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 : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Fowler who wrote (46409)	3/19/1999 12:56:00 AM
From: H James Morris	Respond to of 164684

Mark, now you can see. Why I'm betting on it. >>Staff Reporter of THE WALL STREET JOURNAL Fund managers are starting to get bullish on Japan and more of the money of Asian funds is being put into the long-struggling Tokyo market. <Picture: Mutual Funds>For years, money managers have been skeptical that Japan would take the painful restructuring steps economists feel are necessary to help the world's second-largest economy right itself. But a combination of increased corporate restructuring, a lower yen and interest rates near zero has led some fund managers to change their minds. So far this year, the Nikkei 225 stock index has gained nearly 18%, one of the best showings for any stock market world-wide. "We have been cautious about Japan for some time ... but that's changing," says Peter Ip, executive director and head of Asian-asset allocation for CEF-TAL Investment Management Ltd. in Hong Kong. His firm is raising the share of its portfolio in Japanese stocks to the level that such stocks represent in widely watched market indexes, and may boost it even further. It's also shifting some money away from Japanese export-oriented stocks toward Japanese companies that depend more on the domestic economy, such as banks and finance companies. Mr. Ip points to signs in Japanese data of improvement in consumer spending and industrial production, helped by government spending. He is also encouraged that the Japanese government has "broken out of denial mode" about a recession. According to a recent survey, many fund managers appear to agree with Mr. Ip. The Merrill Lynch Gallup Survey of 29 institutions earlier this month found that 59% of Asian-Pacific fund managers expect an upturn in Japan's economy during the next year. The monthly survey also found U.S. fund managers were record sellers of continental-European stocks in favor of Asian and Japanese stocks, and buyers of Japanese stocks outpaced sellers by the highest margin since September. Survey sponsor Merrill Lynch is one of the bulls: It has raised the share of its portfolio in Japanese stocks beyond their representation in common international benchmarks. Japanese stocks represent just over 10% of some market indexes globally, while they currently represent 22.75% of stocks in the widely watched Morgan Stanley EAFE Index, which covers Europe, Australia and Asia. Some international-stock funds run by U.S. fund companies are also increasing their Japanese holdings. For instance, Putnam Global Growth Fund has increased its Japan exposure by a few percentage points since year end, to about 10% of fund assets. Robert Swift, lead manager of the Putnam fund, says he has recently purchased shares in pharmaceutical companies Takeda Chemical Industries Ltd. and Yamanouchi Pharmaceutical Co., consumer-loan firms Takefuji Corp. and Acom Co. Ltd., and semiconductor-equipment maker Tokyo Electron Ltd. "The Japanese may get their economy moving again, finally," says Mr. Swift. Indocam Asia Asset Management in Hong Kong is another bull. "We tend to think this is a long-term recovery. We think there is a real change this year in government attitudes," says Terence Khoo, an Indocam-fund manager and associate director of strategy. Indocam is now overweight on Japanese stocks, a position that has been built up over the past six months, Mr. Khoo says. He particularly likes banking and finance stocks; his shares in Sumitomo Bank and Bank of Tokyo Mitsubishi have risen 36% and 45% this year, respectively. He also likes telecommunications stocks such as NTT Data, which has risen 42% this year, and blue chips like Sony Corp. and Honda Motor Co., which are up 41% and 44% respectively. Some skeptics say it's too early to declare Japan has turned the corner on its problems. "We're not talking about recovery yet; we're saying people are realizing Japan's economy won't shrink like last year," says Christophe Aurand, a fund manager with Taiyo Gamma Asset Management Ltd. in Tokyo.<<