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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

THE WORLD IS THE INVESTOR'S STAGE

Globalization and the Net will empower future shareholders and savers

By Cesar Bacani


asia in the new millennium
Mapping the Future The future wealth and size of Asian nations

The 21st Century By Arthur C. Clarke

Asia Trends 2000 The promises and perils of one wired world


The Microchip Silicon will get into everything
The Power As the region prospers, chances for conflict may become greater
Essay by Fidel Ramos Ending repression was easy; now we must defend freedom
The Dynasty It's here to stay
The Classes Many more Asians may escape poverty
The People Democracy in Asia will become increasingly deep-rooted
Essay by Bishop Carlos Ximenes Belo Shifts to new paradigms may include the "common good" and spirituality
The Mind Classrooms of the future will be virtually unrecognizable
Essay by Stan Shih The challenge of creating markets in a competitive world
The Body Science will soon deliver miracle cures, designer babies and new dilemmas
The Soul Asia seeks a new cultural identity
Essay by the Dalai Lama Balancing material progress with inner development to achieve true success
The Food Are the pushers of genetically modified edibles out to lunch?
The Vacation Inner and outer space are the destinations of the future
The Design Asia still has a place in the shape of things to come
The Metropolis Sweeping global changes are reshaping urban destinies
The Earth Environmental awareness is growing
The Jobs New and reinvented careers will fire the imagination
The Money The cashless society is on the way
The Investor Globalization and the Net will empower future shareholders and savers
The Sexes Democracy, capitalism and the Internet can lift women to the top
Essay by Marina Mahathir In Malaysia, we should change the way society looks at their roles
The Family The family promises to be much different than it is today
The Economy New ways of working call for new ways of thinking
Essay by Donald Tsang Financial well-being is a responsibility for each nation and the world
The Network The connection will go much deeper


The Asiaweek Round Table on ASEAN in 2020

Celebrations Asia is gearing up

Celebrities How some of the region's most visible personalities intend to welcome the New Year

Millenium Dictionary From pop anthems to dawn sites and midnight nuptials, a guide to 2000

I WAS RECENTLY TAKEN aback when I was shown a stock certificate. Do people still keep these documents? How easily we forget. Just two years ago, I was myself signing and hoarding elaborate art-nouveau-ish scrolls - along with assorted specimen-signature cards, acknowledgement receipts and assignment slips - as I bought shares in Philippine companies. My Manila stockbroker had huge safes to store his clients' certificates, just arrived from the clearing agents or lodged with him for trading. His office had a circular pit surrounded by blackboards. Clerks would write down the latest stock prices there, as clients sat on benches and made investing decisions.

Today, my holdings are all in the form of electronic entries in my broker's databank. The Philippine Central Depository keeps the ownership records. My broker is selling most of his vaults and moving to smaller premises - he no longer needs a pit, and computer screens, not blackboards, post and update stock prices. I also invest in Hong Kong, where I live. I do not have face-to-face dealings with my online broker since I trade through my computer. And not just Hong Kong stocks and warrants. I can also buy and sell U.S. instruments. At the moment, my orders are routed through a dealer - I cannot trade directly on the bourse. That may change as Hong Kong authorities move on far-reaching reforms, including the merger of the stock and futures exchanges.

Imagine what Asian investing will be like in the new millennium. Here is my wish list. One entity handling my Philippine and Hong Kong stock portfolios - plus my bank accounts, mutual funds, treasury bonds, real estate, insurance policies, overdraft facility, credit cards and mortgages in both places. The same entity facilitating trades in any exchange around the world - and giving me access to audited corporate results, earnings forecasts and other information so I can make informed decisions. One integrated, up-to-the-minute online financial statement, the money figures in the original currencies and converted into U.S. dollars or another unit using real-time exchange rates. All these and rock-solid privacy, confidentiality and anti-fraud protection too.

Mark Hansen, the partner in charge of financial-services practice in Asia at international management consultancy Booz-Allen & Hamilton, has some ideas about the future. "Asia will basically follow many of the major developments we already see in the more advanced Western markets," he says. "The changes will vary country by country, based on the level of economic and financial development, regulatory liberalization and other factors." He cites five key trends: 1) the coming-of-age of capital markets as an important source of corporate funds; 2) the withering away of traditional investing channels because of online trading; 3) the slide in transaction and other fees as middlemen are cut out; 4) the rise of institutional funds like unit trusts and pension funds; and 5) the emergence of retail investors as a force in financial markets.

Japan, Singapore, Hong Kong and Australia will probably be at the vanguard. Other countries, including giants China and India, cannot afford to fall behind. Markets that currently have primitive financial systems can catch up. Vietnam, for example, has no stock exchange, but when it launches one, organizers would be daft not to leap-frog on to scripless trading and other cutting-edge systems. The question is whether liberalization and openness will characterize regulatory regimes. The region really has no choice. The demographics - millions of Asians are young, educated and big savers - work against business-as-usual low-yield local products. Unless bourses, stockbrokers, banks and governments shape up, this Internet-savvy generation may vote with their wallet by putting their money in, say, New York even as their countries' best companies list there.

