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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Luc Glinas who wrote (3857)	3/22/1998 4:45:00 PM
From: pat mudge	Respond to of 18016

What is your predictions for NN, are the stock will move with the Dow?? I'm the wrong one to ask about stock movements. From what I've seen of the DOW versus Nasdaq recently is that whatever happens one day will be reversed the next. Which means it's Nasdaq's turn to go north this week. Now, that's about as unscientific as you can get. I did read a fairly intelligent analysis of the situation in Japan in today's LATimes by James Flanigan that says Japan will be announcing its financial reforms in April and that their woes may lead to some influx of money into US markets but that long-term the end of their woes is to everyone's benefit. latimes.com; <<<. . .Policies will change in April when the government releases a supplemental budget containing roughly $76 billion in public-works spending and $15 billion in tax cuts, estimates economist Kazuhide Uekusa of Nomura--who nonetheless doubts that will turn the economy around. In April, Japan's insurance companies will have to take big losses writing down real estate and other assets on their books to present values. And Japanese pension funds will have to report that they have earned only a little more than 1.5% a year over time because they invested solely in Japanese government bonds. Such returns are inadequate to meet their eventual obligations to retirees in Japan's aging population. By contrast, U.S. pension funds, even before this bull market, typically earned 8% to 10% a year. They did so by investing partly in venture capital and emerging companies, blending high-risk rewards with more stable returns from blue-chip stocks and bonds. Thus U.S. pension funds have created new industries and been a strength of the economy, whereas in Japan inadequate pension returns pose a problem. So how can Japan recover? Its salvation will be the savings that Japanese families have socked away in the guaranteed postal savings accounts. They amount to an astounding $9.2 trillion at present, an average $76,000 in savings per person. That's the second-largest pool of capital on the planet, after the U.S. pension funds. Now aware of their retirement savings plight, the Japanese people will soon seek higher returns than the 0.5% the postal savings accounts pay. "Inevitably, they will funnel some of their money to U.S. markets," predicts Harald Malmgren, a Washington-based advisor to Japan's pension funds on how they might reform. So the outlook is that Japanese funds will buoy U.S. markets and perhaps investment markets elsewhere even as Japan's economy, now shrinking after 23 straight years of expansion, continues to struggle. Longer term, however, the potential for Japan's household savings is that they could form the basis for an equity market to finance emerging companies and foster the kind of new business climate that has proved so fruitful for the United States. But that won't be done in 1998. Creating vibrant stock markets in Japan will take time, Malmgren explains, because the country today lacks the infrastructure of venture capital, equity financing for small companies and even people trained in investing. In short, Japan has capital but lacks capital structure. How long will it take to build such a structure? About three years. Japanese officials have said for years that economic reforms would be completed around 2001. And now they might actually meet that schedule, awakened by the Asia crisis' shock to Japan's system. Meanwhile, dormant markets in Asia are cutting U.S. exports while sending in imports that displace U.S. products and slow U.S. job growth. Economists James Doti and Esmail Adibi at Chapman University in Orange estimate that San Jose, Los Angeles, Seattle and Portland, Ore., will suffer 20% cuts in job growth this year because of the Asia crisis. Orange County job growth will be reduced by 16%. And economies from New York to Minneapolis and Houston to Phoenix will be slowed also. Which prompts a final reflection: Many have long seen the Japanese economy as a competitive threat because of its strength. In fact, the real threat has come from its weakness. Just as we don't gain from others' troubles, recovery and prosperity in Japan would benefit us all. >>>