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To: Lizzie Tudor who wrote (73937)	8/15/1999 10:27:00 PM
From: Curly Q	Read Replies (1) \| Respond to of 164684

A continuation of what started on Friday in the U.S. don't you think? The Dragon Fund was the only Merrill Lynch fund whose net asset value declined on Friday, since that activity had occurred before the rally. 2% though...thats a pretty strong move!

To: Lizzie Tudor who wrote (73937)	8/15/1999 10:29:00 PM
From: GST	Respond to of 164684

Michelle -- Hong Kong up as well -- Hong Kong follows interest rates and politics -- so a bullish HK market signals interest rate optimism. Japan revolves more around tech -- brother to the Naz. Both good signs - although the yen is rising which indicates more money flowing out of the US market. If there is inflation in the US money will flow out. If growth slows in the US, money will flow out. If there is both inflation and slow growth, triggered by a falling dollar and higher rates, then money will really pour out of the US market. It is hard to imagine a scenario where money would come into the US at this point -- at least not enough to neutralize our $300 billion trade deficit (we need to gain at least $300B in investment to cancel out the drain of $300 that we lose from the trade deficit). The best we can hope for is a pause in the outflow -- maybe we have that now for a few days.

To: Lizzie Tudor who wrote (73937)	8/16/1999 6:56:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Investment in U.S. start-up companies surging By Andrea Orr PALO ALTO, Calif., Aug 16 (Reuters) - It is no longer accurate to say dollars are flowing into new high-tech ventures. The money is now gushing in. A new survey shows venture capital investments in young U.S. companies reached $7.67 billion in the second quarter of 1999, beating the old record by 78 percent, and more than doubling the $3.77 billion invested in the second quarter of 1998. Put another way, it means that 10 new companies received an average of $7 million in funding every single day of the last quarter, including weekends. The Money Tree survey by PriceWaterhouseCoopers shows that most of the new venture capital went into technology investments, including environmental technologies and biotechnology, but predominantly to businesses related to the Internet. "Investments have been getting bigger every quarter for the last couple of years. But we are astounded by the magnitude of the increase this quarter," said Kirk Walden, National Director of Venture Capital Research at PriceWaterhouse Coopers. In addition, he notes that the survey does not capture all the money that is being put into new companies since it tracks only investments by venture capital firms, and not those made by corporations, or by individual "angel" investors. A multitude of large corporations from Intel Corp. <INTC.O> to the European consumer products company LVMH Moet Hennessy Louis Vuitton <LVMH.PA> have aggressively built up their own venture funds for investment purposes or to enhance their own technology operations. Walden said the PriceWaterhouse survey did not include such investments, unless they were made in conjunction with a venture capital firm. And, on the other end of the spectrum are more and more individual investors opting to put their money into a high-tech start-up rather than the stock market. Don Bell, for example, an oil industry entrepreneur from New Mexico who relocated to San Francisco three weeks ago to explore Internet investment opportunities, said he is being bombarded by other oil executives with money to invest. "I won't say they're throwing money at me, but they are saying, 'Won't you please find something for me to invest in'," said Bell. While the total number of companies receiving venture capital funds rose to 992 in the second quarter from 763 the year before, the survey also shows large increases in the size of individual financing packages. It said the average start-up received $7.4 million in funding, up from $4.9 million a year ago. The record this quarter was set by Via Networks, a Reston, Virginia-based Internet service provider that is expanding into Europe. Via was funded to the tune of $128 million during the quarter. PriceWaterhouse says the surge in investments reflects not just the proliferation of new businesses, but the increasingly fierce competition, which requires start-up companies to get more money earlier on so they can get up and running before their rivals do. This focus by venture capital firms on high-stakes projects sometimes means that true start-ups fall beneath their radar screens and have to rely on individual investors to get $1 million or so in "seed capital" to flesh out an idea. Although it may seem like a virtual windfall for entrepreneurs, such large investments will not necessarily benefit venture capitalists themselves, who are finding that the cost of a small stake in a company is higher and higher. "We don't believe that it is sustainable, or that it is healthy," Walden said. "It can overheat valuations and depress the venture capitalists' long-term returns." Not all technology industries are benefiting either. Biotechnology investment, for instance, has been virtually flat for the past three years. In terms of geographic region, however, entrepreneurs all over the country seem to be flush. While Silicon Valley companies received the...