Index
Market in General
Stocks
Currencies
Last Week's Views
| Investment Views (August
31st 1998) |
Instead of writing my clients
individually I thought I might as well
do a weekly summary of my views
on the markets, the currencies,
the economy, the world, and
life in general.
Markets in General
It seems that all we can say nowadays is "what a week!". The
Russian banking system and currency
collapsed. Although Russian trade constituted maybe 11/2% of
the European exports (much less than
Asia, for example) the European markets dived and by Wednesday there
is a feeling of panic. After
last week's 6% drop, the Dax gained about 4% on Monday and Tuesday,
only to see
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Stocks
Our favorite stocks remains SAP, Nokia, Raisio
Group, Ericcson, Cable and Wireless, Orange
Stratec and Bachem.
| High of the Year |
Low of the Year |
Stock |
Last Week's
Close |
Daily high |
Daily low |
This Week's Close |
| HFl. 108.70 |
62.60 |
Baan |
72.7 |
70.90 |
68.10 |
68.60 |
| SFr. 1495 |
1351 |
Bachem |
1830 |
1845 |
1815 |
1820 |
| Gbp 8.13 |
4.67 |
C&W |
7.35 |
7.72 |
7.31 |
7.67 |
| SFr. 51 |
25 |
Ericsson |
37.85 |
37.50 |
36.30 |
36.30 |
| FIM 509 |
182 |
Nokia |
424.50 |
444 |
417 |
417.50 |
| Gbp 8 |
2.40 |
Orange |
7.20 |
7.88 |
7.65 |
7.78 |
| FIM 1080 |
640 |
Raisio Group |
84 |
83.50 |
81.50 |
82.60 |
| SFr. 1029 |
419 |
SAP |
885 |
923 |
850 |
850 |
| SFr. 440 |
385 |
Straumann |
344 |
356 |
335 |
340 |
|
In this extremely volatile market, C&W, Orange, and SAP are behaving
extremely well. From the action of these
shares we have the feeling that the market sentiment is still not extremely
bearish. People are still buying selectively.
Why not? After all Money in a savings account will only earn
about 11/2% interest in Switzerland. Therefore
the small investors are still willing to buy, while the professionals
panicked on Friday.
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Currencies
The turmoil on the world currency markets is spreading. It seems
that in no time the Latin American economies will
also get hit. Still the G7 is doing nothing at the urging of
the US. Well, when the Latin American currencies
and economies collapsed, we might just see an attack either on the
US dollar or the European currencies. Of course
the US is the only country that can whether an attack by the currency
speculators, since it is the only country without
foreign currencies debts. It would therefore more logical for
the currency speculators to attack the individual
European currencies. We would therefore urge investors to be
cautious in the European equity and bond markets.
The Hong Kong government had intervened massively in the currency, and
stock markets. We believe that is
the only way to go. As we have state a while ago in this newletter,
up until now the markets are skewed in
favor of the speculators, because they can short different markets
at the same time on margin. The strategies
of the central banks and IMF only played into the speculators' hands.
Raising interest rates will only increase
the profits of the hedge funds that also shorted the stock index futures
and bond futures, even if the currency
remains stable as a result. The economy of the defending country
is weaked by these measures.
The Swiss Francs remain strong. Dollar, GBP and the Swiss Francs
seem to be the only save haven
currencies left. The Swiss economy is recovering nicely.
We do not see a weak Franc in the near
term.
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| *The stock prices are provided
for informational puruposes only and not intended for trading
purposes. The opinions expressed in these pages are what they are:
opinions! |
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