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Technology Stocks : Nokia (NOK)

NOK 6.080

+0.4%

Nov 26 3:59 PM EST

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To: BOGEY who wrote (454)	12/12/1997 10:07:00 AM
From: tero kuittinen	Read Replies (3) of 34857

The unraveling of the Asian ecnonomies really creeps me out. The whole sequence of events seems so unpredictable... and every time the experts declare that the worst might be over something new comes up. The car sales are down 25% in Japan and the consumer confidence all over Asia seems to be plummeting. I no longer buy the line about how telecom won't be affected by the negative consumer sentiment. It will. Nokia's market share in Japan was declining anyway, the new phone won't be out until February and this biggest mobile market in the world seems to be sliding into full-blown recession. I think the next two quarters will be bad indeed. The Korean situation defies belief. Won has now depreciated by 55% against dollar since January. It has dropped by further 10% every day this week. How on earth is Nokia going to price their new CDMA phones in the US market if the Korean companies launching phones next year will have a 70% devaluation advantage? You can bet your bottom dollar that Samsung & co. are now so desperate for dollars that they will attack the US market more ferociously than ever. This kind of devaluation has to have a knock-on effect on countries like Taiwan, Japan and eventually China. Together these countries represent a sizable portion of Nokia's infrastructure market. One has to believe that the spreading economic chaos has to have a sizable effect on the infrastructure spending in this region. Some people keep saying that telecom will be the last thing to face cuts. Maybe so. But if all spending will be cut that is scant consolation. There are these persistent rumours that Nokia has already seen an order slow-down. Nokia is a great buy at this price. But it seems to me that it will go sharply lower after the fourth quarter figures come out. Only question is whether the first quarter will dreadful enough to trigger another selling frenzy or whether the new 6000 line handset sales in USA and Europe will already start to make a real impact on earnings. Quite possibly the best time to buy could be either in January or April. Tero

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