Crisis slams door on billionaires' club

PUBLISHED : Friday, 09 January, 1998, 12:00am
UPDATED : Friday, 09 January, 1998, 12:00am

Anyone tracking Asian currency movements yesterday was hard-pressed finding time to breathe, let alone trying to explain what it all means.

Lai See is grateful to the folks at Credit Lyonnais Securities Asia who spared a moment and sent over their The Solid Ground Daily newsletter.

Under the Asian News and Views section they recall one of the least prescient book titles of the past 12 months - author Geoff Hisock's Asia's Wealth Club.

Only one title now appears to be more inaccurate than the latter title - Thailand's Economic Boom.

Asia's Wealth Club was meant to list Asia's top 100 billionaires in United States dollar terms, although anyone who has ever compiled or read these sort of plutocratic league tables knows they are to be consumed with a large pinch of sodium chloride.

The Solid Ground Daily assumes the wealth of all of the entrants has deteriorated in line with the collapse of the value of their domestic stock market relative to the greenback.

It means there are a lot fewer Asian billionaires today than there were 12 months ago.

Hong Kong has five, compared with eight last year. Indonesia is down to two from 15; Malaysia three from 11 and the Philippines is left with just four after scoring 12 last year.

Thailand is proportionately worse off than any other Asian nation with 12 of its 13 billionaires going missing in action in the past year. Overall, of the 80 billionaires in Asia's key markets last year, 27 survive.

Another broking house, Lippo Securities, has offered its spin on events in Jakarta by consulting a psychic.

Getting advice from the type of people who consult fresh goat entrails rather than economic indices may seem eccentric on Lippo's part. However, the folks at Lippo reason that since several well-known Indonesian economists have said that what has happened to the rupiah is beyond the scope of any economic theories they subscribe to, Lippo believes they are too 'confused'.

'We feel it may be time for investors to pay attention to the non-fundamentalists: the psychics,' they add.

Ki Gendeng Pammangkas accurately predicted last year that the vehicle, property, timber and banking sectors would be badly rocked. This year he believes, among other things, that another six to 11 banks will close, four prominent business groups will collapse, one of which is a pribumi, or ethnic Indonesian group.

A very important person will die in March or April, proceeded by one of his children; at the same time a power struggle among the elite will see the ascent of a relatively unknown group of civilians or military personnel into power.

Social unrest among the lower income brackets enraged at the gap in wealth throughout society will peak on February 10.

The Lippo lads reckon Ki Gendeng Pammangkas' predictions have more guts than those of most analysts, politicians and economists. If they have a criticism it is that they feel he is too conservative - an observation perhaps sustained by his belief the rupiah will be at 7,000 to the dollar close to the March presidential election. Yesterday it dipped to 10,000 to the greenback before rallying.

These calamitous falls in currency values remind us of the stories about hyperinflation in Germany's Weimar Republic in the 1920s.

The price index rocketed so high, and so quickly that Germans had to take wheelbarrow loads of almost useless currency to buy essential foods. Many who left their wheelbarrows outside shops found that thieves would tip the money on the ground and make off with the barrows.

How soon before a desperate Indonesian mugs someone, tips out the rupiah notes and runs off to eat the leather wallet? With currencies shaky, gold having dropped in value and equities looking peaky, a desperate search is on for alternative commodities until things settle down.

Lai See forecasts that bride futures could be one of the commodities able to hold its value after receiving a fax from The Svetlana Agency - 'Russia's most experienced well-known Marriage agency, with a catalogue of over 600 lovely young ladies.' However, the astute bride trader needs to be aware of shifting market trends.

Russian women have become the most sought-after mail order - or at least e-mail order - brides of the late 1990s. For example, figures released in Britain show that British men married almost 500 Russian women in 1996, the last year for which figures are available.

The figure for Thai brides dropped about 30 per cent to almost 200 in the same period. Wonder if Ki Gendeng Pammangkas could give us a good spot rate for the third quarter of this year.