tuesday scrapped the 10 percent daily band on won/dollar trading and fully floated the  local currency against the dollar.
    Other key Pacific Rim equity markets ended cautiously higher on Tuesday as  analysts and brokers said that a new wave of concern  is setting in over necessary economic restructuring plans.   Although South Korean shares rallied for the second consecutive day and the Nikkei recovered  somewhat, the Hong Kong market closed down by  nearly one percent.  Fears about more bankruptcies, provoked by a loan  default by Shin Poong Pharmaceutical Co. Ltd.,  invited bouts of selling and brought the main stock   index down from day highs, brokers said. The composite index still closed up 4.78 percent,  18.56 points higher at 404.26.  The Korea Stock Exchange suspended trading in  shares of Shin Poong after the firm failed to honor 91  million won of promissory notes on Monday.  Hong Kong stocks slumped to a weak close on  Tuesday with investors liquidating positions ahead of  the year-end as the region's currency troubles  encouraged them to reduce their exposure, brokers said. The Hang Seng Index fell 88.77 points, or 0.85   percent, to close at 10,346.38 after hitting a low of  10,305.91. Turnover was a low HK$7.22 billion, down  from HK$7.77 billion on Monday. Tokyo stocks closed slightly higher on Tuesday, as most participants retreated to the sidelines ahead of the release of the Japanese ruling party's third batch of economic stimulus measures, brokers said. The 225-share Nikkei average gained 75.82 points or 0.48 percent to end at 15,985.21.The LDP's economic package will be finalized on Wednesday.  Singapore shares closed more than two percent  down on Tuesday as investors dumped stocks on fears  over the local currency's fall against the U.S. dollar.
    Moved by lower inflation numbers and the deepening financial crisis in Asia, the Federal Reserve's Open Markets Committee opted  Tuesday to leave interest rates unchanged.  The Fed policy board's decision, taken at its last meeting of the year, was widely expected. It leaves the fed funds rate -- the amount banks charge each other for overnight loans -- at 5.5 percent. The fed  funds rate was last raised in March, then the first hike  in more than two years.  The announcement pushed the price of the 30-year  Treasury bond down 2/32, moving the yield up to 5.97   percent.  Analysts say the Fed was likely influenced by forecasts that the Asia crisis will slow U.S. growth by  anywhere from a quarter percentage point to three-quarters of a percentage point during 1998. That would slow economic expansion from the 4 percent   seen over the past year to a more sustainable rate.  The move was also widely expected following  Labor Department statistics released Tuesday that showed the consumer price index rose only 0.1 percent in November, below the 0.2 percent increase expected by economists.

Dec 17 - Wednesday.  Bowing to foreign and domestic  pressure to rescue Japan's faltering economy, Prime Minister Ryutaro Hashimoto on Wednesday announced a special two trillion yen ($15.7 billion) cut in personal income taxes. The United States applauded as Tokyo share prices surged, and the yen soared against the dollar on the unexpected news.But economists warned that the measure, while welcome, would not be enough to ensure a recovery and could cloud the political outlook for Hashimoto,  who has made a pledge of fiscal reform a key pillar of   his policy platform.  The announcement came less than one day after a  meeting between Hashimoto and Southeast Asian  leaders at which he had pledged not to let Japan's  economic and financial woes drag down the region and spark a world recession.  Hashimoto has faced heavy pressure from within as well as outside his own ruling party to ease his tight  fiscal stance, aimed at curbing the nation's huge  budget deficit and preparing for the burden of a rapidly  aging population. On Tuesday, an LDP panel approved a financial  system stabilization plan including a call for the government to contribute 10 trillion yen ($78.7 billion)
worth of bonds to the Deposit Insurance Corp. (DIC) to protect depositors and help boost capital at troubled  financial firms.
Another party panel unveiled proposals for corporate and other tax cuts worth 837 billion yen  ($6.59 billion), but analysts and markets had dismissed  the plan as too timid. Economists welcomed the income tax cuts, which  basically reinstate a rebate abandoned this year in tandem with a rise in the consumption tax to five   percent from three percent.  The austere fiscal stance, combined with fallout from Asia's currency crisis and a domestic credit  crunch born of Japan's financial woes, depressed corporate and consumer sentiment and looked set to  drive the economy into a recession.
    The dollar was knocked sharply lower against the yen on Wednesday in Tokyo after  the Japanese government's surprise announcement of a planned special income tax cut and market  intervention by the Bank of Japan (BOJ).  The dollar briefly fell as low as 125.70 yen, down  nearly six yen from the day's high of 131.53 yen on  the pair of events.  In late Tokyo trade, the dollar was quoted around 127 yen, compared with Tuesday's New York close of 130.72/82.  Currency dealers and investors said the greenback could remain vulnerable in the near term, but over the  medium term the yen's weak tone of the past several  months is likely to continue as the proposed tax cut  may not be enough to shore up confidence in the Japanese economy.   The dollar's fall accelerated after talk began  whirling through the market that the BOJ had begun selling dollars at about 129 yen.  Eisuke Sakakibara, Japan's Vice Finance Minister  for international affairs, later said Japan had taken steps to counter an excessive weakening of the yen.  "We have taken decisive measures to cope with an excessive depreciation of the yen," said Sakakibara, who is known as "Mr. Yen" among currency traders  because of the ability of his comments to move  markets. In this case, his remarks were made in  response to a question about the BOJ intervention.  Dealers said the BOJ was estimated to have sold  more than one billion dollars for yen in Wednesday's intervention, the first such action in the market since  August 1992.
    Equities on all major Pacific Rim exchanges surged Wednesday, driven by the surprise news of a Japanese income tax cut aimed at rescuing the economy and by persistent central bank   intervention.   Seoul stocks surged for the third consecutive day  on Wednesday, the eve of the country's presidential election, on hopes that the next government might
better handle the economic crisis, brokers and analysts said. The composite stock index gained another 3.52  percent, or 14.23 points, to close at 418.49. It peaked at 422.52.  "Whoever takes office, it will be better than under  the current government," said Na Dong-ik, a broker at Daishin Securities.  Hong Kong stocks surged to trade sharply higher  on the afternoon, inspired by the firmer markets  elsewhere in Asia and Wall Street's gains overnight, brokers said.  The Hang Seng Index closed up 346.32 points, 3.35  percent higher at 10,692.70.  Singapore shares pared morning gains in dreary afternoon trade on Wednesday with investor caution  scotching dealers' hopes that a technical rebound  might help revive the flagging stock market. The 30-share Straits Times Industrials Index closed  up 7.76 points at 1,569.51, well off its intra-day high of 1,579.25.

