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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.460

-1.4%

1:19 PM EST

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To: Shane M who wrote (821)	6/28/1998 10:37:00 PM
From: Ron Bower	Read Replies (1) of 1418

shane, Related to your post and some of my earlier comments. Comment on Japan's economic situation by Head of Research at HSBC. ''What's going on is a shortage of capital in the financial industry, banks are being forced to cut back overall lending...I think banks naturally feel more comfortable with their larger customers so they tend to cut off smaller and more marginal customers first. I think you will continue to see small companies face sharp increases in borrowing costs and some will get cut off altogether and bankruptcies will continue to rise.'' Japanese banks are the primary lenders to ASEAN countries. This comment reflects on Japanese companies, but the banks will be cutting off the companies in other countries before they hit Japans. Even if companies have the opportunity to expand because the devaluation of currencies has given them an advantage, they will not be able to get the needed capital - unless they can find it in the US and that isn't likely. It may take a while, but many of Deswell's competitors will be forced into bankruptcy and others will have to liquidate assets to satisfy the banks. JMHO, Ron

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