Hi Sean,
<Are the loan instruments denominated in local currency or U.S.
dollars? If APM borrowed the amounts in dollars, then no matter
what the exchange rate, APMs' debt would not be affected.>
The way it reads; Malaysian bank loaning to Malaysian subsidiary, makes me think it was in local currency. Looking at a Malaysian currency chart it was almost a straight line all year at the time of the loan. I can't think of any reason why a Malaysian bank would buy US currency to make the loan. Also the $1.6 million in currency related income in Q4 suggests that to be the case. If they were just paying expenses on the Asian factories, I don't think it would show up as additional income. The easiest way to find out for sure would be to call investor relations. I don't think it would be secret information.
<Does this hypothesis make sense or am I missing something?>
I think that might be part of it. I also think there has been some pretty agressive short selling, some dumping by mutual funds, and a fair amount of panic selling. It's possible that some of the larger funds are dumping just enough shares when a stock is technically weak and starting to recover, to push it through support levels. Being somewhat distrustful of big money, I'm starting to think this last month has been one massive set up. If you follow the NASDAQ news, the whole Asian "crisis" has led up to today when all of a sudden US banks now have a controling interest in 60 different countries. A LOT of money has changed hands in the last month!!!!
I also tend to believe that it was US companies that over loaded the channel and they decided to use Asia as an excuse to clear it out. Do you think Asia had anything to do with Oracles earnings? I don't. That's almost as lame as any company that had a bad quarter in June blamming it on the UPS strike.
<If I'm correct, we should see at least a modest tech rally once tax
loss season winds down.>
I think by January all the big money will have gobbled up a ton of cheep stock and currency, some techs will be reporting positive surprises BECAUSE of Asia, and the bulls will be running full speed ahead. The Dow will be testing new highs by spring, interest rates will go up, and we'll get to start all over again. At least that's the way I'd do it if I had trillions of dollars and wanted to own the world.
Regards,
Don |
