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03/09/2008 | Asia Regional Markets - Midday Update | | | | |

05:26 GMT | | | | | |

| High | Low | Last | 03-Sep | %Change |

USD/SGD | 1.4366 | 1.4314 | 1.4358 | STI | -1.06 |

USD/THB | 34.45 | 34.42 | 34.42 | SETI | -0.95 |

USD/KRW | 1158.7 | 1131.6 | 1154.5 | KOSPI | 1 |

USD/CNY | 6.8487 | 6.843 | 6.8476 | SSE.A | -1.24 |

USD/MYR | 3.442 | 3.425 | 3.438 | KLCI | -0.25 |

USD/IDR | 9218 | 9203 | 9203 | JKSE | -1.52 |

USD/PHP | 46.68 | 46.47 | 46.51 | PSI | 1.54 |

USD/TWD | 31.876 | 31.75 | 31.835 | TWII | -1.69 |

USD/HKD | 7.8092 | 7.8075 | 7.8091 | .HSI | -1.8 |

USD/INR | - | closed | - | BSESN | closed |

3 September 2008

Asia Mid-Day Highlights

- China: Head of China Real Estate Chamber of Commerce said that Beijing could allow Property Trusts by the end of the year to support the property market as it cools.

- Thailand: Three flights from Jat Yai district of Songkhla province to the capital have been reportedly cancelled after supporters of PAD blocked entrances to the airport since Tuesday.

- South Korea: Plans to sell approx. $1 billion in sovereign bonds within the year unchanged, despite the recent turmoil in domestic financial markets according to Deputy Finance Minister Shin Je-yoon today. Expectations are for sales of 10-year bonds to start at a roadshow next week.

- Taiwan: In another goodwill gesture to Beijing, Taiwan plans to allow Chinese tourists entry via the outlying Taiwanese islands of Kinmen and Matsu. Those who meet certain conditions and who have permission may be granted landing rights or multiple visas when they arrive on the islands.

- The Philippine central bank has said that the drop in the PHP has been "rather fast" and that BOP should remain in surplus position both this year and next. BSP added that it expects gross FX reserves to rise further next year from an estimated $37 bln for 2008.

- The Philippine govt expects that some $2.5 bln in sovereign debt as official development loans will be raised next year; 9% higher than this year.

- South Korea's Deputy FinMin said that country is facing difficult times, but is certainly not in crisis.

- India: The government and India Inc plan to buy sizeable amounts of land overseas for cultivation in part of a long-term plan to keep prices of farm products under control. Prospects include neighbouring countries such as Myanmar and far off ones such as Paraguay, Canada, Australia and Africa. While discussions are still underway, the estimated acquisition for Paraguay alone is slated at around Rs 200 crore.

- Thailand: PAD core leader Sondhi Limthongkul has begun to show signs of compromise to end the political stand-off after army chief Gen Anupong Paojinda refused to take tough measure to disperse the PAD demonstrators. Sondhi proposed a 4-point demand before the PAD would relent; 1. that the government must promise not to amend the charter in its favour, 2. to observe the Constitution Court's order regarding Preah Vihear temple, 3. to suspend all mega-projects and 4. to commit to political reforms and increased public participation in politics. However, Sondhi made it clear that discussions of these demand could only begin once PM Samak agreed to step do wn.

- Telegraph: Troubled lenders in the UK may have tapped the BoE's emergency funding scheme for as much as GBP200bn, according to UBS - double the most aggressive estimates. When BoE Mervyn King first unveiled the Special Liquidity Scheme in April he indicated that it might be used for GBP50bn, while debt specialists forecast a total take-up of GBP90bn-100bn by the time the scheme closed on October 20. A Bank spokesman said yesterday: "As has always been the case, there is no cap on the scheme. Its size will reflect its use."

- WSJ: Hedge fund Ospraie Management, one of the biggest players in commodities, said Tuesday it is shutting down its largest fund after significant losses.The Ospraie Fund fell 27% in August alone due to bets on oil, natural gas, structured products and the fund has been selling off its holdings over the past three weeks, possibly contributing to the decline in commodity prices recently. The fund, whose assets peaked at $3.8b late last year, is the biggest run by Dwight Anderson, a veteran commodities investor.

Dollar still looking firm today as Cable remains heavy and EUR/USD below 1.4500. Kiwi and Aussie hitting fresh lows as more downside risks from crude oil, natural gas and commodities weigh on the pairings.

JPY crosses still heavy from earlier talks of large cross/JPY, AUD/JPY, NZD/JPY, EUR/JPY sales by Japanese accounts, funds and US houses. EUR/JPY and GBP/JPY off lows after staging modest rebound although still weighed. USD/JPY slightly stronger as we approach mid.

USD/Asians mostly overlooked the softer oil prices; while Gustav might have abated, the dollar tide was still crashing into Asian shores. Add to that, jittery sentiments in S Korea where the KRW plummeted despite intervention and jaw-boning was seen triggering fears of Asian currencies being subject to pressure. A softer CNY and more downside risks to equity markets highlight underlying risk aversion. With the dollar where it is, KRW grappling with pressure, the political situation in Thailand and Malaysia, there are few reasons to be short on the dollar.

Oil dipping in the Asian session once again as the dollar firms. Crude oil last traded at $109.26/bbl.

Gold little changed after extended consecutive losses. Weighed by cheaper oil. Spot gold last traded at $801.90 -802.90/oz.

NORTH ASIA

USD/KRW: Strong bullish move in opening trades heavily discounted softer oil with focus on the rallying greenback; BoK was seen intervening to cap strength in the USD/KRW and followed this up with the usual moral suasion/jawboning; prices still biased upwards.

USD/CNY: The higher mid-point fix, softer oil prices and strong dollar reinforce the upward bias in the USD/CNY though moves are checked by sentiments that CNY appreciation against dollar is not expected to reverse out.

USD/HKD: A firming bias was intact for the USD/HKD on the back of a rally in the forward market, soggy equities and a stronger greenback. Range of 7.8050-7.8100 seen with resistance 7.8110 first.

USD/TWD: Consolidating just above the 31.800 handle, upside in the USD/TWD was tempered by suspected intervention and profit-taking. Still, the strong bullish move in the greenback is likely to boost confidence for bets against TWD and squeezed the pairing.

SOUTH ASIA

US