THESE days, when Hong Kong doesn't sleep, London doesn't either. The market here awoke amid trepidation at the wobbles from Hong Kong. At its worst the London market
showed a loss of more than 28 billion pounds, though it had clawed back significantly by the end of the week. At best, fund managers are skeptical.
Credibility for emerging Asian markets is at a new, historic low. A pointer is Pakistan's five-year dollar issue, expected to be delayed now by several months. All debt issues from these markets are suspect, now that the roar has gone out of the tiger economies of Southeast Asia.
India included. For Mumbai too has been painted with the Asian brush. "There will obviously by some rethinking on the kind of stock we buy in Mumbai and how much trade we want to expose ourselves to," says a senior manager with the London office of a giant US fund. According to him, the loss of small investor appetite in emerging economies would be reflected in decisions taken by the funds.
London is the most significant international market for India. A host of GDR (global depository receipts) issues of Indian companies have been launched from here. But now all issues except from blue-chip companies are likely to be seen with some suspicion. Hong Kong-linked stocks like the HSBC and Standard Chartered took the worst of the buffeting here. Many other companies have links with companies in the former British colony; they are being looked at with suspicion. Which will take quite some time to fade away.
