QUANTUM Message Board - Msg: 2814574

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Technology Stocks : QUANTUM

QNTM 8.120

-5.4%

Dec 17 3:59 PM EST

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To: Rational who wrote (5650)	11/25/1997 12:52:00 PM
From: Dale J.	Read Replies (1) of 9124

Sankar: I agree with your observations in replies 5604 and 5650. Thanks for the insights. Japan's Nikkei dropped in the morning session, but showed stability in the afternoon session. I think Wall Street will eventually detach itself from the Nikkei index just as it did with Hong Kong's index. CNN and Reuters will eventually move on to other stories. Dale P.S. I culled some of the news. The Wall Street analysts are starting to echo your sentiments. [Yamaichi's failure] Analysts in Tokyo said Yamaichi's failure need not spark a systemic financial crisis -- unless lenders and investors decide to tar healthy institutions with the same brush. "The question is how much does Yamaichi own?" said Edward Yardeni, economist at Deutsche Morgan Grenfell. "Is the market concerned about it? Yes. Is it a significant concern? I doubt it," said Edward McKelvey, senior economist at Goldman Sachs. Yamaichi's "hidden" debt -- accrued through possibly illegal shifting of losses to protect favored customers' investments -- that proved to be the final nail in the coffin. Japan's Finance Minister Hiroshi Mitsuzuka hinted that it would not prop up ailing companies anymore. He said Monday it was necessary to promote restructuring in the financial sector, ensuring full disclosure and stronger supervision to maintain stability. [South Korea] South Korea's financial crisis has been caused by a string of corporate failures that have put enormous strain on the banking system. Foreign lenders have been refusing to roll over short-term loans amid growing concern about the creditworthiness of Korean companies and banks. More than two-thirds of the country's $110 billion external debt as of March was due in periods less than a year. [Hyundai(Maxtor) and Samsung] "Furthermore, turmoil in Korea's economy and financial markets could increase funding costs and reduce the financial flexibility of the companies," it said. "Because they are highly leveraged, rising domestic interest rates will also be a financial burden for these companies," the rating agency said. A downgrade in a company's debt rating can make it harder for the company to borrow because it increases the risk premium on the debt. Some analysts said the IMF loan won't be enough as a rush of short-term debts start to come due.

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