| 07/2/2002 Wed 06:30 am Wed Dow and NASDAQ took more hits from Novellus System profit warning and further weakness in the telco sector. However, after the market close, Merck announced a $10 bln stock buyback plan, Amazon reported smaller losses. After trading hours, Amazon is up $1 and Merck is up $0.80. The weak sentiments in Wall street is clearly not going away during this reporting season but here sentiments is improving as witnessed by the 29 points rally which is lead by the property sector. The 10% cash downpayment for property buys is seen as a boost for demand as it means lower cash payout. City Dev, Capitaland and Allgreen may see more room on upside after today's opening breather. Food companies which are unrelated to the NASDAQ could also see some life this week. Mon: What should not be too surprising is another Dow decline but the magnitude of the fall of last Friday caught many analysts by surprise; we get to hear "further- weakness-on-Monday" calls. What could be a surprise may be a better than expected performance from the tech sector as the Dow's fall is company-related and not a reflection of the current status of the US economy. No doubt, a Dow at say 6000 would result in an lower consumer spending but it would be wrong to paint the tech sector with the same brush as the Dow component stocks. Most tech stocks here have reached valuations which could be considered attractive in 1999-2000 terms and when sentiments pick up, a swing back upwards would not be impossible. Today's focus is likely to be on NTI, which is an IT and software solutions provider. Coming at $0.20, this could could see some support at the early part of the session as issue size is small.. Wed: Dow ended lower after reacting strongly to a calming Greenspan's speech. The industrial production numbers affirms Greenspan's view of a recovery but the nagging fears of further 'disclosures' from blue chips weigh on the Dow. The slack in our heavy weight may not be over as there appears a lack of interest in them as market focus on small stocks with theme play such as Qian Hu and the three water treatment companies. The next IPOs are CMT and Futuristic. CMT is a large issue coming in at a price of 0.96. Upside seen limited as stags may be out in full force if there is a premium close to yield of 7% which caps price near 1.02. For Futuristic, issue size is small but fundamentals are unexciting as company is in the same biz as CityAxis which went below offer price last session. The other listed interior designer Nobel Design is languishing near 0.18. Previous commentaries |
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