Japan may not see rally this month

Japanese stocks failed to deliver their traditional January rally last year. They may not have one this year either.

The Nikkei 225 Stock Average has lost 1.3 percent. Computer- related companies such as Fujitsu Ltd have dropped amid concern that profit reports from US rivals, including Intel Corp, will show that global spending is slumping. Intel, the world's largest chipmaker, is among US companies releasing results next week.

"Earnings results from major US technology companies aren't going to convince me to buy computer-related stocks," said Yasuo Kamaji, who helps manage Japanese yen 300 billion (US$2.5 billion) in Japanese equities at Sumitomo Mitsui Asset Management Co. "A solid recovery won't come for a couple of years."

Other Asian computer-related stocks, such as Taiwan Semiconductor Manufacturing Co (TSMC,　台灣積體電路公司) and Chartered Semiconductor Manufacturing Ltd (特許半導體) in Singapore, may also decline.

Even so, South Korea's Samsung Electronics Co. may gain.

Analysts expect the world's biggest maker of computer memory chips to report higher earnings on Jan. 16. While many rivals have posted losses, Samsung Electronics has increased market share and stayed profitable.

In Hong Kong, shares of mainland companies such as China Mobile (HK) Ltd may rise. China is likely to say on Wednesday that the economy grew 7.5 percent in the fourth quarter from a year earlier, according to an average estimate of analysts surveyed by Bloomberg News.

Since 1949, when the Tokyo Stock Exchange started, the Nikkei 225 has risen four out of five times during the first month of the year, according to Nomura Research Institute Ltd. The average dropped 5.2 percent last January.

The benchmark has fallen in January for two years running only once in the past 54 years. Those losses took place in 1991 and 1992.

For the week just ended, the Nikkei 225 and the broader Topix index had their fifth weekly loss in six weeks. The Nikkei fell 108.50, or 1.3 percent to 8,470.45. The TOPIX shed 5.59, or 0.7 percent, to 837.70. Japan's stock markets are closed on Jan. 13 for a public holiday.

Shares of Fujitsu, Japan's biggest maker of business computers, may revisit the 24-year lows reached during the past week. Toshiba Corp, Intel's biggest competitor in Japan, might drop as well.

Fujitsu has said it expects a net loss for the fiscal year because of higher reorganization costs and a slump in demand for telecommunications equipment.

It's among computer-related companies that account for 15 percent of the TOPIX.

Taiwan

TSMC, the world's biggest supplier of made-to-order chips, said December sales slipped 3 percent from a year earlier and fell 23 percent from November.

"Recovery of semiconductor-industry demand is still uncertain," said Simon Chao, who helps manage US$20 million in equities at President Investment Trust Corp. "People will be better off if they stay clear of those stocks until some concrete results are shown."

Chao doesn't plan to buy chipmakers' shares.

Chartered Semiconductor, one of Taiwan Semiconductor's largest competitors, may decline. ST Assembly Test Services Ltd, the world's fourth-largest chip tester, may also fall.

South korea

Samsung Electronics stands to benefit as chip prices rise.

The spot price of a benchmark chip, operating at a speed of 133MHz and having a capacity of 128Mb of memory, has gained almost 50 percent since November.