Print

Mail

wiki links

Japanese shares may slip

Japanese stocks may drop as investors turn their attention to a domestic economy that some said may slump back into recession in coming months.

Shares got a boost earlier in the week on expectations that the US Federal Reserve's interest-rate cut would spur consumer demand there and help exporters such as Sony Corp and Kyocera Corp. Still, a strengthening yen and a sputtering economy at home may push stocks lower next week, some investors said.

"Japan's economic woes won't disappear simply because the Fed decides to cut rates," said Manabu Sakamoto, who helps manage US$1.3 billion in Asian equities at Prudential Asset Management Japan Inc. "It's difficult not to be pessimistic about stocks with the economy looking so flat."

Elsewhere in the region, Taiwan stocks may rise. China Motor Co (中華汽車) and other companies with businesses in China may extend gains after Chinese President Jiang Zemin said Beijing was committed to opening transport links with Taiwan and called for the resumption of talks to resolve a 53-year political dispute over control of the island.

Chinese companies trading in Hong Kong may advance on expectation that new rules opening China's yuan-denominated stock market won't be enough to attract foreign investors.

In Australia, Telstra Corp may decline. The nation's largest telephone company may tell shareholders at its annual meeting that competition in the nation's telecommunications market is increasing.

Japan's Nikkei 225 Stock Average added 0.1 percent to 8,690.77 in the week just ended, while the Topix index dropped 0.5 percent to 866.89. The Topix declined in five of the past six weeks.

Japan's third-quarter economic growth figures are due next Wednesday. Investors will also monitor US retail sales figures the following day, which may signal a tightening in consumer spending in Japan's biggest export market before the holiday shopping season.

NTT DoCoMo Inc, Mizuho Holdings Inc and other companies that do most of their business at home may decline.

Taiwan

Taiwan's China Motor, a venture partner in South East Motor Corp with China's Fujian Provincial Automobile, may benefit from better relations between Taiwan and China.

``China Motors may get a license to sell cars in China,'' said Yeh Chin-lin, who counts China Motor stock among the US$40.5 million she helps manage for Grand Cathay Securities Investment Trust Co. "They're in the process of applying."

China Motors climbed to its highest in almost four years on Friday. Yulon Motor Co (褕隆汽車), which also has a venture in China, jumped to its highest since Dec. 9, 1998.

Other Taiwan companies that do business in China, such as the nations's biggest tiremaker, Federal Corp, and Formosa Plastics Corp (台塑), the flagship of Taiwan's largest industrial group, may also gain.

Hong Kong

In Hong Kong, Chinese companies such as China Mobile (HK) Ltd and Huaneng Power International Inc may gain after Jiang said the country's economy may quadruple by 2020.

"I am bullish on China," said Norman Lowe, a fund manager at Mansion House Investment Services Ltd, which has about US$4 million under management and owns shares of China Mobile and Huaneng Power.

Investors will also monitor China Telecom Corp as the stock starts trading on Thursday. The unit of China's biggest fixed-line phone company this month sold HK$11.2 billion (US$1.4 billion) of shares, 60 percent less than initially planned.

Companies whose shares are traded in Hong Kong and on the mainland as Class A shares, such as China Petroleum & Chemical Corp and China Eastern Airlines Corp, may advance.

Overseas investors, until now allowed to invest only in Class B shares, will get access to the A-share market from Dec. 1. The B-share market is a 10th of the size of the A-share market.

The A shares of China Petroleum & Chemical, the nation's largest oil refiner also known as Sinopec, trade at 18 times 2001 earnings compared with 6.7 times for its stock traded in Hong Kong.

The A shares of China Eastern trade at 50 times earnings in Shanghai compared with 10 times in Hong Kong.

South Korea

South Korean chipmakers such as Samsung Electronics Co may fall on concern declining high-speed computer-memory chip prices suggest that computer makers have all the supplies they need to deal with orders for the end-of-year holiday period.

The price of the benchmark high-speed memory chip was unchanged after declining three days to US$8.70. The price climbed to its highest this year during the week, according to DramExchange.com, a Taiwan-based computer chip clearinghouse.

Korea Electric Power Corp may rise. The nation's largest electricity provider may report on Thursday that third-quarter profit rose from a year ago after a stronger currency helped reduce fuel import costs.
This story has been viewed 1377 times.