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Here's today's news on Asia from TSC:
Asian Markets Update: Tech Stocks Pounded Across Asia
By Kaya Laterman
Japan Correspondent
3/13/00 4:18 AM ET
TOKYO -- Japan may technically be back in recession, but Monday's
continuing cat fight between two leading Japanese tech firms is proving
to be much more interesting news on which to trade.
Gross domestic product data which confirmed a second straight quarter of
economic decline came in slightly worse-than-expected, but was pushed
aside in investors' minds as they continued to beat down large tech and
telecom shares, two sectors already scorched over the past week. The
selling, which began with U.S. hedge funds, crossed over to Japanese
dealers last week and has now spread to retail investors.
The Nikkei 225 stock index fell 560.47, or 2.8%, to 19,189.93, while the
Topix index, which includes shares listed on the Tokyo Stock Exchange's
first section, tumbled 75.15, or 4.6%, to 1558.15. The Jasdaq small-cap
index lost 207.27, or 8.6%, to 106.04, while the Nikkei over-the-counter
shares shed 11.00, or 9.4%, to 2215.35.
The tech bashing is centering on Softbank and Hikari Tsushin, two
companies that only a month ago were heralded as the future of the
Internet revolution in Japan. Now the two firms are embroiled in bad
publicity, with top officials each blaming their counterparts at the
other firm for starting the continuing spat.
Hikari Tsushin, down 5500 yen, or 5.9%, to 88,500, couldn't shake off
talk that started last Thursday via magazine Bungei Shunju. The magazine
said the president of the firm pushes its salesmen to use strong-arm
tactics. Traders said that if true, this would hurt the credibility of
so-called New Japan companies. Rumors also swirled that the president
had been arrested for insider trading. The firm has denied both the
magazine's contention and the market rumors.
Investors are also growing wary of Softbank, down 5000, or 5.0%, to
94,200. Some say the firm's move to take over now nationalized Nippon
Credit Bank will be extra baggage the company doesn't need. In addition,
the chief financial officer of Softbank called for Hikari Tsushin's
president, Yasumitsu Shigeta, to step down from Softbank's board,
accusing Shigeta of stealing Softbank's business model.
Aside from the recriminations, there are also fundamental reasons behind
the battering being handed out to key tech stocks. First, investors are
locking in profits before the fiscal year ends on March 31. But more
than that, traders note that the price of Softbank, at $888.68 for a
single share, had simply run up too far, too fast -- it was up 37% in
the year to February 21, before beginning its sustained slide.
Sony (SNE:NYSE ADR - news - boards) fell 2000, or 7.6%, to 24,300. The
firm admitted that 340 of its PlayStation 2 game consoles that went on
sale March 4 in Japan had faulty DVD drives. Sony Computer Entertainment
is asking customers to send back the consoles in return for a new model.
Meanwhile, the greenback edged lower against the yen to around 105.84,
after hitting an intra day high of 106.67 following the release of
fourth quarter GDP figures. GDP for the October-December period fell
1.4% from the previous quarter, slightly below market expectations of a
0.9% decline. But the market concentrated on an upswing in corporate
investment, which rose 4.6% from the previous quarter.
Both government and private sector economists repeated forecasts that
Japan's GDP in fiscal 2000, which begins on April 1, will be stronger
than in the current financial year.
Hong Kong's Hang Seng index tumbled 735.18, or 4.1%, to 17,096.68.
Regional market woes, including those in Tokyo and Taiwan, prompted
investors to pile up stop-loss orders late in the afternoon. Index
heavyweight China Telecom (CHL:NYSE ADR - news - boards), slipped
HK$6.50, or 8.9%, to 66.50, as the market talked up the possibility that
a third regional telecom operator could be set up by China soon. The
firm's rival China Unicom is also reportedly speeding up efforts to list
on the stock market, traders said.
With numerous business ties to Japan's Hikari Tsushin, Pacific Century
Cyberworks shed 1.75, or 7.9%, to 20.40. At the same time as Softbank
was bashing Hikari Tsushin, a Softbank official also lashed out at the
motivations of PCCW Chairman Richard Li. Cable & Wireless HKT (HKT:NYSE
ADR - news - boards) lost 1.50, or 6.3%, to 22.40.
Taiwan's TWSE index lost 617.65, or 6.6% to 8811.95, as the popularity
of Chen Shui-bian, the Democratic Progressive Party candidate in next
Saturday's presidential elections, appeared to increase. The DPP was
once in favor of declaring independence from China. While it has
modified this stance, Chen is still perceived to be the most hostile
candidate to closer relations with mainland China, which regards Taiwan
as a renegade province. The government in Beijing has threatened
military action if Taiwan moves towards full independence from the
mainland, or even if it drags its feet in talks on re-unification.
JW
-----Original Message-----
From: listmanager@xxxxxxxxxxxxxxx [mailto:listmanager@xxxxxxxxxxxxxxx]On
Behalf Of Gwenael Gautier
Sent: Monday, March 13, 2000 12:12 AM
To: realtraders@xxxxxxxxxxxxxxx
Cc: realtraders@xxxxxxxxxxxxxxx
Subject: [RT] Re: GEN - bull or bear?
Well Asian and Japanese (blue chip) Net stocks in particular are down 50
to 70%
since Jan-Feb highs... No particular news, except people appeared to be
invested
with leverage, and are now forced to sell after simple initial profit
taking.
So it CAN go down and VERY fast. Whatever people say, think, do, it MAY
arrive and
ANY strategy SHOULD take this into account, whatever DOES come out in
the end.
Gwenn
wong wrote:
> Hi All:
>
> There are so many posts on the impending market crash I've lost count
of them.
>
> We've been concentrating on the DOW, S&P (futures) etc.
>
> How about looking at the thing from another angle?
>
> Please refer to the attached weekly charts of Russell 2000 and Nasdaq
indices.
>
> Where's the bear? I certainly can't see one at the moment.
>
> On the other hand, the oscillator indicators are telling us that both
> indices are at or near overbought levels. As I said in my earlier
post,
> this should alert us that in the future, the indices may have some
> retracement. If one is cautious, one should be prepared to liquidate
some
> stuff and take profit. As I also said, as long as the "market" is
bullish,
> it may not be very wise to go short.
>
> This applies, of course, to both Russell 2000 and Nasdaq.
>
> S&P and DOW certainly are in a different category, and should be
treated
> differently. That is, if they exhibit signs of bearishness (and I'm
not
> sure if they necessarily do), then it may not be wise to go long so
soon...
>
> Regards,
>
> Wong
>
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