Hong Kong tycoon Li Ka-shing, the Warren buffet of Asia, has bought heavily into bank of East Asia after stocks of the Asian bank plummeted more than 11 percent.

Warren E. Buffett, the America’s most famous investor and one of the world’s richest men, announced on Tuesday that he would invest $5 billion in Goldman Sachs, the embattled Wall Street titan, in a move that could bolster confidence in the financial markets.

Following his lead, Li Ka-shing, who has built a massive empire ranging from shipping to education in Asia and beyond, on Thursday reportedly swooped in to buy Bank of East Asia’s shares, bolstering confidence and Asia and helping Hong Kong’s fifth-ranked lender stay afloat.

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Two days before Taro Aso an outspoken conservative who has advocated a return to old-style government spending to stimulate Japan’s economy, was nominated to power, Nomura Holdings, Japan’s largest brokerage, reached a deal to buy the Asian operations of Lehman Brothers.

The Japanese bank announced it would pay US$225 million for Lehman’s equities and investment banking operations across Asia, which includes Japan and Australia. In bailing Lehman’s out, Nomura told the AFP it would offer employment to all 3,000 Lehman Brothers’ workers in Asia.

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China and India are aggressively and strategically competing over gaining control of international waters south of Hambantota, Sri Lanka. Over the years, the two countries have been fortifying their forces around the vital water way in a bid to gain influence in the region.

The vital water way lies south of Sri Lanka and north of Antarctica in the Indian Ocean and is one of the world’s great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, return with toys, clothes, television sets and sneakers for European consumers.

According to the International Herald Tribune these tankers provide 80 percent of China’s oil and 65 percent of India’s fuel desperately needed for the two countries’ rapidly growing economies. Japan, too, is almost totally dependent on energy supplies shipped through the Indian Ocean. Any disruption — from terrorism, piracy, natural disaster or war — could have devastating effects on these countries and, in an increasingly interdependent world, send ripples across the globe.

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There is a brilliant white light at the end of the tunnel of U.S. financial woes - lucrative jobs in emerging Asia. As investment banks fold in the U.S. and hundreds lose their livelihoods, banks in India and China are lapping up wall street bankers by the dozens. Asian economies which are growing at an average of seven percent annually, can easily absorb these globally experienced whiz kids.

New York’s governor reckons 40,000 Wall Street jobs could go in a worst-case scenario, with talk swirling of more bank deals and mergers.

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The fallout from the collapse of Lehman Brothers caused panicked selling of banking shares on Tuesday throughout Asia, where many of the failed American company’s biggest creditors are based. Even as analysts and bankers said the effects of Lehman’s failure on Asian financial markets would be limited, the 158 year old investment bank closed operations in three of their Asian subsidiaries - Lehman Brothers Asia, Lehman Brothers Securities Asia and Lehman Brothers Futures Asia, the International herald tribune reported.

The New York based investment bank also ceased trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, but Lehman Brothers Asset Management, its asset management company, is expected to continue operations as usual.

Lehman Brothers biggest exposure in Asia was undoubtedly in Japan where it holds outstanding loans worth US$1.6 billion from seven Japanese banks, including Aozora Bank in Tokyo, to which it owes US$463 million. Lehman further told IHT that it owed Mizuho Corporate US$289 million and US$231 million to Shinsei. It also identified six other Asian banks, including the Bank of China and a unit of Citigroup based in Hong Kong. (more…)

Our sister website, China Briefing, has been running an excellent series over the past few months on China’s relations with its neighbors. While many concentrate on action within Asian nations themselves, there is little commentary about who is influencing who, and where border trade is developing.

The past week has seen two threads go up on that site concerning India and Pakistan which should be of great interest to 2point6billion readers. Links to them and to the complete series are listed below. Enjoy.

Rivals and Partners: India and China Look Forward

China and Pakistan’s Enduring Alliance

Complete Series

Asia’s growth tigers are mellowing down according to the revised statistics on the regions growing economies released by the Asian Development Bank. According to the bank, The slowdown in the U.S. economy is now gradually impacting Asia’s developing nations which are expected to grow at 7.5 percent this year, the slowest growth in the region since 2003. The ADB also slashed the 2009 growth forecast to 7.2 percent from the previous 7.8 percent as it said the global slowdown, high inflation and tight monetary policy would cut back on expansion.

Reuters quoted the report - “If the sub-prime crisis worsens significantly, Asia is bound to suffer much more serious financial effects, including an abrupt reversal of the capital inflows that have held up well so far.” Experts also believe that the decline of the U.S. economy, could change global war politics and influence trade thereby slowing the rapid pace of globalisation we have witnessed in the least few years.

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Investment banks, stock markets, financial institutions and governments across Asia showed their appreciation to the U.S.  government over the takeover of Fannie Mae and Freddie Mac. The U.S. government bailout was a welcome relief after several central banks in the region expressed growing alarm over the future of their vast investments in the two ailing mortgage lenders.

Japan, South Korea and China were the worst hit Asian economies when the real estate mortgage lending firms declared their losses earlier this summer. The Washington Post said Asian investors, led by central and commercial banks in China, Japan and South Korea, are among the largest holders of Fannie Mae’s and Freddie Mac’s mortgage-related debt, the value of which has now effectively been guaranteed by the U.S. government.

The government bailout buoyed markets from Taipei to Tokyo on Monday, successfully calming growing concerns of investor flight in South Korea. The Tokyo key stock index rose 3.4 percent on Monday. Hong Kong’s jumped 4.3 percent, Seoul’s 5.2 percent, and Taiwan’s 5.6 percent.

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Asia is booming and there are hard facts to prove it. According to the Forbes report on Asia’s youngest billionaires,  the region is home to the world’s fastest growing population of the wealthy. According to the World Wealth Report, the population of China’s millionaires jumped 20 percent last year. The billionaire population grew even faster. The March Forbes‘ list included 42 Chinese billionaires, up from 20 the previous year. Keeping pace are Indian millionaires who’s presence jumped 23 percent last year. The billionaire count soared to 53 from 36 the previous year.

Also worthy of note, is that India’s four riches billionaires worth a gross of US$180 billion together are worth more than China’s 40 wealthiest individuals. Nonethless, the rich are growing richer faster in China than in India - China’s richest person, Yan Huiyan, is worth US$16.2 billion, seven times the net worth of last year’s No. 1, Wong Kwong Yu.

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Is it the deadly combination of a failed economics and politics that’s tarnishing Shining Asia’s rise to the top?

Coups, protests and resignations have been the flavor of the past month in Asia, which has seen uprisings spread across the region, from Pakistan to Japan. The potent combination of a rudderless society crippled with inflation woes, and plummeting stock markets has suddenly left Asia in limbo.

Stocks fell around the world Monday, led by Asian exchanges as concerns about a slowing global economy weighed heavily on the markets, AP reported. Adding to the crisis, were analysts who expect further near-term volatility and are warning foreign investors to stay away until the year-end.

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