SE Asia Stocks-Slump as Britain votes to exit EU
By Anusha Ravindranath June 24 (Reuters) - Southeast Asian stocks were rattled on Friday after Britons voted to leave the European Union in a historic divorce, sparking a panic selloff in risky assets worldwide as investors bet on safe-havens such as gold. World financial markets plunged after nearly 52 percent of Britons turned their back on the 28-nation bloc, forcing the resignation of U.K. Prime Minister David Cameron and creating the biggest global financial shock since the 2008 economic crisis. Brexit rocked commodity markets as well, as oil and copper prices slumped, while safer assets such as gold raced to hit more than two-year highs. "Certainly, the uncertainty quotient is going to shoot up over the next few days, as markets digest the ramifications of Brexit," said Vishnu Varathan, a senior economist at Mizuho Bank Ltd in Singapore. Investors could continue to be risk-averse in the short term while the dollar and gold could strengthen further, he added. The sterling sank 10 percent in value to its weakest since before the 1985 Plaza Accord on Friday, triggering a global rush of capital into the traditional security of the yen and the Swiss franc. "The effect of this exit is pretty much still a question mark," said Alex Tiu of AB Capital Securities Inc in Manila, adding investors would be on a wait-and-watch mode. "This is going to be an isolated case," said Manny Cruz of Asiasec Equities Inc. The Brexit effects won't be long term, unless other members of the bloc decide to leave the EU, he said. Singapore ended down 2.1 percent, its lowest close since May 13, as banking stocks took a hit. The index lost 1 percent on the week. DBS Group Holdings Ltd fell 2.7 percent, while United Overseas Bank Ltd shed 2.3 percent. Philippines finished down nearly 2 percent after hitting a 13-month high in early trade. In a reaction to the Brexit vote, the country's central bank said more volatility can be expected in domestic markets in the near term, but it was ready to provide liquidity as needed. Vietnam also closed nearly 2 percent lower, with trading volumes on the Ho Chi Minh Stock Exchange surging to its highest since June 2014 at 270 million shares. Jakarta closed down nearly 1 percent, led by consumer cyclicals. "The current reaction of the market is flight to safety," said Taye Shim, a strategist with Daewoo Securities in Indonesia. "The long term impact would depend on how the value of the dollar would unfold." The Brexit impact would be much lesser for Southeast Asian regions, particularly Indonesia, which has low trade ties with Europe, Shim said. For Asian Companies click; SOUTHEAST ASIAN STOCK MARKETS STOCK MARKETS Change on day Market Current Previous Pct Move close Singapore 2735.39 2793.85 -2.09 Bangkok 1413.19 1436.4 -1.62 Manila 7629.72 7729.78 -1.29 Jakarta 4834.569 4874.309 -0.82 Kuala Lumpur 1634.05 1639.98 -0.36 Ho Chi Minh 620.77 632.27 -1.82 Change on year Market Current End 2015 Pct Move Singapore 2735.39 2882.73 -5.11 Bangkok 1413.19 1288.02 9.72 Manila 7629.72 6952.08 9.75 Jakarta 4834.569 4593.008 5.26 Kuala Lumpur 1634.05 1692.51 -3.45 Ho Chi Minh 620.77 579.03 7.21 (Reporting by Anusha Ravindranath in Bengaluru; Editing by Biju Dwarakanath)
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