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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek technology

OCTOBER 1, 1999 VOL. 25 NO. 39

E-vesting: Taking Stock of Tech
After a shaky start, the Asiaweek.com Portfolio found its legs. Now the index includes two racier Internet companies
By JIM ERICKSON

This is a marathon, not a sprint. That's what we kept telling ourselves as the Asiaweek.com Portfolio, our selection of 20 Asian Internet and technology stocks, stumbled off the starting line after its June 30 launch. Some pullback was expected. A furious spring rally in Asian technology shares had given way to greater caution by investors. But many of our selections submerged rather alarmingly and the entire group stayed underwater through most of August.

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Saved by the sector's legendary volatility. Paced by gains in Softbank, Son Masayoshi's Internet consortium, the portfolio snapped back in late August and September. Lehman Brothers began coverage of Softbank three months ago, calling it "the hidden gem of the global Internet sector." A string of Softbank investments and partnerships, many of them in online finance, propelled the stock to a 51% gain between July 3 and Sept. 17, although it gave up ground recently. Other outperformers were Japan's Trend Micro, maker of anti-virus software, up 49% since July 3, and Web portal Yahoo! Japan, up 50%.

Laggards included Cable & Wireless HKT, down 10%, and Pacific Internet, down about 19%. Creative Technology fell 23%. But they did not drag us under. By Sept. 17, the group in total was up slightly better than 15% since inception, compared to a 4.7% rise in the tech-heavy Nasdaq Composite Index over the same period.

We're not altogether satisfied. We assembled the portfolio with misgivings about Asia's shortage of public companies that derive most of their revenue from the Internet. Although we would like a broad range of info-tech stocks represented, the initial line-up is over-populated with telecommunications companies that provide Internet services on the side.

That's why we're adding to the list two Hong Kong high-rollers, China.com and Pacific Century CyberWorks (and subtracting Singapore Telecommunications and VSNL, India's big international phone company). Asia's most-watched IPO to date, China.com soared on its opening day on Nasdaq in July, and investors have been on a wild ride since. The Internet portal has been knocked as second-rate, but now is armed with $150 million for improvements. More wild swings are in the offing. It is widely believed that America Online, a China.com stakeholder, will join with its partner in a Hong Kong Internet access service.

As for Pacific Century CyberWorks, the Hong Kong-listed company counts among its assets the Cyber-port, a proposed office/residential complex for the tech industry. But real estate is not propelling this stock. We like PCC chief Richard Li's vision of serving high-speed Net access throughout Asia via satellite and cable-TV networks. Let's see if that flies.



For a complete listing of portfolio stocks, see www.asiaweek.com/technology/990625/2_portfolio.html

Source: Asiaweek Research. Bridge Information Systems. All share prices are in local currencies


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