Dec 18 - Thursday. Fed up with their economy's freefall, voters in South Korea Thursday elected longtime dissident Kim Dae-jung to serve a five-year term as president, leaving some concerned that the country's financial markets will be further battered. Of the three major candidates, Kim was the most critical of the International Monetary Fund (IMF) bailout that is so crucial to the nation's recovery. He already has rattled financial markets with threats to renegotiate the IMF bailout plan.  Both the Korean won and the stock market rallied 20 percent this week after the out-going government  announced a series of reforms. But those measures still must be passed in the National Assembly. That is where uncertainty comes into play.     Kim has been slow to embrace restructuring and certain election promises may make it difficult for him to push through change.  During the campaign, he kept his ties with powerful labor unions and forged new ones with key industrialists, raising doubts about whether he can  stand up to either group. Small and medium sized businesses fear that conglomerates, whose massive debt levels sparked the crisis, will continue to dictate economic policy.
     Pacific Rim markets drifted apart on Thursday with Tokyo stocks giving back a  large portion of Wednesday's gains as excitement faded over Japan's surprise tax cut, while Hong Kong led Southeast Asian markets to a thin rally.  The South Korean stock exchange was closed for the national elections. The key Nikkei average closed down 379.42 points  or 2.29 percent at 16,161.64. It gained 555.85 points  on Wednesday.  "Today's decline does not mean the market is denying the positive impact of the special tax cut," said Masaaki Higashida, a Nomura Securities strategist. "But the market is realizing the [one-time] tax cut will  have only a limited impact on consumer spending and  have digested the impact," he said.  Hong Kong stocks, lifted by firmer sentiment in Southeast Asian markets, shrugged off opening losses to close modestly higher on Thursday, although  brokers said trading was thin ahead of the Christmas  holiday. The Hang Seng Index ended up 61.41 points, or 0.57 percent, at 10,754.11 after losing about 30 points at the opening.  As regional currency turmoil appeared to settle down, a broker said, Asian stocks were generally higher on Thursday -- except for Tokyo.  Singapore shares regained 21.90 points, leaping 1.4  percent to close at 1,591.41.

Dec 19 - Friday. The failure of a foodstuffs trader renewed concerns about the precarious state of the  Japanese economy, forcing shares in Tokyo into a 5 percent plunge and dragging down stock sentiment all over the Pacific Rim. The benchmark Nikkei average collapsed 846.75  points -- more than five percent -- to finish at  15,314.89. It was the Nikkei's third biggest point drop  for the year.   A triple-digit loss for U.S. stocks overnight  contributed to the grim market mood, traders said.Investors say the collapse on Thursday of foodstuffs trader Toshoku Ltd. -- the fourth-largest bankruptcy in post-war Japan - provided more evidence that debt-ridden Japanese banks have  tightened lending so severely the economy is in the grip of a credit crunch. Toshoku, a major player in the international grain markets, said after the markets closed on Thursday it  was forced to file for bankruptcy protection because banks were tightening the screws on lending. The economic pessimism prompted the barrage of selling. Shares of stocks that are hovering near their face value were particularly vulnerable.
    South Korea's financial markets faltered on Friday, one day after presidential elections, as concerns about the country's economy resurfaced.  Seoul stocks plunged to 397.02, losing 21.47 points or 5.13 percent on renewed concerns about hardships accompanying the International Monetary Fund (IMF)-led rescue package, brokers said.  South Korean shares fell  even as president-elect Kim Dae-jung promised to faithfully abide by the country's  financial agreements with the International Monetary Fund (IMF). Responding to a question on what he would do about unemployment, Kim said he would continue consultations with the IMF to "minimize" massive unemployment and defaults. He said he would try to see that legislation implementing IMF reforms is adopted by the National Assembly.  Kim also said it would be impossible to undertake reforms without pain. Thursday the IMF approved a second installment of a $21 billion emergency loan to South Korea to help get its ailing economy on track.IMF managing director Michel Camdessus said the  agency's board had approved lending the equivalent of  $3.5 billion in special drawing rights , the quasi currency the IMF uses to denominate its loans.  The IMF made $5.5 billion available to South Korea when it approved a $21-billion loan for the  nation earlier this month.
    Hong Kong stocks closed sharply lower on Friday after tumbling at the open on negative Wall Street and  Tokyo sentiment, but brokers said a minor pre-holiday rally was possible next week.  The Hang Seng Index closed 348.30 points, or 3.24  percent, lower at 10,405.81, but off the day's low of 10,352.68. Singapore shares closed weaker on Friday as fears  of interest rate rises, volatility in the Singapore dollar and weakness in regional stock markets sent investors scurrying to the sidelines. The benchmark Straits Times Industrials Index dropped 18.80 points to 1,572.61 by the close on weak  volume.
    In the US., the Dow Jones industrial average tumbled 269  points at one point on Friday but recovered to end down 90.21 on a combination of Asian turmoil and "triple witching" expirations.

Dec 22 - Monday. Asian currencies were mostly weaker in thin pre-holiday trade Monday after  Moody's Investors Service downgraded the sovereign debt of four countries, lowering three of them to  junk-bond status.  Moody's said it had downgraded the foreign  currency ceiling for bonds and bank deposits of Indonesia, Malaysia and South Korea in view of
Asia's continuing financial woes. It also downgraded Thailand's foreign currency ceiling for bonds and confirmed the ceiling for bank deposits. The ratings agency attributed the moves to concerns about Seoul's near-term foreign currency financing needs, the ability of Indonesia's corporate sector to meet overseas f debt obligations given the rupiah's drop of over 50 percent and Malaysia's increased vulnerability to financial instability in the region.  Moody's confirmed the foreign currency ceiling for bonds and bank deposits of China, Hong Kong, Japan, Singapore, Taiwan, Philippines and Vietnam.
