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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (7683)	5/21/2001 8:44:17 AM
From: Challo Jeregy	Read Replies (1) \| Respond to of 52237

Donald - Taiwan rating lowered Monday May 21, 6:40 am Eastern Time Japan, Aussie Shares Shine on MSCI By Valerie Lee SINGAPORE (Reuters) - Asian share markets heaved a collective sigh of relief on Monday after the re-rating of critical Morgan Stanley Capital International share indices, although Taiwan fell on surprise over its new weightings. Markets in Japan and Australia were considerably cheered with the benchmark Nikkei average surging 2.5 percent while the S&P/ASX 200 index hit a record closing high of 3,435.3. Stocks in Australia had also gained from the sharp surge in gold which hit a 15-month high in Asian trade. Taiwan's benchmark TAIEX, meanwhile, ended down 2.99 percent at 4,958.61, its lowest close since January 3 as investors reacted to the cut in the MSCI rating of foreign investor access to the market. ``The market was very surprised to see the Taiwan weighting across the board slashed from 80 percent to 55 percent... I don't think the market had focused on the fact that Taiwan was not going to be one of the big beneficiaries,'' John Schofield, head of technical analysis at Prudential-Bache Securities told Reuters. The MSCI announced new constituents and inclusion factors on Saturday based on a free-float criteria for its influential global indices, a move that could influence funds totaling $3.5 trillion globally. The changes aim to make the indices more easily followed by fund managers, by calculating company weighting based on the number of shares not locked up by governments, families, management and other strategic shareholders. In foreign exchange markets, the dollar edged lower versus the yen after the reshuffle of global stocks was not as damaging on Japan as many had feared. The dollar was at 123.13 yen by 0935 GMT, against 123.48 yen in late New York. Spot gold prices had spiked to a 15-month high in early Asian trade, pushing through $298 an ounce before easing to the $287 level. Investors believe the U.S. interest rate cuts last week, nascent concern about inflation and tight gold forwards have aligned to turn negative sentiment into a positive outlook for gold. TOKYO EXHALES, NIKKEI UP Tokyo's Nikkei average surged 2.15 percent or 299.06 points to close at 14,176.83, as the smooth weekend reshuffling of the MSCI indices lured buyers to oversold shares and those with strong prospects, including KDDI ``It's as if a big weight has been lifted off the market's shoulders,'' said Masatoshi Sato, equities manager at Mizuho Investors Securities. ``Investors can now shift focus to earnings and Wall Street, and those factors will determine if this rally has legs or not,'' added Sato. KDDI Corp, Japan's number-two telecommunications carrier, jumped 8.67 percent to 589,000 yen. The MSCI change in methodology is expected to hurt companies whose stocks are largely held by the government, banks and group firms, such as former state monopoly Nippon Telegraph and Telephone Corp (NTT) and Toyota Motor Corp But market sources said the changes had largely been factored in. NTT and Toyota shares were marginally higher. TAIWAN RATTLED, AUSSIE SHARES BUOYANT Taiwan shares tumbled below an important support level, hurt by a sharp fall in the Taiwan dollar and a cut in its overall weighting. Taiwan's weighting in the MSCI Emerging markets index rose by 0.73 percent but its relative weighting on the MSCI Asia Pacific index (ex-Japan) is expected to fall from the current 13.4 percent to 11.7 percent, analysts said. Calvin Chiang, fund manager with Barits Securities Investment Trust's Niche Fund, said the market downtrend was well-established and chances were slim for any significant rebound in the short-term. Hong Kong's Hang Seng Index ended up 1.95 percent at 13,721.27, led by gains in property and banking stocks after better than expected property sales over the weekend. Property developer Cheung Kong Holdings and property-to-subway group MTR Corp added 0.54 percent to HK$93 and 0.36 percent to HK$14 following Saturday's announcement by MSCI that they will be included in its Hong Kong index. The index changes will come in two stages ending in May 2002. The Australian share market bagged another record closing high on the back of Australia's increased weighting in the MSCI share indices, a surge in gold stocks, and a firmer Australian dollar. ``Australia has done very well out of the changes,'' said Arthur Roumeliotis, divisional director for institutional sales at Macquarie Equities. ``Total funds inflow for Australia could be between US$5 and US$6 billion over the next 12 months, compared with Hong Kong, which could see a funds outflow of about US$7 to US$8 billion,'' said Roumeliotis. Gold stocks were among the top performers, with the gold index rallying 5.6 percent. biz.yahoo.com