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TOKYO, Dec 29: Tsunamis killed tens of thousands of people but the Indonesian and Indian stock markets are hitting record highs on perceived economic good times, in a sign of the brutal disconnect between investors and the poor who suffered the tragedy.
The earthquake, so powerful that it literally changed the map of Asia, has been duly noted and shrugged off by markets more moved by news that Americans went on an unexpectedly large shopping splurge for Christmas.
For investors, the headline figure since Sunday has not been the catastrophic death toll in remote stretches of the Indian Ocean among people who were hardly movers and shakers in the global economy.
Instead, the business community has paid more attention to studies that foreign insurance firms were largely unscathed by the killer waves and that major tour operators have been forced to re-route holidaymakers.
International analysts said the sad truth was that the market impact was seen as most significant in Thailand and Sri Lanka because in those countries foreigners supporting vital tourist industries were killed.
"Obviously with a lot of loss of life, a lot of time is needed to clean up the mess, bury the people and find the missing. But it's not necessarily a really big thing in the economic sense," said Eddie Wong, chief Asian strategist for ABM Amro.
"The damage to the good hotels seems not to be serious. Most of the damage was to huts on the seaside," he said of the situation in the Thai resort island of Phuket. "And even if some hotel chains may be affected, there are also economic beneficiaries such as cement (companies)," he said.
In Indonesia, the corpses piling up in Aceh are of little consequence to the global economy as the area was already out of bounds due to insurgency. Aceh's most important resource was oil and gas to which there have been no reports of damage, said Wilianto Ie, senior analyst with CLSA Indonesia.
"It is a big humanitarian issue, but the only concern from an economic point of view is whether the government has the money to rebuild Aceh quickly and help people there, and with so many donor countries and donations at least the burden will not change the outlook of the Indonesian economy," he said.
Jakarta Stock Exchange hit a new high on expectations of strong corporate earnings next year and GDP growth after international credit agencies praised Indonesia's economic restructuring, dealers said.
FAMILIAR TERRITORY: In India, where the Mumbai Stock Exchange also hit a record high on Tuesday, such a disconnect between investors and the public has been seen before.
The market surged forward last year on the free-market reforms of the Bharatiya Janata Party government - which was thrown out in April-May polls this year on the back of anger at the reforms by rural poor voters _ an election that sent the bourse to a record fall.
But in a country as diverse as India, investors were little affected by the mayhem on the Andaman and Nicobar islands 2,250kms away. The city's stock exchange hit a record high on Tuesday on buying activity on optimism about India's economic outlook cheered by an easing of global oil prices, which went back up on Wednesday.
"It is not that the broking community is indifferent to disasters or feelings," said Vijay Tilakraj, manager with the Cholamandalam Securities brokerage firm in Mumbai.
"They are very much concerned, but the reaction would have been seen if business had been affected. Business sense probably tends to overrule everything else," he said.
Analysts said many investors were on holiday this week, with those still at work taking a wait-and-see approach. Western countries' markets have ignored the tsunamis, with Wall Street springing on Tuesday to a three-and-a-half-year high on US consumer confidence data.
"From an Australian corporate perspective, and for developed markets generally, there's pretty slim exposure to these countries," said Adam Dixon, a dealer at Ausbil Dexia in Sydney. -AFP