    News of the downgrades, which would ordinarily  have sparked a selling spree in bearish Asian currency  markets, caused little more than a hiccup as most  players had already closed their books and were unwilling to commit themselves before the end of the year. In South Korea, the won ended at 1,715 to the dollar against Friday's 1,550, depressed by Moody's  move and importer demand for dollars in a market  short of the U.S. currency.  Dealers dismissed the Finance Ministry's efforts to liberalize foreign investment in bonds of state and  state-run companies and in short-term corporate bonds. The Taiwan dollar ended at T$32.603 per U.S. dollar against a previous T$32.374 close due to the  U.S. dollar's overall strong tone.  The Hong Kong dollar and forwards were steady in slow trade. Most Southeast Asian currencies looked soft, but  dealers said they expected range trading due to a lack  of participation. The Indonesian rupiah outshone its regional counterparts, firming to 5,050/100 to the dollar at 1050 GMT against early levels of around 5,200/5,300 despite the Moody's downgrade. The Thai baht slid to 47.00/20 per dollar onshore  against 45.90/46.30 late on Friday on corporate demand for dollars. The offshore rate was at 44.70/45.20 against 45.05/45.45. News of Moody's downgrades of Thailand's foreign currency ceiling for bonds to a junk bond grade  had very limited impact as players had expected the  worst and some companies had already closed their books for the year.  The Singapore dollar remained weak at 1.6750/80  to the U.S. dollar against 1.6710/40 on Friday. Dealers said there was no sign of the de facto central bank after last week's apparent interventions, which rescued the currency from six-year lows.  Some said the appointment of Deputy Prime  Minister Lee Hsien Loong as chairman of the Monetary Authority of Singapore (MAS) was keeping the U.S. dollar well bid, reflecting the market's unease with changes in the current environment. The ringgit slipped to a low of 3.8680 to the dollar after ratings downgrades of Malaysia's sovereign debt and selected companies. Dealers said its drop was exaggerated by very poor liquidity.  The Philippine peso closed at 40.08 to the dollar from Friday's 39.540 close as demand for dollars rose after the central bank suspended its intervention. The Bankers Association of the Philippines said it would temporarily stop selling dollars to the central bank, effective Tuesday, cutting off supply to a pool of funds meant to stem the peso's slide by providing dollars for companies in need of them.
    A new wave of selling brought  the Tokyo stock market's key index to a two-year low on Monday, taking Asian markets along for the bumpy  ride.  The market was dragged down by fears that  tightened bank lending may cause more corporate
bankruptcies, and that in turn may increase banks' problem loans, brokers said.  The Nikkei 225 average closed down 515.49
points, or 3.37 percent, at 14,799.40, after briefly dipping as low as 14,569.43. The Nikkei average last  finished below 15,000 on July 5, 1995.  The concern about more corporate bankruptcies was fueled by last week's insolvency filing by foodstuffs trading house Toshoku Ltd.  Sentiment in the Tokyo stock market was also  darkened by a setback on Wall Street, where the Dow  industrials closed Friday down 90.21 points or 1.15  percent at 7,756.29.  In South Korea, financial markets were dealt  another blow when a leading credit rating agency lowered the country's foreign currency ceiling on  bonds and bank deposits. The news from Moody's, although expected, which ordinarily would have sparked a selling spree on the  stock market, hardly sent a ripple through Seoul's stock market as investors focused more on domestic factors.  The composite stock index closed at 396.06, down 1.03 percent or 4.13 points against Saturday's close.  "The market won't be shaken up by Moody's as the  negative factors have already been reflected and  nothing fundamental has changed. It's not a shock for     investors," said Peter Kim, a broker at HSBC James  Capel.   "The market will move in a narrow band of 30   points up and down from 400 until the year-end unless  a chaebol [large conglomerate] goes bankrupt," he   added.   However, the won lost ground, closing at 1715.0 against the dollar, compared to Friday's close of  1,550.0.    Brokers said the won's weakness and soaring interest rate did not hit stocks hard thanks to large  customer deposits.  Hong Kong stocks slipped to a sharply lower  Monday close, dented by Wall Street's drop on Friday,  slumping stocks in Tokyo and falling futures, brokers   said. The Hang Seng Index finished 233.34 points, or  2.24 percent, lower at 10,172.47. "I think a lot of people are a bit pessimistic about   next year after the IMF's correction of its previous  forecast on Asian economies," said Li.  Singapore shares closed in a depressed mood on Friday with no sign of any Christmas cheer to lift  trading volumes and prices, dealers said.  The key Straits Times Industrials Index sagged 1.97 percent, or 30.96 points, to 1,541.65.
    Asia's raging financial crisis threatens to put a damper on global growth but there is no reason to be overly pessimistic about the world economy's prospects, the International Monetary Fund said in its World Economic Outlook  report. In the report, an interim revision compiled after the fund had to adjust its original 1998 estimates amid  Asia's financial woes, the IMF forecast sharp falls in   Asian growth.  But the fund said overall world output would still  grow by a buoyant 3.5 percent next year, 0.8 percentage points below its previous forecast in  October and 0.6 points below this year's estimated    rate of expansion.   "The threat to global growth from the present crisis   is reasonably limited," the report said. While noting that growth in North America and Europe looked "well sustained in the period ahead," the IMF warned that "a sharp slowdown in economic growth is an unavoidable consequence of the type of  crisis affecting a number of the Asian economies."   Three former "Asian tigers" - Indonesia, Thailand  and South Korea - have had to appeal to the  international community for help over recent months    as a financial tornado ripped through the region. The IMF has put together international bailout packages  for those countries totaling more than $100 billion. Admitting that it originally had misjudged the extent  of the turmoil, the fund appealed to troubled Asian nations to urgently reform their fiscal systems, keep  monetary policy tight and overhaul weak financial  sectors. Still, it warned the risk of the Asian trouble spreading to other countries had grown and that there was no way of knowing whether the world had yet seen the worst. The lending agency warned that a further  slowdown in the already sluggish Japanese economy posed the "key risk" to advanced economies  elsewhere in the world. In the gloomiest section of the report, the IMF predicted the Japanese economy would grow by only 1.1 percent in 1998 compared with 1.0 percent this  year. It said Japan's recovery had "essentially stalled" this year and that the country's economy was "now  expected to experience markedly slower growth in both 1997 and 1998 than in 1996."  The IMF forecast Thailand's economy to stagnate next year, a marked downturn from the fund's predictions of as much as 7 percent growth for Thailand as recently as May. Growth in South Korea was expected to fall to 2.5 percent next year from 6.0  this year, the IMF said.  The turmoil in Asia is widely expected to dampen  growth as well as inflation prospects in major industrialized economies by reducing their exports to the region and keeping a lid on the prices of goods they import from Asia

Dec 23 - Tuesday.  News that three countries in Asia had their sovereign debt downrated to junk bond status bludgeoned a number of key markets on Tuesday, with South Korea falling the lowest as stocks posted record percentage point  losses.
