[Memories of 2000] Get Rich Quick--In Asia
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Forget the Silicon Valley gold rush--the unheralded story of last year is the one that took place in Asia. Flush with new dot-com offerings, Asian equity markets exploded. From Tokyo to Singapore, markets performed as if they were on speed; Korea's Kosdaq, which is similar in composition to Nasdaq, more than quadrupled.
Individual issues did even better. Japan's Big Three Internet stocks rose at rates that made most U.S. Internet plays look like staid utilities: Yahoo Japan jumped 4,206%; Softbank (now Japan's fifth-biggest company) rose more than 1,250%; Hikari Tsushin, a mobile-phone and Internet investment firm, was up almost 2,900%. Shares in Pacific Century CyberWorks, an Internet investment firm, started in May by Richard Li, the son of multibillionaire Li Ka-shing, climbed some 120% in the last six trading days of 1999. At $24 billion, it's worth about as much as his father's 30-year-old company.
Overvalued? Maybe. But they are likely to be worth more with the billions that the West is pouring into Asian economies. Those who missed the U.S. boom can capitalize on this one in its infancy. The Internet still has a modest presence in Asia. But with phone rates falling fast and PC sales rising, the number of Asia's Internet users will probably triple in the next three years, to 135 million (see chart).
Not that Asia's Net boom will mirror the U.S.'s. With penetration rates in the rich countries of East Asia already at twice American levels, cell phones will play a bigger role in Asia. In Japan, cell-phone maker NTT DoCoMo's Internet-capable phones have two million users after about a year on the market. Broadband mobile services, offering superfast download speeds, will become available in Asia toward the end of 2000, as much as two years earlier than in America.
But the biggest difference in the Net boom comes from Asia's export-driven economy. Ordering, billing, and shipping can all be done more quickly, cheaply, and efficiently on the Net. With the world's manufacturers tending to use large numbers of suppliers throughout Asia, its economies--and stocks--will reap enormous benefits from these frictionless systems. In turn, the Internet will force Asian companies to reorganize themselves and behave in ways that raise their returns on equity. Don't expect this to escape the notice of many investors in 2000.
Copyright © 2000, Time Inc., all rights reserved.
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