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Technology Stocks : Deswell Industries (DSWL)
DSWL 3.390-0.3%Nov 7 9:30 AM EST
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To: jmt who wrote (852)7/30/1998 4:36:00 PM
From: Ron Bower  Read Replies (2) of 1418
 
jmt,

This is one area where I think the thread has had erroneous information. According to the Annual Report the primary currency is $HK. A devaluation of the Chinese yuan would lower their costs and devaluation of the $HK would effect cash assets.

As any devaluation of these currencies would prompt further devaluation of regional currencies, there is minimal chance that either will be devalued. Any benefit Deswell migh attain would be short lived. Both the PRC and HK are resolved that neither currency will change. It has been difficult for HK to hold the PEG wit hthe rising dollar, but it appears they have been and will be successful. While it might, repeat might, help exporters, it would not be good for the rest of the economy. As China's exports are only 20% of the total economy...

I think that the currency devaluation may have been a factor earlier, most of the market now feels it unlikely and I wouldn't think it would be much of a factor in the current price.

IR said "reduction in growth"?

FWIW,
Ron
BTW - From the light trading volume over the last couple of months, it appears to me that the Funds are holding. I consider this a positive. Then again, they aren't adding to their positions either.
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