However, shares on the Hong Kong exchange closed up on a boost from Wall Street, while the Tokyo market was closed for a national holiday.  The key composite index on the Korea Stock  Exchange ended the day at 366.36 points, or 7.50
percent lower than Monday -- a record one-day plunge in percentage terms. Brokers said concerns that rising interest rates
could push companies into default caused investors to dump shares by the wheelbarrow load. "The only shares that seemed to be trading were  those of the large conglomerates," said Na Young-hwan at Kyobo Securities. "Small and medium-sized companies were largely ignored as investors feared domino defaults even among healthy   companies."  Of 861 stocks which dropped, 772 hit their daily  lower limit. Brokers and dealers said the markets slid as  confidence in South Korea was shaken by comments from President-elect Kim Dae-jung and further  downgrades by Moody's Investor Service and Standard & Poor's.  "We don't know whether we could go bankrupt tomorrow or the day after tomorrow," Kim told local  media on Monday. "I can't sleep since I was briefed  [about the financial situation]. I am totally flabbergasted."  Standard & Poor's cut the country's long-term and  short-term foreign currency ratings to junk bond status from investment grade -- more severe than the downgrading issued by Moody's Investors Service the  day before.   "The won's nose-dive was the major factor to ruin the debt market," said Oh Byung-geun at Daishin Securities. Dealers said the won's turbulence reminded the debt market of the possibility of debt defaults by South Korea. "Some investors are cautiously whispering about  the possibility of a [debt] moratorium, which they're concerned about more than anything else," an LG Securities dealer said.  The Finance Ministry has estimated short-term debt due in December at between $14-$15 billion with  another $15 billion due in January.
 Analysts say much mystery still surrounds South Korea's debt picture and the unknown factor is  spooking the markets.
"There's too much cloak and dagger stuff," said one analyst with an international brokerage. "Only they [the government] know how dire it really is. But the exchange rate is saying how the markets feel how dire it is."
    The World Bank approved a $3 billion loan for economically troubled  South Korea Tuesday as part of an International Monetary Fund-sponsored rescue package, officials  said. "That loan has already been disbursed this afternoon," World Bank spokesman Mark Malloch Brown told a news conference in Washington.
    Hong Kong stocks ended Tuesday higher with support from Wall Street's gains overnight after thin trading ahead of Christmas had sent the market on a bumpy ride. The Hang Seng Index almost erased Monday's losses and closed 195.63 points, or 1.92 percent, higher at 10,368.10.   Singapore shares gave up their gains to end lower  on Tuesday as earlier cheer from Wall Street's  rebound was swamped by worries about Malaysia debt rating being downgraded to junk bond status. "The focus was on Malaysia," said a dealer with a  local institution. "Standard & Poor's (S&P) downgrading of the country's credit ratings just weighed on the entire market."  After hitting a high of 1,1557.09, the Straits Times  Industrials Index ended at 1,536.31, down 5.34 points.
    US investors appeared more concerned with last-minute holiday shopping than with stock buying as the latest chapter of South Korea's financial woes weighed on the market.  The Dow Jones industrial average plunged 127.54 points Tuesday to end at 7,691.77 -- the lowest closing level since Nov. 18. A late round of computer-generated sell orders also contributed to the  decline.  "The bias at this time of year should be up and, if  it's not, it will be because of Southeast Asia," said  James Awad, president of Awad & Associates.

Dec 24 - Wednesday. Seoul stocks were the center of attention among Asia's markets which  turned in mixed performances on Wednesday before the Christmas break.  South Korean shares plunged six percent at the opening on concerns Korea's present financial crisis could lead to a debt moratorium.  After Tuesday's record fall in percentage terms of 7.50 percent, the composite index fell a further 6.29  percent to 343.32 points shortly after trading started.  But a recovery in the Korean won helped drag prices up from early lows and the index closed at 351.45, a fall of 14.91 points or 4.07 percent.   "The market will remain extremely volatile in the next four or five days," said a foreign bank dealer in Seoul.  Some U.S. banks appear to  be concerned about the ability of South Korean companies to repay their loans in the wake of the country's ongoing financial crisis.  Several of these banks are considering restructuring their loans to South Korean customers,  the Wall Street Journal said Wednesday. Those banks include BankAmerica, which has $613 million in short-term loans, and an additional $96  million in longer-term loans. BankAmerica admitted  that it is exploring the possibility of working out an arrangement to give its lendees more time to repay.  South Korea is in the midst of financial turmoil which recently resulted in the country receiving a $57  billion loan package put together by the International Monetary Fund. The United States pledged $5 billion in backup  loans toward the cause, which were to be used only as a second line of defense for South Korea. However, U.S. officials are now considering a move toward  lending some of that money to South Korea now.  The World Bank also came to the aid of South Korea on Tuesday, rushing through an additional $3 billion in loans to the nation. The mood in Korea has been made more gloomy by the country's president-elect, Kim Dae-Jung, who said that he feared Korea "may go bankrupt" although his party quickly downplayed his statements.  Kim continued his Cassandra-like statements on  Wednesday, saying that noncompetitive companies  should be allowed to fail. He went on to address the politically sensitive issue of layoffs in South Korea. "We can try a wage freeze and if that doesn't  work, we can try wage cuts. If that also fails, we have no choice but to lay off," said Kim.
    Other Asian markets tended to be mixed with  sentiment dictated by local factors, the approach of  the festive season and Wall Street's 127.63 point fall to 7,691.77 overnight, dealers said. The Tokyo stock market's key index snapped a three-session losing streak on Wednesday, advancing  on a plan by the ruling Liberal Democratic Party (LDP) to stabilize Japan's financial system, brokers said.  But many brokers said the rebound was mostly technical after recent sharp losses, and that the market's underlying sentiment remained dismal.   The 225-share Nikkei average closed 125.58 points or 0.85 percent higher at 14,924.98. Hong Kong closed slightly lower on Wednesday in a half-day pre-holiday session, resilient in the face of bigger falls in overseas markets and lingering  uncertainties about the near-term outlook, brokers  said. The Hang Seng Index closed down 25.66 points, or 0.25 percent, at 10,342.44 after zigzagging in and out  of positive territory during the session. Singapore stocks were boosted by news that Singapore Press Holdings was proposing to scrap its dual listings.        Dual listings of shares with local and foreign  tranches were originally introduced in Singapore to protect companies considered to be strategically important, such as Singapore Airlines. At the close, the Straits Times Index was up 2.39 percent at 1,572.96.The US stock market ended the Christmas Eve-shortened trading session with  minuscule losses as some companies slipped in earnings warnings while many Wall Streeters were out of town. The Dow Jones industrial average closed 31.64  points lower at 7,660.13.
