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Technology Stocks : Creative Labs (CREAF)

CREAF 0.448

0.0%

Dec 18 4:00 PM EST

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To: HEXonX who wrote (6705)	12/7/1997 7:57:00 PM
From: Alan Chan	Read Replies (1) of 13925

<Singapore has to upscale the wages since they have a very low unemployment rating, the wages over there are very poor> On the contrary, Singapore wage costs are very high (it is one of the 5 most expensive cities to work in). Fortunately, most of the manufacturing is done in the neighbouring countries, predominantly Malaysia (whose currency has fallen 23% against the S$ and 40% against the US$). Singapore is where some of the final product is assembled and it is also the trans-shipment centre. Some of the components come from Japan (the yen has dropped 20% against the US$ in recent months). CREAF has a contract with Samsung (Korea) to supply its CD-ROMs and I presume that is the same for the PC-DVDs. (The Korean won has dropped between 30-35% against the US$). What is interesting is the fact (unexpectedly) that sales in Europe have been rising strongly. Finally, the once lethargic continent is beginning to throw away its 'euro-centric' prejudices. The drop in Asian revenues would be more than off-set by growth in the US and Europe, and this not having taken into account the exchange rate gains (i.e. lower cost). CREAF can afford to sell their products (conservatively) at a 15-20% discount and yet maintain the same margins. The 'analyst' (?) with the European bank who recommended a sell for CREAF is pretty smart to 'declined to be named' (Dow Jones Dec 4). You'll realised that Patrick, the 'analyst' from Vicker Ballas (Singapore), who had consistently recommended a sell for CREAF on 2 separate occasions (when it was ~S$13 and ~S$25) has been very quiet these days. There are still more 'buy' recommendations that 'sell'. I believe that the current price is a good entry point. CREAF has never fail to disappoint. Somehow or rather, it creates opportunities for those who had missed out to jump in (courtesy of the Nasdag MMs???). It might trade lower for a day or two before marching up. I'll always stick to 'leave the bottom and top 10% to those who love to live on the edge.. just stick to the 80% in between'. One thing though... The Japanese holds more than US$300b in US treasury bills/bonds. If they decide to pull out, then the Dow will tank and fundamentals don't count anymore!!! Then I'll just go and plow my land ; )

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