i posted the news: google lowers its range from 110-135 to 85-95.
okay: also, Lehman lowers rating on japan
janus identifies ING as the folks who are withdrawing $5B
Lehman Cuts Japan Stk Exposure To Neutral Vs Overweight
TOKYO (Dow Jones)--Lehman Brothers Holdings Inc. (LEH) has advised investors to cut positions in Japanese equities and put more money in stock markets elsewhere in Asia, particularly South Korea and Taiwan.
In a report dated Aug. 16, the U.S. investment bank said it was reducing its recommended exposure to the Japanese stocks to neutral 9% from overweight 12%. It also raised its exposure to Asia ex-Japan to overweight 11% from an already overweight 8%.
"Valuing the Japanese market has always been difficult, and while current forward multiples of 16X are lower compared with history, they are above those on offer elsewhere in the world," the report said.
"For the moment, we will reduce Japanese exposure to a neutral position, with a strong preference for Asia ex-Japan and Europe."
(MORE) Dow Jones Newswires
08-17-04 2359ET
DJ Lehman Cuts Japan Stk Exposure To Neutral V Overweight -2
Lehman said that since the end of February, the Korean stock market has fallen 13% and the Taiwan stock market has plunged 19% while stocks in Japan are up 3%.
"We think this is overdone," the report said.
In South Korea, where worries run high about a slide in consumer spending in the wake of the credit card-related boom-bust cycle, there have been signs that retail sales are beginning to grow again, Lehman said.
Moreover, the recent interest rate cut in South Korea demonstrates a more proactive policy stance toward the economy and also shows that the Korean authorities can lower rates if needed, Lehman said. Fiscal policy is also working for the Korean economy, while private investment could be poised to gather speed in coming quarters, Lehman said.
In Japan, by contrast, there have been a string of disappointing developments recently, Lehman said.
Japanese gross domestic product figures last weak showed solid personal consumption for the April-June quarter, but Lehman says consumer spending has been running ahead of income growth, while retail sales have been soft.
Lehman predicts Japan's economic growth will slow sharply to 1.2% in 2005 from an expected 4.1% this year. South Korea, on the other hand, appears to be gathering steam. Lehman expects growth there to accelerate to 5.5% in 2005 from 4.8% this year. Taiwan's economic growth will likely ease to 5% next year from 6% this year, Lehman said.
"This is important since stock market earnings forecasts for these markets are very closely related to economic variables," the Lehman report said.
Stocks in South Korea and Taiwan also look cheap, Lehman said.
The Korean market is selling on a forward price-earnings ratio of 6.4 times - much lower than its 13-year average of 12.4 times. The market in Taiwan also looks underpriced, trading at 9.3 times compared with its average multiple of 19 times, Lehman said.
-By Arran Scott, Dow Jones Newswires; 813-5255-2929; arran.scott@dowjones.com
-Edited by Bennett Richardson