    The International Monetary Fund (IMF), the United States and 12 other nations Wednesday pledged to speed $10 billion in bailout money to South Korea to support its embattled economy. But for Seoul to recover, they said it was critical that international commercial banks agree to a "significant" debt rescheduling to aid ailing Korean financial institutions. The IMF said in a statement that it would make $2 billion available to South Korea on Dec. 30 from the $21 billion it had already set aside for the financially troubled country. The IMF plans to dole out another $2 billion to Seoul on Jan. 8. The United States, Japan, France, Germany, Britain, Canada, Italy, Australia, Belgium, the Netherlands, New Zealand, Sweden and Switzerland said they would hand over $8 billion to South Korea by early January. The $8 billion is part of $24 billion those countries had already pledged, but was previously expected to be used only as a last resort. The United States said it would chip in $1.7 billion. Tokyo's contribution will be $3.33 billion. Britain said it would provide more than $400 million.  "This is a major world event and they have made extraordinary efforts," U.S. Treasury Secretary Robert Rubin said of Seoul's newly-elected government. "It seemed appropriate for the (Group of Seven) industrial countries and other nations involved in the second line of defense" to move their aid effort forward, he added. South Korea turned reluctantly to the international community for help last month as its financial system crumbled under the strain of bad loans and a weakening currency. The nearly $60 billion rescue package that the IMF put together, even bigger than a U.S.-led international bailout for Mexico in 1995, was the third multibillion-dollar loan masterminded by the fund this year. The IMF has also led costly bailout programs for Thailand and Indonesia. At a briefing for reporters Wednesday, Rubin defended his decision to let Seoul draw on what was expected to be a second line of defense. He said the disbursements were needed because South Korean stability was "critically important" to U.S. economic and national security interests. South Korea already has taken significant steps to open up its economy and to reform its management, and it was fitting for its trading partners to take an extra step to speed the effort, Rubin said. Finance Minister Lim Chang-yuel said earlier in Seoul that South Korea had agreed to several fresh reforms in exchange for the swift aid -- opening capital markets much quicker, and allowing foreign banks and security firms to open wholly-owned subsidiaries. South Korea's inability to get lenders to roll over short-term debt has been at the heart of the crisis. About $15 billion of an estimated $100 billion in short-term debt was coming due this month and another $15 billion next month. Lim said Seoul was in talks with commercial banks about possible debt rollovers. He said he was also discussing "the possibility of access to market borrowing in early 1998." At a briefing in Washington, senior IMF officials said they expected major commercial banks to agree to a "significant" increase in debt rollovers or maturity extensions. "The commercial banks have to do their part," said one IMF official, who asked not to be identified. "This is to be done on a voluntary basis. We expect that will be done." Japanese officials said the rolling-over of existing loans by private banks to South Korea would be a precondition for support by donor countries. In a joint statement released in New York, six top U.S. banks said they may provide supplemental funding to help South Korea. The banks said they planned to meet early next week to discuss "how such funding can be mobilized expeditiously." "We intend to discuss with other major financial institutions active with Korea how the private sector can best augment the accelerated disbursements or public funding announced today," the six banks said. U.S. Treasury chief Rubin said he was very confident the U.S. contribution -- which will come from a special fund administered by Treasury that does not require Congress' spending approval -- will be repaid by Seoul.
    The Indonesian  rupiah plunged to a new record low  Wednesday, as domestic demand for dollars again reached panic levels on reports that the country's short-term debt burden is higher than previously thought.  After falling as far as 6,300 rupiah to the dollar from a Tuesday closing of 5,450 rupiah, the currency bounced back after reports of late afternoon  intervention by Bank Indonesia, the nation's central bank, trading late  Wednesday in Asia at around 5,750 rupiah versus the dollar.But analysts said the currency may head still lower in coming days. In addition to worries about the short-term debt burden faced by Indonesian companies, the rupiah was hurt by the recent downgrades of Indonesian debt by major ratings agencies. The downgrades heightened fears  international banks will be unwilling to roll over their loans to the corporate  sector. Earlier this week, Moody's Investor Service lowered its rating for Indonesia to Ba1, a junk rating.   What is needed, analysts say, is more evidence that the government is  prepared to take serious steps to control the crisis -- such as measures to create more competition in the financial sector and open up the property market to foreigner investment.  Little new has emerged since Indonesia implemented some reforms after  turning to the International Monetary Fund in October for a near $40 billion  bailout. Thailand and Malaysia, meanwhile, now appear to be taking the need for reform seriously, analysts say. The market had been hoping for substantive policy news at a cabinet  meeting headed by President Suharto Wednesday. But the meeting proved a  disappointment for the markets -- yielding little more than a request for  Indonesians to refrain from buying imported items.   And the threat from Indonesia's debt obligations is apparently much worse   than initial projections, according to a December report by European investment house Indosuez W.I. Carr Securities.  Indosuez estimates that total Indonesian debt is likely to be closer to $200  billion, as opposed to the Indonesian government's official figure of $117 billion. Indosuez estimates that at least $44 billion in offshore bond borrowings are not included in the official government figures, nor are short-term, off-shore borrowings.  And the fear that international banks won't roll over their loans after the Moody's downgrade spurred Indonesian companies to buy dollars Wednesday, even at exorbitant rates.  The hopes for new reform will now likely focus on Mr. Suharto's Jan. 6  budget speech, analysts said. In addition, the capital market regulator, Bapepam, said the government will  unveil 15 new regulations Friday in a bid to bolster the sentiment on the country's sagging capital market.    Market speculation has focused on a possible liberalization of the nation's  financial-services sector and a reduction in barriers to foreign ownership of  property. They were also looking for a government action plan for dealing  with corporate insolvencies. The Jakarta Stock Exchange index eased 0.5 to 396.531 Wednesday.
    The rupiah's fall on Wednesday has left other regional currencies largely unaffected in late Asian trading. The ringgit was at 3.8750 ringgit to the U.S. dollar, up from 3.8848 ringgit at Tuesday's close. The Singapore dollar was also higher at S$1.6740, up a touch from S$1.6750 late Tuesday.  In the offshore market, the Thailand baht was at 46.30 baht to the dollar,  higher than 47.85 baht late the previous day. The Philippine peso earlier closed at 39.97 pesos, up from 40.22 pesos at Tuesday's close.  The only exception was the New Taiwan dollar, which has slipped to  NT$32.615 to the U.S. dollar, from NT$32.520 at the end of trading on  Tuesday.
