Japanese Information Technology Shares May Gain in Coming Week
Badon, this should give us the power to stay over 100K.
Bloomberg News
Jan 28 2000 3:46AM ET
Tokyo, Jan. 28 (Bloomberg) -- Japanese information technology shares such as Softbank Corp. may rise in the coming week, as Nomura Asset Management Co. and other companies prepare to start new funds that may target these shares.
Banks, builders and other companies that depend on domestic sales may fall, leaving key indexes mixed, as institutional investors continue to sell off shares they've long held in each other to cement business ties.
``The fund coming next week will be bigger than we've seen in a while, and it will have a big impact,' said Takashi Otsubo, managing director at Fuji Investment Management Co.'s equity division, which handles 108 billion yen ($892 million) in securities. Otsubo expect the Nikkei to move in a range of 19,000 to 19,500. ``We'll see some up and down in builders and bank shares, yet I still see the long-term trend is down because of the weak earnings momentum.'
The Topix index of all stocks on the Tokyo Stock Exchange's first section gained 4.6 percent in the week just ended to 1702.61, closing above 1700 for the first time since Jan. 4. The Nikkei 225 stock index rose 2.9 percent to close at 19,434.78.
Softbank Corp. and other Japanese Internet-related shares may extend its gain. Softbank, one of the world's largest backers of Internet businesses, rose its daily limit of 5,000 yen, or 5.2 percent to 99,900 on Friday, gaining 17 percent in the past five consecutive days.
Among the new funds starting next week, the Nomura Asset Management Co.'s Big Project-N, which will start on Feb. 2, which may amass as much as 1 trillion yen initially. The fund is estimated to have collected about 700 billion yen so far, surpassing a 90.4 billion yen that Daiwa Asset Management Co.'s Daisuke fund collected initially last December. Big Project-N will likely buy large and medium-sized stocks.
Buying demand from mutual funds already boosted shares in the past week. Five of the funds started today amassed a total 90.2 billion yen during their sales period, including Nomura's ``growth' fund, which raised 62.4 billion yen to invest in telecommunications, computer stocks, healthcare and financial services.
``We're having lots of fun watching all the names that were so strong last year getting picked by the domestic funds that are hitting the market,' said Winston Barnes, senior manager at WestLB Securities Pacific Ltd.'s the Federal Reserve's policy- making Open Market Committee meeting on Feb. 1 and 2. The markets seemed to have already priced in a 25 basis-point rate increase -- to 5.75 percent -- in the federal funds rate.
Yet, concern the Fed may raise interest rates several times this year may send U.S. stocks down, limiting gains by Japanese information technology companies that have close business ties with U.S. counterparts.
Banks, Builders, Brokers
Banks and builders such as Sakura Bank Ltd., the nation's fifth biggest lender, and Taisei Corp., Japan's largest construction company, may fall as banks reduce their holdings of company shares -- prompting those companies in turn to sell off bank stocks. Lenders currently hold about 30 trillion yen in listed shares, or about 9 percent of their assets -- far above international standards.
On Tuesday, the Management and Coordination Agency releases the January jobs report after the Cabinet meeting. If the figure suggests Japan's labor market is still weak, it may prompt some investors to sell retailers and other companies whose earnings are affected by weak consumer sentiment.
Meanwhile, Japan's three largest brokerage companies such as Nomura Securities Co. may gain as they said their earnings for the nine months ended in December improved significantly, due to increased trading commissions and strong sales of mutual funds.
The year ``1999 will be the best year for brokerages in the last 10 years,' said Laurent Halmos, an analyst director at Credit Lyonnais International Asset Management (Japan) Ltd., which manages about $348 million in Japanese equities and holds stock in all the big brokerages. ``Everyone's having a good run.' |
