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Precy Dumlao, Opalesque Asia:

The financial drawdown in May did not spare the Asia Pacific markets, which suffered the worst performance since October 2008, according to the latest Research Insights newsletter from Singapore-based consulting firm GFIA Pte Ltd.

During the month, the MSCI Asia Pacific lost -9.8% while the MSCI Asia Pacific ex-Japan plunged -11.1%. Smaller ASEAN markets such as Singapore and Indonesia, plunged -10.0% and -8.2%, respectively and experienced their fair share of the sell-off as well. GFIA said these poor performances were influenced by the European debt crisis and the tension in the Korean peninsula as well as Beijing’s announcement of tighter economic policies. All these factors led to investors to take a “sell first, ask later” stance.

However, GFIA noted a return of risk aversion and bargain-hunting towards the end of May which saw the markets bounce back.

Japan’s ballooning debt Japan ended its Fiscal Year 2009 on a positive result and economist projected promising revenue forecasts for FY2010. But the strengthening Japanese Yen increased pressure on currency sensitive industries, particularly export dependent companies. The Topix and Nikkei 225 fell -8.0% and -8.8% respectively during the moth. The Mothers Index declined -15.5%.

Adding to the woes of Japan was the resignation of Prime Minister Yukio Hatayoma on June 2. Toyomi Kusano, presiden......................

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