    The outlook for Japan's financial sector worsened Wednesday as Standard &  Poor's cut its ratings on two of that country's major  banks.  The influential ratings agency downgraded Sanwa Bank Ltd. and Sakura Bank, both of which are among Japan's top 10 commercial banks. S&P said it took the action against Sanwa because, despite aggressively writing off of some bad debts, the bank will still need to set aside about $5.7 billion toward credit costs. Those costs resulted from the declining value of Sanwa's real estate holdings, S&P said, along with a generally weaker financial situation in Japan. Sanwa, like many banks, has been hurt by the burst of the "bubble economy" in the late 1980s and early 1990s when a run-up in real estate prices collapsed, leaving banks holding many bad debts.  Similar bad debts also led S&P to lower rating on Sakura. The bank is in a weaker financial position  than other Japanese banks, S&P said, leaving it more vulnerable to the country's market and economic problems.  S&P's outlook for Sanwa was brighter, however.  It said that Sanwa's accelerated plan to get rid of its  problem loans is a positive step, even though it will be costly in the short term.  In the long term, Sanwa's high liquidity, stable base of deposits and strong place in the country's market should help it maintain its position. Four other Japanese banks. Asahi Bank Ltd., Fuji  Bank Ltd., Industrial Bank of Japan Ltd.,and Tokai Bank Ltd. had their credit ratings placed on  CreditWatch with negative implications. CreditWatch is a review process conducted by  S&P which looks at circumstances which could  change a company's rating. In the case of the four banks, the negative implication means their ratings  could be revised downward.

Dec 25 - Thrursday.  South Korean financial institutions could face a severe cash shortfall and possible default at the end of this month if Seoul sticks to International Monetary Fund conditions and restrains money market liquidity, bankers in Tokyo said Thursday.  Monetary sources said that under South Korea's IMF-led bailout package, Seoul had agreed in principle to reduce money market cash liquidity to no more than 25 trillion won by the market close Dec. 31.  "If Seoul strictly meets this IMF conditionality . . .  some banks will have to face a de facto default in the market," said a senior banker at a major Japanese bank. If the conditions are met, South Korean monetary authorities may be forced to suspend business at  banks unable to raise necessary funds for two to  three months from Dec. 31, bankers said. The possible liquidation or closure of debt-laden banks might not occur, however, until the new administration is formally installed in Seoul, they said.   South Korea's president-elect Kim Dae-jung officially takes office Feb. 25.  The bankers also said that an agreement early  Thursday to disburse a further $10 billion from South  Korea's IMF bailout plan by early January will provide little relief for cash-strapped Korean financial institutions. This is because the money was expected to be  used mostly for the repayment of foreign borrowing,  they said. The bankers said South Korea's foreign debt obligations falling due between Jan. 1 and Jan. 10 are believed to total as much as $10 billion. They said South Korea's central bank settlement system had recently been operating until midnight every day to cope with banks' fund-raising demand.  Bank of Korea Governor Lee Kyung-shick arrived in Tokyo Tuesday for a three-day visit and met top officials from Tokyo's biggest banks in an apparent bid to encourage the rolling over of loans to South Korean financial institutions.  Lee was also to meet Bank of Japan Governor Yasuo Matsushita and top officials of Japan's  Finance Ministry Thursday. Earlier Thursday, South Korea said it agreed to  new reforms with the IMF in return for the early disbursal of $10 billion.Donor nations to the country's record IMF-led bailout package of nearly $60 billion have promised  $8 billion by early January while the IMF plans another $2 billion disbursement to Seoul on Jan. 8, in addition to the $2 billion it expects to make available  Dec. 30.

Dec 26 - Friday.  The South Korean won rebounded strongly on Friday, showing  up other Asian currencies which settled in well-worn  ranges after being numbed by holiday lethargy.  The won recovered nearly a third of its value against the U.S. dollar, opening at 1,400 from a previous 1,836 close, as traders cheered news of   speedy disbursements of a $60 billion IMF-led aid package to South Korea.   It later lost some ground to dollar demand from importers, ending at 1,498, but traders expected it to stabilize and even head higher. "The worst seems to be over. Expectations of dollar inflows killed speculative dollar buying," a  domestic bank dealer in Seoul said.  On Thursday, Seoul said it had agreed to new  reforms with the International Monetary Fund (IMF)  in return for $10 billion by early January to help stabilize its financial markets, which have been hard hit by fears of debt default.  South Korean stocks also soared on the news with the composite index ending nearly seven percent  up at 375.15 points.    The won's recovery gave brief respite to the Taiwan dollar, but it soon slid from its opening highs and was quoted at T$32.660/680 late Friday against  a previous T$32.637 close.  In Southeast Asia, Indonesia's rupiah extended its  morning gains on talk of central bank intervention. It  stood at 4,975/5,005 to the U.S. dollar against  6,125/75 late on Wednesday.  Dealers said Bank Indonesia sold dollars for rupiah from the 5,650 level to boost the rupiah further. But short-end swaps remained below par due to persistent demand for dollars in very thin markets, keeping the rupiah vulnerable to fresh falls through  6,000, dealers said.   "Dollar/rupiah could still test new highs over the holiday period. It really is a demand and supply  situation and the demand is on the dollar," a U.S.  bank dealer in Singapore said.  Dealers said transactions were hampered after non-domestic banks reduced credit lines to local banks following a Moody's Investors Service rating  downgrade of Indonesian debt to non-investment  grade on Monday.  They said the move triggered some follow-through by local banks, which slimmed down  lines to other local banks. The Thai baht pulled back a bit to 47.40/60 to the dollar onshore from 47.85/48.00 five hours earlier, but dealers said worries about the financial sector continued to plague the unit.   "The baht could easily ease to 48.00. General sentiment is weak and what we hear about the state of Thai banks and government fiscal positions do not  help," said a Thai bank dealer in Bangkok. Thai Finance Minister Tarrin Nimmanahaeminda said on Thursday the government would not close  any more financial institutions, but would focus on strengthening them as part of overall efforts to revive the economy. His statement came amid market speculation the Bank of Thailand may take over the management of Bangkok Metropolitan Bank, which has seen a steady run on deposits and is having trouble finding a partner. The Malaysian ringgit floundered in a wide 3.83-3.88 range against the dollar, a victim of poor  year-end liquidity and corporate demand for dollars.  The Singapore dollar hovered around the 1.67 level against the U.S. dollar. Hong Kong financial markets were closed for Boxing Day and markets in the Philippines were on an extended Christmas break
   Japanese stocks sank deeply, wiping out gains built over the past two days.  Tokyo brokers said the market was haunted by  fears that Japanese banks' tight lending stance might  trigger more corporate failures, and that the market
was likely to stay nervous amid concerns over the financial health of some Japanese firms.  The key 225-share Nikkei average lost 497.50  points or 3.25 percent to close at 14,802.60.  Trading was very light, with only 380 million shares
traded. Worries that relatively small firms, which depend on banks for funds, may fail before the end of 1997 has prompted many stock dealers to close their positions, said Akishige Ishikura, analyst at Dai-Ichi Securities Co. Ltd. "Everyone has the same thing on their mind," he  said.  The last trading day for the Tokyo stock market  in 1997 is Tuesday. The market will only be open for half the day.   The Hong Kong and Sydney stock exchanges  were closed for the extended Christmas weekend holiday.  In Singapore, shares lost all their morning gains  and ended lower on Friday along with Wall Street on a dismal outlook for the New Year, dealers said.  "There might be a pick-up in volume next week when people start trickling back to work," said a dealer with a local house. "But we are not expecting  big orders for the New Year because we think sentiment is still poor."  The Straits Times Industrials Index ended at 1,552.52, down 20.44 points or 1.30 percent, after  hitting a high of 1,574.94.

