Has this been posted ? smh.com.au
US InterNet stocks at $4.1 trillion in Market Value
smh.com.au
Saturday, April 10, 1999 By STEPHEN DABKOWSKI in Melbourne
US broking giant Morgan Stanley has suggested that as of this week, the combined market capitalisation of US Internet-related stocks is $US2.6 trillion ($4.1 trillion) - about equal to the value of the Japanese sharemarket - underscoring the speculative bubble now emerging.
Mr Stephen Roach, Morgan Stanley's chief analyst, came up with the estimate by combining the values of the 50 companies traded on the American Exchange Internet Index and adding that to the biggest Internet-related companies, such as Microsoft, Intel and IBM, as well as the value of telecom and cable TV companies boosted by the Internet frenzy, such as AT&T, MCI WorldCom and Time Warner.
"It turns out that our $US2.6 trillion estimate of the market capitalisation of the Internet play amounts to about 20 per cent of the roughly $US13 trillion value of the entire US stock market," he said.
"I seem to remember the stories of last Christmas ... maintaining that e-commerce accounted for less than 1 per cent of total retail sales in the US. That $US2.6 trillion figure is looking bigger all the time."
Morgan Stanley is not the only US broking house feeling queasy about the Dow's exceeding 10,000 points on the back of an Internet boom.
Merrill Lynch's chief market analyst, Mr Richard McCabe, says a "spring correction is at hand. We think that such a correction could have the scope of 15 to 20 per cent. It will take some time for momentum indicators to become fully oversold and for sentiment measures to reverse their recent complacency about downside risk," he said.
"In our view, it would probably be followed by a broad-based and consistent bull-market cycle ... that could carry into the 2000-01 period." |
