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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Pierre-X who wrote (4564)	9/29/1998 1:19:00 AM
From: Frodo Baxter	Read Replies (1) \| Respond to of 9256

This is vevvy vevvy interesting... Is TDK's profitability from efficient scale in producing MR heads or is it from aggressive yen carry trades? TDK to Set Aside $59 Million to Cover Losses from Russian Bond Exposure Tokyo, Sept. 29 (Bloomberg) -- TDK Corp., a Japanese maker of magnetic heads used in computers' hard disk drives, said it's setting aside 8 billion yen ($59 million) to cover first-half losses from Russia's default on TDK's 16.3 billion yen investment in Euroyen Russian credit-linked bonds. Tokyo-based TDK, whose magneto-resistive heads are used to read and write information onto computers' hard disk drives, is already selling some of its stock holdings to make sure earnings are unaffected by losses on the Russian bonds, said TDK spokesman Takashi Tsuji. The combination of Russia's default on the bond payments and the recent decline in the ruble means that total losses on TDK's bond holdings could be more than 10 billion yen, Tsuji said. TDK bought the Euroyen Russian credit-linked bonds, which were issued by Luxembourg-based Credit Agricole Indosuez and matured yesterday, in May and June, hoping to make a short-term profit to boost first-half earnings. TDK is one of a number of companies including Aoyama Trading Co., Nomura Securities Co. and Daiwa Securities Co. that stand to lose millions of dollars in investments in Russian financial markets, and losses announced so far may be only the tip of an iceberg as companies assess the extent of the damages, analysts said. For the year through March 1999, TDK forecasts net income will rise 2.8 percent to 60 billion yen. That's just below the record 60.299 billion yen it posted for the year ended March 1997. The company projects full-year sales of 720 billion yen, up 3.3 percent from the year just ended. TDK, founded in 1935, also makes floppy discs, computer modems, recordable compact discs and minidiscs, soundproof chambers and parts for mobile phones. TDK shares were down to 9,280.