Thread,
The folowing is an article from Bloomberg's about Japan's market tonite.
Note the reference to public fund activity. It was likely in the futures
market if the past is any indication. Not sure, though. Also note it
is comments in progress as the market is still open. I hope this is
of interest to a few anyway. A least a little bit of latitude as to
subject matter seems to exist. Thus, my posts. I doubt I will continue
in this vein but simply wanted to point out for informational purposes
the potential distortion caused by the public pension fund money.
Regards,
Tundra
Top News
Mon, 26 Oct 1998, 10:19pm EST
10/26 Japanese Stocks Fall for Third Day; Bank Shares
Slide as Automakers Gain
Japanese Stocks Fall; Banks Slide as Automakers Gain
Tokyo, Oct. 27 (Bloomberg) -- Japanese stocks slid for a
third day, as an influx of public pension fund money was unable
to override pessimism about Japan's economic woes. Lenders such
as Sakura Bank Ltd. paced the retreat.
The nation's September jobless rate was 4.3 percent,
matching August's record high, despite a loss of 700,000 jobs
because more discouraged job seekers gave up looking for work.
''The real economy around us is in such bad shape, no one's
going to touch the market until we see evidence of economic
recovery,'' said Akira Nakamura, a manager at Chuo Securities
Co.'s equity division.
The benchmark Nikkei 225 Stock Average fell 42.62 points, or
0.3 percent, to 13,800.84. The broader Topix index of all shares
on the first section of the Tokyo Stock Exchange shed 4.78
points, or 0.5 percent, to 1043.96.
The market was pushed up in early trading by what appeared
to be public funds buying futures contracts, traders said. Yet
with no reason to follow through, the market drifted lower by the
close of morning trading.
Nikkei 225 index futures for December delivery traded in
Osaka fell 30 points to 13,850; those traded in Singapore shed 55
to 13,840. In morning trading the contracts rose as high as
14,090.
An estimated 171 million shares traded in the morning
session, up from 167 million share the same time yesterday.
Losers outpaced gainers 714 to 358.
Banks
Banks, which surged 15 percent last week, slid as investors
bet that Japanese lenders, burdened with trillions of yen in non-
performing loans, won't rise that high again for a long time.
''Banks will play games with the accounting rules to appear
solvent but I'm afraid there's really nowhere for them to hide,''
said Robert Reiner, managing director at Bankers Trust in New
York and portfolio manager of the $1.4 billion BT International
Equity Fund.
Sakura Bank topped the most-actives list falling 15 yen to
271. Fuji Bank Ltd. shed 16 yen to 421. Bank of Tokyo-Mitsubishi
Ltd. was the biggest loser on the Topix, sliding 29 yen to 1,040.
Shinko Electric Industries Co. fell 9 percent, or 400 yen to
4,050, after the semiconductor equipment packaging maker cut its
group full-year net profit forecast 33 percent to 6.7 billion
yen.
''With the dismal domestic economy there are likely to be
very few positive earnings surprises and a staggering number of
negative,'' said Bankers Trust's Reiner. ''I expect the worst and
I don't think it's priced in at these levels for the Nikkei.''
Still, automakers climbed as investors bet these currency-
sensitive companies would benefit as the yen weakened against the
dollar. The dollar has risen against the yen for the past five
days, and recently bought 119.03, down from 119.45 in late New
York trading yesterday.
''The strong yen runs counter to Japan's economic
fundamentals,'' said Tsuyoshi Nomaguchi, strategist at Daiwa
Securities Co.'s investment advisory department. ''Everyone
thinks the yen will cheapen and so they're buying back their blue
chips.''
Honda, whose operating profit rises or falls by 6 billion
yen for every 1 yen move the dollar makes from 125, gained 90 yen
to 3,720. Toyota Motor Corp., whose operating profit rises or
falls 10 billion yen for each 1 yen move of the dollar climbed 25
yen to 2,835. |
