The currencies of Thailand, Indonesia, the Philippines, Malaysia and South Korea all plunged to record lows against the dollar, and their stock markets plummeted on the currency weakness and concerns about the soundness of the domestic banks. But it still may take time before investor confidence is restored in these former Tiger economies. By the end of 1997, the key stock-market indexes across much of Asia were sharply lower. But the sharp depreciation of the Asian currencies against the dollar meant that these losses were much bigger for investors who measure their returns in dollar terms. For the fund managers who run Asian portfolios, it was a rough year.
Many experts still reckon it is far too early to shift back into Asian stock markets.
Local currencies are still extremely volatile, and continue to whiplash the Asian stock markets. Sir John Templeton recently invested in a variety of South Korean funds. Mark Mobius, the emerging-market guru at the Franklin Templeton fund group, has been investing in certain Asian stocks in recent months, even as markets were declining. And financier George Soros hinted last weekend that he is considering buying Korean stocks. Elsewhere in Asia, Indian closed-end funds are attractively priced at the moment, with their shares now trading at a reasonable discount to NAV, some fund followers say.