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

To: Crossy who wrote (3456)	8/29/2003 12:00:56 AM
From: Crossy	Read Replies (1) \| Respond to of 3902

re: 2551.J - www.marusanai.co.jp New alltime high today - 570 Yen quote.yahoo.co.jp Surprising strength going into September. Noteworthy that Marusanai is not only listed in Nagoya, they also end their fiscal (company) year towards the End of September ! Looking forward to reviewing the annual results. Company is an interesting case with regard to exchange rates.. They have 3 operations 1) Domestic Japan food & beverage processing, soy bases : Miso (Soup) - they are #3 - and soy beverages - where they are #2. This is unaffected by exchange rates. For Foreign investors of course the higher the Yen, the higher the return from this business 2) American Soy - Marusan is a JV partner, owning 33% (another stakeholder is Eden Foods, organic food producer originating in the US) - Here Eden had the money and Marusan provided production expertise, aseptic processing technology (state of the art). Now this operation is of course unaffected by exchange rate largely (minority shareholding sales are not consolidated, only earnings distributed to JV partners are recorded in Marusanai's income statement - this is nonetheless a sizeable contribution). The US operations' results per se are of course unaffected by the level of the Yen. However the plowed back profit to Japan are higher, if the yen decreases in value 3) American Soy exports a lot of soybeans to Japan. This operation is only natural and is of course a lot affected by exchange rates. The higher the Yen, the cheaper the purchase price Marusanai has to cough up - which should increase their spread/margin. Since trading revenues are usually far larger than plowed back profits, Marusan can be classified as a "net importer". It'S earnings level should increase (due to spread expansion) against an increasing home currency (Yen). rgrds CROSSY