For a decade it was a symbol of Hong Kong's progressive financial independence, making a profit of $1 billion in 1995. Yesterday the mob was at the gates, as hundreds of angry investors besieged the offices of Peregrine Investments Holdings Ltd, brought down by Asia's financial crisis in general and bad debts in Indonesia in particular.
The fall of the posh Anglo-Chinese institution, and the raising of interest rates to protect the Hong Kong dollar, helped crack already strained confidence in Hong Kong yesterday. In across-the-board selling, the Hang Seng Index plunged 8.7 per cent, to close at 8,121.06.
As always, bad news in one Asian trouble spot helped create new crises elsewhere. In Bangkok, the Thai baht sank to over 56 to the US dollar, another record low. The Taiwan dollar was also driven to a 10-year low against the dollar, and finished at 34.81, as investors sought refuge in the US currency, and stocks nose-dived by nearly 5 per cent.
Meanwhile, officials from the International Monetary Fund and the US government, who are touring other stricken capitals in Asia, held emergency talks with government leaders in Jakarta and Seoul in an effort to revive investor confidence and calm financial turmoil. In the middle of the new crisis over Hong Kong, which led to a marking down of shares in European markets, there were two positive developments.
Seoul's stocks and currency rose in value after South Korea's Finance Minister was told by IMF managing director Mr Michael Camdessus that the country's financial situation had been improving since November. And the currency held steady in Jakarta after IMF official Mr Stanley Fischer met President Suharto for 90 minutes and described the encounter as "very, very good", a remark which helped steady confidence after last week's crash of the rupiah. Mr Suharto also apparently told the Japanese Prime Minister, Mr Ryutaro Hashimoto, that Indonesia would meet all debt obligations and fully implement reforms agreed with the IMF. A US treasury delegation to Asia has added Hong Kong and Beijing to its itinerary. The delegation arrived in Singapore on Sunday and travelled on to Jakarta, where Deputy Treasury Secretary Mr Lawrence Summers will meet President Suharto today.
There was little evidence from the remarks of the US and IMF visitors that there is any fundamental change of thinking in Washington about the crisis in Asia, despite rising criticism throughout the region over the failure of IMF rescue packages to restore confidence in Thailand, Indonesia and South Korea, while the region faces a future with huge debt loads, bankruptcies, unemployment and political turmoil.
In contrast to the jitters evident in south-east Asia, a mood of cautious optimism was evident in South Korea yesterday after a record trading day on hopes the worst may be over in the country's debt crisis.
Peregrine collapse body-blow to Hong Kong: page 16; Challenge to Suharto in Indonesia: page 11; Editorial comment page 15.