Subprime crisis - Its effect on Malaysia, SEA

It has been one week since the Dow Jones plunged hard due the subprime crisis. We would like to know how it affects Malaysia and the region.

Malaysia.
Malaysia doesnt get direct impact from the crisis. However, we do get effected indirectly. What happened in the US has created panic among our institutional investors, especially the bank in our countries. The investors loss their confidence and sold their shares fearing that the market would stumble again. Personally, i dont think that our market will be hit hard because, given the subprime issue, we do not have such practice in Malaysia (even if we do have, the amount is insignificant).

Region.
Across the region, from Sydney (down 1.54%) to Singapore (down 4.3%), Manila (down 6.01%) to Mumbai (down 3.7%), Shanghai Composite Index off 2.4%, following Hong Kong's decline of 3.3% and Taiwan's 4.46% drop.

The news created panic, and if the selling off shares persist (big time cash-out), liquidity is drying out. However, I'm not sure why the ripple from the US impact Asia market hard, especially for the South Korean market. It is maybe due to South Korean banks and insurers invested a combined US$850 million in US subprime-mortgage-related bonds.

Japan (Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc) has also had financial deals with the subprime loan lenders, but in the small amount.