Softbank closed in Tokyo up 9000 yen to US equivalent of $1232. This in turn is up from the earlier US market close of $1200 even. It's nice to see Frankfurt up in early trading to the US equivalent of $1280. I would interpret this to mean that the US market had overcorrected to take it down to $1200. Those benevolent US market makers only have our best interest at heart so they maintain their usual $50 spread to insure that they can stay in business. (You wouldn't want them to ever lose money on any transaction, would you?)
More on the venture capital funds from Nikkei Net:
Tuesday, February 8, 2000
TSE 6-Day Moving Average Hits 11-Year High
TOKYO (Nikkei)--The six-day moving average of trading values of stocks listed on the first section of the Tokyo Stock Exchange totaled 1.22 trillion yen Tuesday, the highest since December 1989.
This also marked the fifth straight trading day worth more than 1 trillion yen.
Behind the robust trading was purchases of mainly high-tech, information and communications stocks by newly established investment trust funds as well as selling to cancel contracts by existing investment trust funds.
An official at Nomura Securities Co. (8604) said, "Now that the Federal Reserve's Open Market Committee is over, domestic and foreign institutional investors who remained on the sideline have begun to increase trading."
A manager at New Japan Securities Co. (8606) said, "Large capitalization stocks are being bought on expectations that newly established investment trust funds will include these stocks in their portfolios."
Softbank Corp. (9984), the stock with the largest trading value on Tuesday, saw its price rise in the morning, but later fell back to close lower. Sony Corp. (6758), the second-largest trading value stock, returned to the 30,000 yen level at the opening, but fell on profit taking. A senior official at Asahi Tokyo Investment Trust Management Co. said, "Market participants' sentiment is mixed when the Nikkei Stock Average approached 20,000 points."
Buying and selling by dealers for position squaring ahead of the calculation of the special quotations for settling positions on Nikkei-index options on Friday also boosted trading value. However, "Trading in connection with the special quotations is expected to be a small amount of net buying, and is unlikely to impact the market significantly," said an official at Yamatane Securities Co. (8610).
(The Nihon Keizai Shimbun Wednesday morning edition)
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Tuesday, February 8, 2000
VENTURE CAPITAL: Nonfinancial Firms Boost Investment In Start-Ups
TOKYO (Nikkei)--More and more nonfinancial companies are setting up venture capital funds. But while some funds, such as those started by Softbank Corp. (9984) and Hikari Tsushin Inc. (9435), are following the conventional path of seeking financial gain through public offerings, the main purpose of funds launched by nonfinancial companies is not always direct profit.
A venture capital fund set up by General Electric Co., for example, is used to help the company enter Japan's Internet market.
Personal computer makers use the funds to establish ties with start-ups that could become major customers. These days, partnerships with the right start-up companies often do more for a PC maker's market share than product performance and price, as some Net firms buy more PCs than large corporations.
IBM Japan Ltd. was one of the first PC makers in Japan to use venture capital as a way to secure customers. The company is hoping this strategy will help it break the stranglehold Nihon Sun Microsystems KK and Hewlett-Packard Japan Ltd. have on domestic Net start-ups.
Some other funds focus more on the R&D side of investment. One such fund, established by NEC Corp. (6701) and Sumitomo Bank (8318) in 1997, has limited its investment to U.S. start-ups. Following the success of the fund, the two companies set up a second one worth 100 million dollars in 1999.
Fujitsu Ltd. (6702) also has an investment fund, which specializes in Asian start-up firms.
(The Nihon Keizai Shimbun Tuesday morning edition)
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