Globalization, financial-services liberalization and technology will empower 21st-century investors. If they think their stockbroker charges too much, they can log on to a website to compare its fees and costs with others in and out of the country. Another site can call up a list of local and international banks sorted by their interest rates on deposits and loans. Financial institutions will be forced to offer competitive charges and yields. The same dynamic will apply to listed companies. Because investors are spoiled for choice, owners and managers will be under pressure to be more transparent, accountable and respectful of shareholder rights.

So will regulators and stock-market officials. "There will be a convergence in global rules, for example, on company disclosures," says Hansen. "But I don't believe everything will converge into a 'best-practices' world. Different exchanges will offer different value propositions and risk profiles to different groups of companies and investors." And volatility. In a wired world, irrational exuberance and unexpected crashes can erupt as day traders buy and sell stocks in seconds, and rumors and facts circle the globe instantaneously (although regulators may be able to curb trading in times of uncommonly wild swings). Don't forget the cons. With billions of people as potential marks, fraudsters can try nursing pyramid schemes into worldwide scams. Computer hackers too - banks and other service providers will constantly buttress security walls, but some people will always try to breach them.

The risks can become so scary and the range of investment options so bewildering that many Asians may opt to let professional managers invest their money. Mutual funds could thus become as big in the region as they are now in the U.S. Global powerhouses - the outcome of mergers among banks, stock brokerages, asset-management companies and insurance groups - will be positioning to offer comprehensive services. "We are talking about a lot more than a customer being able to bank online," says Alan Gemes, Asia-Pacific leader for the financial-services industry group at PricewaterhouseCoopers. "We are talking about every aspect of client service and product delivery. We are talking about the ability to create a highly personalized interaction for a consumer or business customer, uniquely crafted for him and delivered at low cost."

Well, not that low. If you want the works - banking, stockbroking, investment advice, insurance, mortgages, real-time accounting - you must be prepared to pay, although not as much as what private bankers charge rich clients today for similar services. (Higher volumes bring economies of scale.) Or you can keep track of your finances yourself using off-the-shelf software, which can automatically update the value of your stock portfolio, for example, by tapping into a provider of real-time quotes. Niche companies offering specialized services like this will not disappear. One-person outfits that help people navigate the forest of investment choices will thrive as well. Ka-ching! Excuse me while I check whether the domain name stocksguru.com has been taken.


HOT STOCKS FOR THE 21ST CENTURY

Morgan Stanley Dean Witter studied 500 leading Asian companies to determine how long they can sustain their advantage in product excellence, brand name, distribution and management. The U.S. stock brokerage also took into account protective tariffs and other government help as well as growth potential and financial soundness. Twenty-seven stocks were judged likely to stay on top for at least the next 10 years. Don't look for Asian technology firms. The sector is apparently too volatile for Morgan Stanley to bet on in the future.

Company Sector No. of Years Expected
    to be Competitive
Hindustan Lever (India) Consumer products 25+
Asia Pulp & Paper (Indonesia) Paper & Forest products 20
Indah Kiat (Indonesia) Paper & Forest products 20
Fanuc (Japan) Machinery 20-Oct
Kao (Japan) Consumer products 20-Oct
Minebea (Japan) Machinery 20-Oct
Mori Seiki (Japan) Machinery 20-Oct
NSK (Japan) Machinery 20-Oct
Honda Motor (Japan) Automotive 15
POSCO (South Korea) Steel 15
Toyota Motor (Japan) Automotive 15
Bridgestone (Japan) Automotive 10
BSES (India) Utilities 10
Cathay Pacific (Hong Kong) Transportation 10
CLP Holdings (Hong Kong) Utilities 10
HDFC (India) Banking 10
HSBC (Hong Kong) Banking 10
ITC (India) Consumer products 10
Kirin Brewery (Japan) Consumer products 10
News Corp. (Australia) Consumer products 10
PTT (Thailand) Energy 10
Rio Tinto (Australia) Steel 10
Seven-Eleven Japan Retail 10
Singapore Airlines Transportation 10
Suzuki Motor (Japan) Automotive 10
Woodside Petroleum (Australia) Energy 10
Zhenhai Refining (China) Energy 10


This edition's table of contents | Asiaweek home

AsiaNow



WASHINGTON
U.S. secretary of state says China should be 'tolerant'

MANILA
Philippine government denies Estrada's claim to presidency

ALLAHABAD
Faith, madness, magic mix at sacred Hindu festival

COLOMBO
Land mine explosion kills 11 Sri Lankan soldiers

TOKYO
Japan claims StarLink found in U.S. corn sample

BANGKOK
Thai party announces first coalition partner



TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state



ASIAWEEK:

COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


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