WORLD BARING BROTHERS COLLAPSE ROCKS WORLD FINANCIAL CENTRES

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(27 Feb 1995) English/Nat • The collapse of one of Britain's oldest merchant banks sent shares nose-diving in financial centres around the world. • Staff who work for Barings bank were also worried about their jobs. • But not everyone will be affected. Barings is also a big player in the Latin American markets but its six offices there and one in Mexico city will continue to operate normally. • The real damage was done in the Far East markets and that's where the effects of the collapse were first felt. • In Japan shares on the all-important Tokyo Stock Exchange dropped to their lowest level for 14 months. • The crisis emerged after the Bank of England announced that Baring Brothers and Co. Ltd. had been hit by losses of nearly 800 (m) million dollars from large-scale unauthorized trading in Southeast Asia. • In Japan the key Nikkei share average was down 802.80 points or 4.59% at 16,670.14 at the lunch time bell after two hours of frantic trading. The market finally closed at under 17,000 points. • It was the first time the Nikkei average had fallen below 17,000 in 14 months and the lowest point the Nikkei share average had reached at midday since December 8 1993. • Brokers said that many people thought a collapse of a bank like Barings could never happen. • SOUNDBITE: • Well I think panic is the best way to describe it. We have seen very sharp falls in the stock market and we have seen very sharp falls in the futures market where all the players have been selling in advance of Barings having to sell to cover its positions. • SUPER CAPTION: Jason James, strategist of James Capel Pacific Limited • SOUNDBITE: • Well I think the impact is going to be much bigger in Japan than anywhere else because it is believed that it is Nikkei positions that are the big problem for Barings and they will have to liquidate those. Now the administrators will have to liquidate Barings other positions in other markets so that there will be some negative impact but I don't believe that you will see other markets falling in the same manner as Tokyo has been. • SUPER CAPTION: Jason James, strategist of James Capel Pacific Limited • The Japan Securities Association announced before start of trading that Barings Securities would be suspended from trading on the Tokyo stock exchange. • In Singapore stocks followed the rest of the Far East market and plunged in early trading. The 30-share Straits Times Industrial index was down 4.11%, or 86.88 points, to 2,027.64. • Meanwhile, analysts say there's nervousness on Wall Street because of the collapse of Britain's Baring Brothers Co Bank. • Financial players in New York are wondering that volume of unauthorised sharedealing could happen in a bank the size of Barings and why a 28 year old trader is being blamed. • • Find out more about AP Archive: http://www.aparchive.com/HowWeWork • Twitter: / ap_archive • Facebook: / aparchives • Instagram: / apnews • • • You can license this story through AP Archive: http://www.aparchive.com/metadata/you...

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