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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Joseph J. Clark who wrote (9746)	10/27/1997 5:04:00 PM
From: David Aegis	Read Replies (1) \| Respond to of 70976

>>CNBC amalyst stated that AMAT has 45% of its sales is in the Asian markets. Said he would not own AMAT here or any other US "exporter".<< AMAT's Far East sales are primarily to Taiwan, S. Korea and Japan. According to a recent article posted on this thread, AMAT's orders from Japan are solid. I will add that although South Korea is suffering an economic slowdown created by rigid labor markets, it has not been hit with an attack on its currency. Also, no currency attack has been made on Taiwan, and Taiwan has posted solid economic growth (real industrial production growth +4.4% y-o-y August). To understand the pressure on the Hong Kong, Thai, Phillipine and Indonesian currencies, we should look to Japan. Japan's "weak Yen" strategy has caused the value of the U.S. dollar to swell. Japanese banks are borrowing locally and investing in U.S. Treasuries, hoping to use the yield spread to replenish their weakened balance sheets. The demand for U.S. dollars to fund the Treasury purchased has driven up the U.S. dollar relative to the Yen. Lack of similar demand for Asian and Latin American currencies "pegged" to the U.S. dollar made those currency vulnerable to attack. I do not think either the S. Korean or Taiwanese currencies are pegged to the U.S. dollar, so I do not think they are on the attack list (look out Argentina and Brazil, however). I am accumulating central bank data on the current account, capital account and foreign currency reserves of Korea and Taiwan. I cannot find a source for the capital account (investment inflows or outflows), much less a breakdown of the flows (direct investment--fairly stable money or capital market investment and short term debt--hot money). Help on this would be appreciated. --David