Dec 27 - Saturday. Despite persistent fears that many debt-ridden companies will fold in the  weeks ahead, South Korea's benchmark stock index closed up Saturday, if  only slightly.  An announcement that housing giant Chong Gu Group filed for special court protection after defaulting on $9.9 million in maturing debts led to a sharp drop early in the session. But, after Friday's 23.7-point rise, or 6.7%, the benchmark index rebounded to finish the half-day, final session of the year up 1.16   points to 376.31.  While blue chips kept the index up Saturday, overall market sentiment was  down, said Kim Se Jung, an analyst at Seoul's Dongwon Securities Co.  "Investors wonder whether the companies they have invested in will still be
operating when the market reopens on Jan. 3," said Mr. Kim. Many companies have to meet maturing short-term debts early next week.  Some 250 issues rose Saturday and 622 declined, two-thirds of them by the 8% daily permissible decline. Friday's strong market showing followed news that the International  Monetary Fund and the Group of Seven industrialized countries will provide  $10 billion in emergency loans to Seoul by early next month.  Both South Korea's currency and stock prices have lost half of their value this year, making South Korean companies cheaper on the stock market --  and a potential target for foreign takeover.  That could bring in American and other foreign firms looking for bargain rates among  debt-ridden companies in the electronics, steel,  paper, and auto parts industries. "Stock prices have fallen so much that the foreigners make good deals even after assuming all the debts," said Rhee Nam Uh, a research director at Peregrine Securities Co. Earlier Saturday, Chong Gu Construction Co. and three other key subsidiaries of the Chong Gu conglomerate said they were asking a court to help reschedule debt payments and allow it more time to unload assets.  Chong Gu, South Korea's leading apartment builder, borrowed heavily in the  early 1990s to build a department store in Seoul and open a regional  television network in the central provincial city of Taegu. The group's debts total $713 million, roughly the amount of its total sales last year. Apartment sales this year didn't meet expectations.    At least five major construction firmed have collapsed in the past year, and   more bankruptcies are likely.
    Officials hope to reverse the crisis by prodding private banks to roll over their loans to Korea and by mobilizing loans earlier earmarked only as a "second line of defense" for the dollar-starved nation. In return, Korea is  pledging fresh measures to open up its economy. On Monday, an important  meeting of Korea's U.S. bank creditors in New York may signal how well  the debt-rescheduling talks will go A top IMF official said it won't be clear for a year whether Korea's crisis is truly over, but indicated  renewed confidence this latest effort will bring  results. He said the new reform commitments by Seoul "should remove the doubts" in financial markets about Korea's sincerity and its ability to persuade creditors to roll over debts.  But the ball is in the hands of investors and,  crucially, Korea's global creditors.  The accelerated aid may boost the sentiment of Korea's creditors. "Korea wasn't getting the rollovers it expected," said an executive at a foreign bank  in Seoul. "It has a good chance of changing things [for the better]."   Much hinges on the negotiations under way between Korea and its bank  creditors. The crisis has been fueled by fears that Korea's banks and  companies won't be able to repay or roll over $15 billion in loans due by the end of this month. Questions remain about Korea's wherewithal, despite the  coming dollar loans: Standard & Poor's estimates the capital needs of South Korea at as much as $18 billion for January and $15 billion for February. In  early December, usable foreign-exchange reserves stood at $6 billion. Commercial banks in the U.S., Japan and elsewhere, prodded by the Federal Reserve, the Bank of Japan and other regulators, are moving toward rescheduling the debts of Korean banks-or what U.S. and other officials called "a significant voluntary extension of maturities of existing claims by  international bank creditors on Korean financial institutions."  The U.S. Treasury views the debt rescheduling as a linchpin of the new rescue measures. One challenge of the Korean crisis is that much of its debt is owed by private Korean institutions, not the government, to private foreign  institutions. The IMF hasn't much experience in restructuring such private debts, and governments of the G-7 industrial nations -- the U.S., Canada,  Britain, France, Germany, Italy and Japan -- are squeamish about forcing banks to make loans the banks consider unwise.  Privately, officials familiar with the bank negotiations say that in exchange for extending their loans, the foreign banks will get an explicit Korean  government guarantee: Seoul will formalize a pledge it made in August to guarantee the foreign deposits and credits of Korean banks, though not to guarantee the debt of Korean conglomerates or trade credits.  Mr. Rubin, like Japanese officials, said the terms of these rollovers are up to  the banks and the Koreans to negotiate. "No one has ever done anything like  this before," he said. "There are no suspensions [of payments]." He said the amount of rescheduling will be "significant relative to the short-term debt outstanding." The objective is "to buy Korea time."  Officials of six big U.S. banks -- Bank of America, Bankers Trust, Bank of New York, Chase Manhattan, Citibank and J.P. Morgan -- met with William  McDonough, president of the Federal Reserve Bank of New York, on Wednesday. A larger group of Korea's bank creditors is scheduled to meet in New York Monday. "We intend to discuss with other major financial institutions active with Korea how the private sector can best augment the accelerated disbursements of public funding," the six banks said in a  statement.  In Tokyo, Korean central bank governor Lee Kyung Shik spent Wednesday  and Thursday busily lobbying Japanese banks to roll over their Korean loans. Mr. Lee met the heads of Sanwa Bank, Bank of Tokyo-Mitsubishi, the Norin Chukin Bank and Sakura Bank, as well as Bank of Japan governor Yasuo Matsushita and senior officials at the Ministry of Finance. Japan's bankers said they would consider rolling over loans on a  case-by-case basis. "We want to maintain our balance [of outstanding loans]  to our core Korean customers among the top banks and business," NorinChukin Bank said in a statement, "with a view to maintaining long-term relationships." That statement left open the possibility the bank might not support Korean businesses it deems unsound or unimportant. Bankers estimate Japanese private lending to Korea at between $10 billion and $15 billion, down from $24 billion at the end of 1996, reflecting the flight of foreign capital from Korea. But the Japanese banks, like U.S. lenders, will remain under strong  government pressure to rally to Korea. The Japanese government  encouraged private banks to respond to the Korean call for help, though it  said it wouldn't force them.
