Singapore fears over new Sars case

THE dreaded Sars virus has resurfaced in Asia with a single and very puzzling case in

Today there was further local weakness, but it was not severe. The Straits Times index - which posted its largest drop in close to half a year yesterday - dropped only 4.55 points, or 0.3%, to 1575.43.

Brokers said Singapore investors had largely been reassured that the new case would not presage a widespread outbreak. Spying some bargains, they crossed their fingers and bought back in.

Flag carrier Singapore Airlines picked up 20 cents, or 1.9%, to S$11, erasing some of yesterday's 7% tumble. United Overseas Bank, a major local lender and convenient proxy for the market as a whole, was 20 cents, or 1.5%, better at S$12.70. Fellow bank Oversea Chinese Banking Corp gained 10 cents, or 1%, to S$10.70.

The Singapore case is curious on two counts. First the authorities do not yet know how the 27-year-old came down with the disease. He had not been to Sars-affected areas or met people who had the virus. He did work, however, in a laboratory where the Sars bug is handled, although the victim was engaged in a study of a different disease.

Also, there is some puzzlement because of differences over the precise definition of the diagnosis. Singapore says its national is a Sars case, but the World Health Organisation counters that it is too early to tell.

Brokers said if there were no more cases, positive sentiment should quickly return. But if it spread, more weakness would swiftly follow.

Hong Kong, which was also hard hit by Sars earlier this year, experienced a steeper fall. Undermined by the drop in US equities overnight and the renewed anxiety over Sars, the Hang Seng index backtracked 237.2 points, or 2.15%, to 10,809.52.

Cathay Pacific Airways slumped 35 cents, or 2.7%, to HK$12.75; global lender HSBC was HK$1, or 1%, lighter at HK$101; and leading exporter Li & Fung was clipped by 20 cents, or 1.5%, to HK$12.80.

A brace of Chinese airlines that are listed in Hong Kong also lost altitude, seemingly on Sars. China Eastern Airlines, based in Shanghai, lost five cents, or 4.3%, to HK$1.12, and rival China Southern was off 12.5 cents, or 5%, at HK$2.45.

Tokyo shares were softer despite an upwards revision in growth data for the April-to-June quarter, with the blame laid at Wall Street's door. The Nikkei 225 closed 65.72 points, or 0.6%, lower at 10,856.32. There was fallout from the rejigging of the Nikkei 225, which was announced yesterday after the market close.

Despite being widely tipped for inclusion Softbank, the internet provider, was left out. Its shares fell 120 yen, or 2.8%, to 4240 yen. Winner Konami, which makes video games, was up 70 yen, or 2.5%, at 2865 yen, while engineer JGC gained 47 yen, or 5.4%, to 929 yen. Telecoms engineer Comsys was also in but untraded.

Those ousted dipped or were level. Nippon Comsys shed three yen, or 0.5%, to 643 yen; Toa fell five yen, or 3.3%, to 148 yen; and Hazama was level at 24 yen.

South Korean markets were shut for a national holiday.