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If Sars doesn’t get you Sarbanes might

In a period when panics have outweighed optimism among investors, the Sars epidemic is just the latest in a series of shocks that have cast doubt on Asian companies’ ADR prospects. • Chris Cockerill reports

UNTIL A FEW weeks ago Asia offered a glimmer of hope in a gloomy global economy. The region seemed to offer a prospect of growth - especially in China - in welcome contrast to stagnation in Europe and the US. Asian companies and their bankers had looked forward to capital raising and making new investments. Then the first reports emerged of a virulent life-threatening illness spreading out from a focus in southern China.

In the wake of growing panic, Euromoney asks a banker what is ostensibly a simple question: what will investors be seeing from Asian corporates in the American depositary receipts market over the rest of the year? But it plainly poses him problems. There is an uncomfortably long pause as he attempts to organize his thoughts into a positive and upbeat answer. After a few more seconds, a wry smile appears on his face. He gives up. "It's not going to be very good is it?" he says. "We are not going to see many new ADRs coming out of Asia for a while."

The banker has just returned from New York and looks thoroughly depressed. He continues: "The Iraq war is over and now investors are focusing on the trouble in Asia - In particular China and Hong Kong."

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