Sun, Aug 03, 2003 page10

• Toshiba's fall drags Nikkei down

  RECOVERY TRACK? Japan's Nikkei index has gained 26 percent over the previous three months, but many analysts say computer-makers have yet to see a recovery

  • BLOOMBERG
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  Japanese stock benchmarks dropped this week, led by Toshiba Corp's 12 percent plunge, after the nation's largest notebook computer maker said Wednesday that losses almost doubled on slumping prices.

  The Nikkei 225 Stock Average shed 0.4 percent to 9611.67 this week, while the Topix Index lost 0.3 percent. The Nikkei has gained 26 percent since falling to a 20-year low on April 28, while computer-related stocks as a group rallied 37 percent during the period.

  

  A Sharp employee in Tokyo displays a new facsimile machine, the so-called ''fappy,'' which has a detachable LCD display with a 310,000-pixel CCD camera which can be used to send color pictures via the Internet. The Japanese hi-tech firm kicked off sales yesterday of the ''fappy,'' the world's first picture-snapping fax machine, for sale nationwide for around ?58,000 (US$483).

  PHOTO: AFP

  "It's too early to say that computer-related companies are on a recovery track," Hiroaki Muto, who helps oversee US$60 billion in assets as a chief investment manager at Nissay Asset Management Corp in Tokyo, said Wednesday. "Many of the major electronic makers haven't improved their businesses to counter price competition and falling demand."

  Elsewhere in the region, South Korea's Kospi index rose 3.1 percent this week, led by exporters such as LG Electronics Inc.

  and Samsung Electronics Co, after US reports boosted optimism that the world's largest economy is improving. The US, South Korea's biggest export market, buys about a fifth of the country's total shipments.

  Australia's S&P/ASX 200 Index had its biggest weekly gain in more than two months, led by companies with businesses in the US, such as News Corp and BHP Billiton. Indexes in Taiwan and Singapore were little changed for the week.

  In the US yesterday, stocks dropped after the US Department of Labor said the economy lost 44,000 jobs last month, the sixth straight decline, and the unemployment rate fell to 6.2 percent from 6.4 percent in June. The market losses widened after the Institute for Supply Management's factory index rose less than expected.

  The Dow Jones Industrial Average dropped 79.83, or 0.9 percent, to 9153.97, yesterday and lost 1.4 percent this week in its first weekly decline since June. Financial shares such as JP Morgan Chase & Co weighed on the Dow and the Standard & Poor's 500 index, which fell 10.16, or 1 percent, to 980.15 yesterday.

  The NASDAQ Composite Index fell 19.40, or 1.1 percent, to 1715.62.

  Japan

  Toshiba this week had its biggest two-day drop since October 1987, tumbling a total of 16 percent on Wednesday and Thursday.

  The stock added 1.2 percent to ?27 Friday.

  The company's group loss of ?6.8 billion (US$307 million) for the fiscal first-quarter was nine times larger than analysts surveyed by Bloomberg News had expected.

  "The figures themselves were a surprise to the market," Yoichi Kuwata, who helps manage the equivalent of US$1 billion in Japanese equities at Nikko Global Asset Management Ltd in New York, said July 31.

  Fujitsu Ltd, Japan's largest maker of business computers, slid 9.1 percent to ?01 this week after widening its loss forecast. Chief financial officer Masamichi Ogura said it isn't clear whether technology spending has recovered.

  Not all earnings reports were negative. Canon Inc, the world's No. 3 maker of digital cameras, added 3.6 percent to ?,780 this week. The company on Wednesday raised its full-year profit forecast, citing demand for sales of cameras and high-speed laser printers.

  "Companies with strong management and strong products continue to deliver," said Marc Desmidt, who helps manage the equivalent of US$8.5 billion as a managing director and head of investment at Merrill Lynch Investment Managers Co in Tokyo.

  South Korea

  The Kospi closed at 727.26, its second weekly rise and its highest since Dec. 3. Samsung Electronics, which generates about a fifth of its sales in the US, rallied 4.4 percent this week to 426,000 won. LG Electronics Inc, South Korea's second-largest electronics maker, added 4.8 percent to 52,000 won.

  A US Labor Department report said initial jobless claims were 388,000 last week, less than expected by economists polled by Bloomberg. An index of Chicago-area manufacturing rose to 55.9 in July from 52.5 in June, beating some economists expectations. A reading of more than 50 suggests expansion.

  "The positive reports boosted optimism" in the stock markets, said Park Jae Hwan, who helps manage the equivalent of $678 million at KB Investment Trust Management Co in Seoul.

  "Economic growth has risen to a safer level," Park said.

  Australia, India

  Australia's S&P/ASX 200 rose 1.4 percent this week to 3140.30, its highest since September.

  News Corp, which makes three-quarters of its sales in the US, added 1.7 percent to A$11.80 this week. The world's fifth-largest media company owns the Fox television network and the New York Post newspaper.

  BHP Billiton, the world's largest miner by sales, climbed 2.3 percent this week to A$10.08, its highest since Jan. 3. It makes more than a 10th of its sales in North America.

  "There's sufficient economic stimulus to generate solid economic growth in the second half," said Hans Kunnen, who helps manage the equivalent of US$52 billion of stocks and bonds at Colonial First State Investments, the largest fund manager in Australia.
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