    One critical battle in the fight to stem the Korea crisis does appear to have been won: that of persuading populist  President-elect Kim Dae Jung to placate the markets. Mr. Kim has spooked  investors and creditors with leftist rhetoric and injudicious statements about Korea being close to "bankruptcy."  But market-savvy aides to Mr. Kim appear to have his ear. Within days after the election, says one aide, Mr. Kim gathered his inner circle at his  home and told them: "We're no longer on the campaign, and we have to be careful not to say anything that could rattle confidence." U.S. officials are  clearly pleased Mr. Kim is being represented in financial talks by You Jong   Keun, a U.S.-educated member of the Kim braintrust who has implemented  tough free-market reforms in Northern Cholla province, where he is governor. The president-elect doesn't take office until February, but he has all but assumed leadership from President Kim Young Sam.  U.S. officials attributed the failure of the first bailout to several factors: a  slow initial response and, later, clumsy statements by Korean leaders; the disclosure after the IMF bailout pact of a bigger Korean debt burden than  investors expected; and worries over the fragility of banks in Japan. Those hitches may not beset the new bailout, given the new savvy of Korean leaders, a clearer picture of Korea's problems and Japan's recent action to aid its banks.

Dec 29 - Monday. A group of U.S. banks have agreed in principle to give South Korean institutions a  little more time to pay off their loans.  The deal was announced early Monday afternoon,  although no specifics were outlined.  Various South Korea banks face about $30 billion  in loan repayments over the next two months. U.S.  lenders have been in talks on extending those loans.   International regulators have been asking commercial banks to roll over the loans to South Korea in the wake of that country's continuing debt  crisis, which was spurred by a combination of  corporate bankruptcies and a sinking currency.   Goldman Sachs, Lehman Brothers, Merrill Lynch  (MER) and Salomon Smith Barney (SB) said they
have all signed on to the deal. "[We] are ready to participate in the program of support for Korea that financial institutions around the world are developing in conjunction with central banks  and finance ministries," the companies said in a joint statement.  "Our participation will relate to credit exposures that Korean institutions have outstanding with the  investment banking communities." Chase Manhattan Corp. (CMB), J.P. Morgan &  Co. (JPM) and Citicorp (CCI) also are discussing  ways they might help the nation through its fiscal problems.  Any agreement would only be preliminary because European banks, which are not participating in the New York talks, also would need to be involved eventually. Possibilities for action by the banks include rolling over the existing loans or repackaging the loans as sovereign debt that is backed by the South Korean government, but the latter move is considered unlikely.   A group of 10 Japanese banks, including Bank of  Tokyo-Mitsubishi Ltd., met in Tokyo Monday to discuss their own course of action, which also could include rolling over loans to South Korea. Japanese firms have a total of $24.3 billion in outstanding loans  to South Korea out of a total $99.5 billion in loans to  that country.  Last month, South Korea received a bailout  package of about $60 billion that was cobbled together  by the International Monetary Fund.   However, the funding will not cure all of the  country's financial woes. Corporate bankruptcies,  market instability, and the volatility of the country's  currency, the won, could continue to dog South  Korea's recovery.  The nation is attempting to shore up its troubled finances through a series of measures. South Korea's  parliament began discussions Monday on key financial reforms, including a contentious plan to fold  supervisory authority over the banking, securities and  insurance industry into one agency. 

Dec 30 - Tuesday. The world's major banks  prepared on Tuesday to join an effort to throw ailing  South Korea a lifeline by rolling over a mountain of  short-term debt due to be paid on Wednesday.  The effort, beginning Monday with an announcement from a group of key U.S. and German banks, is expected to help Korea manage its estimated   $100 billion in short-term debt, of which $15 billion  comes due by Dec. 31 and another $15 billion next  month.  Overnight, leading institutions from Asia, Europe and North America pledged to work to restore South Korea to fiscal health, with short-term debt seen as its major problem. Leading Dutch banks ABN AMRO and ING said they have agreed to roll over South Korean debt  following a request from the International Monetary  Fund, but on the condition that other G-10 nations as
well as Australia and New Zealand do the same.  After two separate meetings in New York,  bankers issued statements of support for South Korea  in a move aimed at giving a psychological boost to the global bailout effort.  Neither statement gave specifics of what the banks would do but people familiar with the situation said it  was clear the major lenders were willing to roll over  billions of dollars in short-term credits coming due as  soon as the year ends on Wednesday, possibly for as long as 18 months.   ING and ABN agreed to the rollover in informal talks with the Dutch central bank, which received an IMF request to ask commercial banks about a voluntary debt restructuring.  A spokesman for the central bank said the same request had been made to other national central banks.  An ING spokeswoman said that the rollover was the only concession agreed by Dutch banks regarding South Korea. She would not disclose the amounts involved. European banks have been the most aggressive lenders to South Korea in recent years, with their  combined exposure amounting to $33.8 billion by the end of 1996, according to figures from the Bank for International Settlements. U.S. banks were owed a combined $9.36 billion.  Japanese banks, which have been reducing their exposure, still remain heavily involved, with claims of  $24.3 billion. Individual figures for bank exposure to South Korea are not released, but the overall exposure of Dutch banks to South Korea was just short of $2 billion at the end of 1996.  The talks in New York, led by New York Federal Reserve President William McDonough, followed reports from Tokyo and London that banks worldwide  were preparing to extend short-term loans to Seoul to help resolve the economic crisis there which has roiled  markets around the world. Germany's top banks pledged on Monday to take part in an international private-sector financing initiative to prevent South Korea from defaulting on its debts and to protect the global financial system.  The Wall Street Journal said on Tuesday banks in the United States, Europe and Japan were considering extending new credit of as much as $10 billion to the government of South Korea, after the high level meetings on Monday. Sources in Frankfurt, Germany's financial hub, said  the provision of fresh loans was not under serious discussion at the moment, but would be an option at a  later stage.  A German source said his impression of the  meeting of German bank representatives in Frankfurt  on Monday had been that the current focus would be on rolling over debt.
    The International  Monetary Fund approved a $2 billion payment for troubled South Korea Tuesday, bringing IMF payments to more than $11 billion in just under a month, a spokesman said.  The money, being paid under an accelerated schedule approved by creditors last week, is intended to ease a painful credit crunch in South Korea. It is  part of a record-breaking $60 billion international  rescue package that includes $21 billion from the IMF. The IMF said last week that Managing Director Michel Camdessus would recommend the $2 billion payment, designed to help restore confidence in South Korean financial markets. The money originally was  to have been handed over next year.

Dec 31 - Wednesday.

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