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Technology Stocks : Softbank Group Corp -- Ignore unavailable to you. Want to Upgrade?

To: Hans U. Tschanz who wrote (4060)	2/23/2000 2:34:00 AM
From: Edwin S. Fujinaka	Read Replies (1) \| Respond to of 6018

More general stuff on how the rise of holding companies in Japan may continue to boost softbank and a handful of other high tech companies: Tuesday, February 22, 2000 ANALYSIS: Rapid Growth Of Stock Fund Market Creates Risks TOKYO (Nikkei)--Money from individuals is fueling the rapid growth of stock investment trusts in Japan. Up until last Friday, as many as nine funds had more than 200 billion yen each in outstanding net asset value. Investment trusts are similar to mutual funds in the U.S. Typical of their sudden rise in Japan is the new fund managed by Nomura Asset Management Co. which has close to 1 trillion yen invested. But the boom in these trusts is accompanied by risks, especially when viewed against the U.S. market, which contains a far greater volume of funds. Japanese-style mutual funds have expanded through flashy advertising, with boasts like, "a yield of 180% since establishment." The powerful marketing might of securities houses has also been unleashed to aggressively sway individuals. In fact, investment trusts are ideal for medium-to-long-term investments and their average yields are, in reality, not so high. For example, Fidelity Investments' Magellan Fund, a leading U.S. mutual fund, was established in 1963 and has slowly but consistently grown to now have 100 billion dollars under management. Japanese investors may not be aware of the true nature of equity investment trusts. Also, while U.S. rating agencies wait three years after establishment before assessing funds, Japanese agencies issue ratings after one year. For this reason, Japanese funds tend to chase quick profits and focus on stocks likely to rise sharply. Another concern is that most Japanese funds invest in similar stocks, notably NTT Mobile Communications Network Inc. (9437), Softbank Corp. (9984) and Sony Corp. (6758), because managers fear a unique strategy may unnerve investors and send them running to competitors. Popular stocks also attract pension funds and other big investors, creating a cycle in which demand pushes up share prices, which adds to demand. Conversely, the practice of fund managers copying each other may lead to a major sell-off, should the market head downward. The healthy growth of the stock investment trust market could well be jeopardized, if the practice of luring investors with excessive hopes of instant and lucrative returns continues. (The Nihon Keizai Shimbun Tuesday morning edition) -------------------------------------------------------------------------------- Corporate Profiles: NTT MOBILE COMMUNICATIONS(9437) SOFTBANK(9984) SONY(6758) Copyright 2000 Nihon Keizai Shimbun, Inc., all rights reserved.