Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsnow who wrote (11150)	5/3/1998 11:09:00 AM
From: Alex	Respond to of 116762

FUND VIEW-Asia fears market selldown as yen falls By Sarah Davison HONG KONG, May 3 (Reuters) - Asia is getting nervous again as a sliding yen threatens to trigger another bout of market turmoil. ''I am absolutely expecting another round (of selling) in Asia. I think you'd be mad not to,'' said Andrew Ballingal, strategist at Schroders Investment Management in Hong Kong. But the nature of the market declines -- which could approach 50 percent in U.S. dollar terms, according to some analysts -- would probably be different this time around. Rather than the pronounced volatility that rocked this region late last year, Asia now faces a period of ''death by 1,000 paper cuts,'' as one analyst put it -- or a series of more orderly declines as the yen weakens. Over the past few days, the yen has skidded past the 133 level against the U.S. dollar from 129. Last month, the yen fell to its lowest level in 69 months and further weakness is expected with some analysts forecasting the Japanese currency at between 160 and 200 within six months. ''If the yen goes to 160 or 180, forget it,'' said Peter Perkins, strategist at Daiwa Securities. ''At 160, you really write off Asia for a while. Even if you go to 140 it's going to be very, very difficult for Asia in the near term.'' Financial markets seem to be selling the yen on concern about the state of Japan's economy. Japanese attempts to stimulate domestic consumption appear to be failing, with a decline in household spending and new car sales at a 21-year low. However, some analysts, including influential U.S. economist Fred Bergsten, believe the recent $128 billion stimulus package should be enough to stem a sharp yen fall although the package's effects would take a while to filter through the economy. ING Barings also believes the package will turn out to be effective in sparking a recovery while Abhijit Chakraborrti at HSBC Securities, who correctly forecast the Hang Seng's end-1997 level, on Friday turned overweight on Hong Kong. But the general sentiment, both towards Japan and Asia, remains very bearish. Schroders' Ballingal is expecting a 40-percent slide in the Hang Seng to 6,000 while Eugene Chung, strategist at SBC Warburg Dillon Read, said another round of market instability ''was pretty much a universal assumption'' if the yen hit 160. ''But I think it very much depends on the nature of that decline, whether it's a sharp decline or whether it's a series of orderly declines,'' he said. London-based analysts said only a very sharp fall in the yen could precipitate a second wave of market volatility in Asia because much of the damage has already been factored in. ''You would have to see quite a major fall in the yen to get (Southeast Asian) markets and currencies to be really hit very hard,'' said fund manager Jane Pickard at AIB Govett in London. ''I don't think currencies would go back to the levels we saw in January. I think equity markets wouldn't fall all that much because we are already close to the bottom levels where we saw a lot of buying coming in.'' Few were prepared to speculate on the pace of the yen's decline, although many Asian analysts were expecting a fall to at least 140 with most bracing for 160/200 to the U.S. dollar. A weaker yen enhances Japan's export industries but destroys the capital base of its financial institutions, worsening an already critical economic outlook and leaving no room for support to Asia. Japan's 12-percent take of Asian exports is plunging, confirming a lack of support from Asia's anchor and the world's second largest economy. Asia's first quarter rally has left room for more selling on stock markets. SBC figures show a net inflow from international Asia ex-Japan funds of US$45 million this year to April 22, most of it from the United States. That compares with a net outflow of $2.04 billion in 1997 and a $1.5 billion net inflow in 1996. Forecasts of a decline of 50 percent in U.S. dollar terms would obliterate all the early-year gains made by investors gambling on an Asian bounce. ''Since the first of January the markets ran way ahead of themselves ... and now you're really starting to see people coming back to reality,'' said Leslie Richardson, managing director of Asia sales at SG Securities in New York. ''There is a combination of factors that would argue for keeping things bumping along the bottom for some time now... unless Japan can regroup its economy,'' she said.

To: goldsnow who wrote (11150)	5/3/1998 11:37:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 116762

Some smart people now are "cynical bulls". Their reasoning -- Clinton cannot survive a bear. Therefore there will he no bear as long as he is in office. Billy and his team are invincible. Despite hideous overvaluation the market will continue to surge for years to come. People who think like this have done very well in the market but will trap themselves in the end methinks. Gold provides the key to recognizing the end of the stock bull. If gold stays flat or declines when stocks correct as has happened many times to date -- best to buy the dip. But the day stocks get smashed while gold surges will be the day the grizzly begins.