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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: Jack Lim who wrote (2386)	8/5/2000 6:39:40 PM
From: fut_trade	Respond to of 3902

The newly added companies represent less than 14% of the index and cover a wide diversity of industries. I doubt there would be that much of a difference. New Components of the NIKKEI 225... Company Name Code Industry Category Advantest 6857 Electric Machinery Casio Computer 6952 Electric Machinery Daiichi Pharmaceutical 4505 Pharmaceuticals Daiwa Bank 8319 Banks DDI 9433 Telecommunication East Japan Railway 9020 Railways & Buses Eisai 4523 Pharmaceuticals Fanuc 6954 Electric Machinery Fuji Heavy Industries 7270 Transport Equipment Industrial Bank of Japan 8302 Banks Ito-Yokado 8264 Retail Japan Tobacco 2914 Foods Jusco 8267 Retail Kao 4452 Chemicals Kyocera 6971 Electric Machinery Matsushita Communication Industrial 6781 Electric Machinery Matsushita Electric Works 6991 Electric Machinery Mitsubishi Motors 7211 Transport Equipment Mitsumi Electric 6767 Electric Machinery NTT DoCoMo 9437 Telecommunication Seven-Eleven Japan 8183 Retail Shiseido 4911 Chemicals Shizuoka Bank 8355 Banks Sumitomo Marine & Fire Insurance 8753 Insurance Sumitomo Trust & Banking 8403 Banks Taiyo Yuden 6976 Electric Machinery TDK 6762 Electric Machinery Terumo 4543 Precision Instruments Tokai Bank 8321 Banks Tokyo Electron 8035 Electric Machinery Yasuda Trust & Banking 8404 Banks

To: Jack Lim who wrote (2386)	8/6/2000 10:32:12 PM
From: Step1	Respond to of 3902

Jack thx for your message. I have unhooked somewhat from the nikkei now that i dont have a position anymore. My personal take on the rejigging of the nikkei a while back (and i have made a message on the clown thread already) is that the rejigging attempt was made to boost it. The official position of course is that new companies were added in order to better represent the economy in 2000. I would read between the lines of the official reason and say it was done to solely to manipulate its value as is frequently done in the SP. Problem is their timing was off by half a year at least. The companies they put in had already had their run up... So when the change happened it only benefited the brokers who got the gainful job of selling the outgoing components and buying the new ones, for a fee of course. As for the speculation that it might be 17000 if this had not happened, well i consider it just that, a speculation. Even if you look at the companies that were taken out and you figure thier present value and calculate the old Nikkei, it only gives you an estimate of what it could have been . nothing is static in the market, and HAD THEY BEEN in the index in the last 5 months, it is hard to tell how they would have moved. Presumably with less volatility, but the nikkei i think is fairly valued at the present second ( i mean second) and had the old components been in , a reasonable valuation would have been worked out for that version 1.0 of the nikkei. I am a bit long winded, but i find attempts by the press to explain that the nikkei should really be 17,000 now a bit of a mind stretch. Their goal was to boost it, they failed. THe nikkei is worth what it is worth. Going forward, i remain negative on the index, although the timing of further declines will depend on the US markets. All of this in MHO of course. Stephan PS i reread your message and also checked the Economist . I would be extremely wary of the J Reits... Hmmm, financial engineering? In the end, the hard facts just cannot be excaped and the Zombies will just have to be given a decent burial, lest they keep coming back to haunt us all. I have scores of white elephant projects that were dreamed pre-bubble days right around where i live, and a precious few have been allowed judgment day. Sogo is a step in the right direction. sg