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To: pater tenebrarum who wrote (37223)	1/11/2000 8:55:00 PM
From: Don Green	Read Replies (1) \| Respond to of 99985

Yen-Carry Trades On Rise As Year Opens: Nomura Wednesday, January 12, 2000 TOKYO (Nikkei)--Yen-carry trades are accelerating once again after coming to a halt in December, the latest data compiled by Nomura Securities Co. (8604) suggests. Yen-carry trades -- in which hedge funds and other investors borrow yen to finance positions in higher yielding currencies -- swelled to 8 billion dollars in the first week of January, from zero in December, Nomura estimates. The surge in yen-carry trades stems in part from the recent rebound in the euro, which is pushing hedge funds to shift their borrowing to the yen. The yen-carry trades are also tied to the emerging market view that the yen will soften ahead of a meeting of Group of Seven central bank governors and finance ministers in Tokyo on Jan. 22, Nomura believes. Yen-carry trades tend to reinforce a weaker yen and a stronger dollar because the borrowed funds are typically put into dollar-denominated assets. The monthly balance of yen-carry trades ranged from several billion dollars to zero in the second half of 1999, off from a peak of 42 billion dollars in June 1998. (The Nikkei Financial Daily Wednesday edition)

To: pater tenebrarum who wrote (37223)	1/11/2000 9:35:00 PM
From: KM	Read Replies (2) \| Respond to of 99985

Here's a guy who's been hitting the glue bong lately <G>: Tuesday January 11, 9:01 pm Eastern Time INTERVIEW-"What bubble?" asks bullish BT Fund head By Jim Parker SYDNEY, Jan 12 (Reuters) - As the high-flying U.S. stock boom tests the nerves of global investment managers, Australia's biggest retail funds manager is keeping the faith. Chris Self, head of international equities for BT Funds Management, is a believer in the so-called new paradigm of strong growth and low inflation, underpinned by technological change. For that reason, he sees further growth in global equity markets this year, albeit at a more cautious pace than in 1999 as interest rate rises spark short-term corrections. ''We see the earnings of leading edge companies as intact, if anything accelerating,'' Self told Reuters Television in an interview. ''And we believe that structural inflation will remain under control. That means that while interest rates will go up marginally, it will not be a king hit to the market.'' BT, a unit of the U.S.-based Principal Financial Group, is Australia's largest manager of retail funds and third largest institutional funds manager, with A$39 billion under management. HIGHER RATES A STABILISING FORCE Self dismisses fears the U.S. Federal Reserve might have to hit the brakes hard this year, arguing that no more than 50 basis points of tightening is in the pipeline. While higher rates posed a short-term negative for shares, ultimately the resulting flatter yield curve would be a stabilising force. ''The equity market will take an initial 'flu-shot' reaction to higher rates,'' he said. ''But if you believe that initial flinch will stabilise the bond market, then the equity market ultimately should stabilise and resume a normal trend.'' Self also argues that interest rate bears are continuing to under-rate the disinflationary impact of the Internet revolution on logistics and supply chains. ''The growth rate of the new economy in the United States is significantly higher than anything that has been recently seen, while interest rates and inflation are structurally lower.'' WHAT BUBBLE? As to the hotly debated stratospheric valuations of technology and Internet-related shares, Self is non-plussed. ''A lot of people are cynical about the internet companies, but it is clear to us that the Internet is a revolution and it will change everything,'' he said. Self said BT was comfortable with the values of the core large-cap technology companies such as Cisco Systems (NasdaqNM:CSCO - news) and Microsoft (NasdaqNM:MSFT - news) given earnings growth of 30-40 percent. ''All the news flow we're getting from these companies is they are increasing, not decreasing, investment.'' Self said this week's mega-merger of America Online Inc (NYSE:AOL - news) and Time Warner Inc (NYSE:TWX - news) had vast implications for the Internet, technology and media sectors. ''The stakes have been upped. There is no room for passivity by any player now, be it Yahoo! (NasdaqNM:YHOO - news) or any of the big media companies.'' A GLOBAL STORY BT also sees continued growth in equity market returns in Europe, underpinned by a stronger economy, corporate restructuring and merger activity. ''Europe is going to be quite sexy and hot this year, with major deals in banking, telecoms and the like - although we won't see the sort of deals we've seen in the U.S.'' Japan would also benefit from the forces of corporate restructuring, emerging domestic demand and the new economy, while offering a safe haven from higher U.S. interest rates. ''Even if Japanese rates increase at the margin, that is more of a symptoM of the fact that the economy is strengthening.'' Elsewhere in the Asia, BT predicted growth based more on domestic consumption than on the export-led expansion which had pulled the region out of crisis in 1999. He cited the semi-conductor industry as one sector in Asia likely to show strong returns in 2000. The Australian market was a harder call, given the lack of quality U.S.-style tech stocks and uncertainty over the implications for domestic interest rates from the goods and services tax being introduced in July. Even so, Australian stocks were not expensive at current values. CHANGE TO DRIVE GROWTH Self said while interest rate fears warranted a cautious approach by investors in 2000, the big picture for global equities remained one of long term growth fuelled by technological innovation. Pressed for his hottest investment tip, Self said he couldn't go past the technology sector. "If you look at how the world has changed between 1980 and 2000 and then ask yourself: 'Is it going to change less or more in the next 20 years?' - I think the answer is more. "Then it becomes pretty clear about what you have to do and where you have to be invested. ''It's just a matter of making sure you don't get too worried about short-term issues.'' --------------------------------------------------------------------------------