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    Investment Views  (July 6th 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 

    The Tankan report on Sunday indicated that the Japanese economy is not as bad as
    the markets expected.  The Nikkei rallied on Monday in relief.  Hong Kong followed
    suit.  The European markets started to rally to new highs.  When the Japanese Prime
    Minister promised  a sizable income tax-cuts on Wednesday, the world's markets finally
    started to rise with conviction: the volume,  breath and other technical indicators
    improved substantially.  So we can finally go on vacation with the feeling that the
    summer rally still has some time to run.
    Go to Index
     

    Stocks 

    Our favorite stocks remains SAP, Nokia, Raisio Group, Ericcson, Cable and Wireless
    Baan and Bachem.*   Raisio Group's stocks spit 1:10.  Baan is still having problems.
     
     
    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 79 79.40 75.70 77.80
    SFr. 1495 1351 Bachem 2070 2240 1930 2000
    Gbp  8.13 4.67 C&W 7.16 8 7.52 7.90
    SFr.  44 25 Ericsson 43.20 45.75 44.50 45.30
    FIM  378 182 Nokia 379 421 410 421
    FIM  1080 640 Raisio Group 99 100 96.70 97.50
    SFr.  785 419 SAP 915 920 880 890
    SFr.  440 385 Straumann 390 410 398 407
     
    +This Thursday's closing prices

    The second quarter results will be in soon.  We'll have to wait and see.

    Go to Index
     


     Currencies 

    The markets were too pessimistic about Japan.  How can a country that has
    one of the world's largest trade surplus and one of the world's largest savings
    pool go bust?  Admittedly the Japanese had been slow to put their banking
    problems behind them.  But the world's prescription of opening their
    financial markets has actually helped to exacerbate the problem.  Nowadays the
    Japanese savers are persuaded by the likes of Merrill Lynch and Goldman
    Sachs to put their money abroad and thereby driving the yen down.  But
    the foreign banks forget to tell these investors that they risk loosing at least
    30% of their holding, if the yen returns to its "correct" exchange rate which
    some analysts put at 90 yen to the dollar.  The few percentage points more a
    Japanese investor can earn on the US Treasury cannot compensate for the risk
    that these investors are taking.  Hedging currencies risks is unfortunately very
    expensive.    So if I were a Japanese investor, I would have invested in
    good and sound Japanese exporters like Sony, Toyota, Honda, and Takeda.

    Go to Index


     Sportsview 

    The play-off games were full of action and some surprises.  I wasn't surprised
    that Nigeria didn't make it.  But I was surprised by the weak show put on by
    the German, French and Argentinien teams.  Denmark is the big surprise of the
    play-off games.

    Go to Index
     
     
    *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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