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Peregrine fallout threatens

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SCMP Reporter

This looks to be a grim day for Exchange Square.

Today investors will have their first chance to react to news that the locally listed Peregrine Group, once the region's largest private investment bank and one of Asia's most successful equity underwriters, is hanging by a thread, ready to be closed by creditors if a buyer cannot be found.

Peregrine's Hong Kong officials have spent the weekend assuring the public that its troubles should not spill over into the local banking system, but the dire straits the high profile securities house has found it itself in could shatter confidence in local shares, brokers said.

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Even before the Peregrine news broke late Friday, market players were braced for more selling this week.

Banks raised interest rates 75 basis points on Friday, just after the market closed, dealing the market another unpleasant surprise. The rate rise was well anticipated but most traders had been expecting no more than a 50 basis point jump.

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Brokers expect property and banking shares to be the first shares up for sale today.

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