Won, Malaysia's ringgit decline

ASIAN CURRENCIES ROUND-UP

Asian currencies fell with South Korea's won declining by the most in more than a week, on speculation overseas investors are repatriating funds after selling emerging market stocks.

The currency is poised for the worst month since April 2004 as the US subprime mortgage losses spread to credit markets, prompting investors to steer away from emerging market assets.

Fund managers abroad today were net sellers of Korean shares after the US equities declined on a report showing sales of previously owned homes were the lowest in almost five years.

"There have been so many foreigners selling domestic securities, so they have demand for the dollar against the won,'' said Jo Hyun Suk, a trader in Seoul at Korea Exchange Bank, the country's fifth-biggest lender.

The subprime problem has also strengthened the dollar against emerging market currencies. The won weakened 0.1 per cent to 939.70 per dollar at the 3 pm close, the biggest decline since August 17, according to Seoul Money Brokerage Services.

Money managers abroad sold $7.9 billion more Korean equities than they bought this month, stock exchange data show.

Other Asian currencies also declined on speculation the US housing slump will slow the world's biggest economy, crimping demand for the region's exports. The Indonesian rupiah weakened 0.2 per cent to 9,399 and Malaysia's ringgit fell 0.3 per cent to 3.4940.

Indonesia's benchmark index of shares declined 0.7 per cent, while the Kuala Lumpur Composite Index in Malaysia lost as much as 0.7 per cent before closing little changed.

Mortgage Market
DBS Group Holdings, Singapore's largest bank, said it had S$2.4 billion ($1.6 billion) at risk from collateralised debt obligations, or bundles of bonds and loans, more than earlier stated.

Barclays Plc rebuffed a report in the Financial Times that it had "exposure'' in the "low hundreds of millions of dollars'' to failed debt funds. "Once we have news on the mortgage market, the foreign exchange and equity markets will react accordingly,'' said Ho Woei Chen, currency analyst at United Overseas Bank in Singapore.

"I don't think people are willing to take on big positions at this time.''

Elsewhere in Asia, the Singapore dollar dropped 0.2 per cent to S$1.5218, Thailand's baht was little changed at 34.35 in onshore trading.

The Taiwan dollar held at NT$33, according to Taipei Forex Inc. The peso was little changed at 46.72, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker.

"People are still generally nervous because of the US subprime problem and so we continue to see investors shifting to the dollar for safety,'' said Rafael Algarra, treasurer at Security Bank Corp in Manila.