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.

Technology Stocks : SAP A.G. -- Ignore unavailable to you. Want to Upgrade?

To: jon iliz who wrote (2857)	1/4/1999 12:59:00 PM
From: Mao II	Read Replies (1) \| Respond to of 3424

Jon & Thread: Anyone have info on the SAP "warning" mentioned below? Regards, M2 dailynews.yahoo.com Monday January 4 8:42 AM ET Funds Ponder Once-In-A-Millennium Investments By James Saft LONDON (Reuters) - Pre-millennial tension is set to be the investment issue of 1999, but many fund managers believe the new era will bring unusual opportunities as well as threats. So far most investors have focused on the computer bug which has the potential to bring corporations, banks and even large swaths of the global economy grinding to a halt. But the dawn of a new epoch will also bring with it interesting opportunities, some money managers said. ''There is one area of Year 2000 that people completely overlook and that is millennium advertising, media and leisure,'' said Tim Wilson, global strategist at Newton Fund Managers in London. ''Those areas will be very, very big.'' The hype surrounding the big day will prompt a huge rise in consumer spending and massive spending by those trying to capture that. ''Just try to book into a Walt Disney resort or a restaurant for next New Year and the prices will stagger you,'' Wilson said. Other managers are combing the markets for shares that could get a boost from the millennium bug itself. If not reprogrammed, the millennium bug will leave computer systems unable to recognize the date and unable to function. This means a premium for companies which provide computer support services, fund managers said. ''Clearly it is having an effect on information technology (IT) companies and they have done quite well,'' said Stuart Fowler, head of UK equities at asset managers Dresdner RCM in London. IT firm Cap Gemini has estimated that firms will spend some $858 billion in Europe and the United States on correcting the millennium bug, with about $500 billion already spent. Fowler gave short shrift to fears that millennium bug spending will make IT companies one-year wonders. ''The fact that companies are spending more on IT is not just euro, it is not just millennium, it is a recognition that this is how they get competitive advantage,'' he said. Industry estimates show millennium bug spending falling in 1999 from a peak in 1998 but overall IT spending rising, according to Alan Torry, head of U.S. equity investment at Societe Generale Asset Management in London. ''There is a strong argument that post-2000 people will move away from fixing problems to genuine productive investment that has been put off,'' he said. ''You could end up with a large number of areas where demand accelerates very rapidly, probably not in the first quarter of 2000 but by the second quarter.'' Firms which provide inventory control technology suffered in 1998 because companies did not want the headache of revamping those systems while going after the millennium bug, he said. ''There will come a time that companies like SAP AG (NYSE:SAP - news) will become very attractive,'' he said. SAP warned on December 31 that orders in some areas could be hurt in the short term as clients concentrate on dealing with the millennium bug. Banks, insurers and smaller companies could all be hurt by the bug, according to Bill O'Neill at HSBC Securities. Banks face the double risk of their own systems and the international payment system, he said in a recent report. Insurance companies could be subject to a surge in claims if it all goes wrong, while small firms may simply lack the financial muscle to mount an adequate millennium bug effort. Some firms invariably will fail to come to grips with the bug, but fund managers were not keen to bet on which ones. Wilson of Newton said fund managers can ask the right questions of companies, and even monitor how much they are spending on compliance, but would largely have to wait and see who gets it right. ''It is very difficult to value this but you could make a lot of money as an investor if you got it right,'' he said. --------------------------------------------------------------------------------