Most Hawaii stocks
fail to keep up
Although 15 companies
By Rob Perez
saw their share prices rise in 1997,
only 6 beat the overall market
Star-BulletinFor Hawaii public companies, 1997 was nothing to brag about -- at least when it came to their share prices. Only 6 of 24 stocks of Hawaii interest tracked by the Star-Bulletin managed to beat the major stock market barometers.
Eight got trashed -- their shares lost value -- even as the overall market climbed to new highs, continuing an unprecedented bull run.
A few local issues eked out small gains.
Still, seven companies enjoyed double-digit gains -- two had a triple-digit increase -- despite Hawaii's seven-year economic slump.
"It certainly was a mixed bag" for local stocks, said Colin Watanabe, branch manager for National Securities Corp. in Honolulu.
Expect much the same in 1998.
With the state's economy showing little signs of turning around and people's expectations reflecting the sluggish times, most market watchers anticipate moderate growth, at best, for local stocks.
"I believe the general malaise won't help Hawaii stocks," Watanabe said.No such malaise held back the overall stock market in 1997.
The Dow Jones industrial average, the most popular stock market indicator, rose 22.6 percent, while the broader Standard & Poor's 500 jumped 31 percent.
But much of those increases came in the first half of the year. In the second half, the financial problems plaguing Asian ec-onomies put a damper on the dizzying growth, and those problems could be a drag on local stocks this year, market watchers say.
Hawaii likely will go through some belt-tightening because Asian visitors won't be as plentiful due to the currency turmoil affecting their countries, said Paul Loo, senior vice president in charge of Dean Witter Reynolds' Hawaii and Hong Kong offices.
"I think Hawaii probably will feel more of a negative impact than say Silicon Valley or other parts of the United States," Loo said.
But over the long haul, Loo sees the Asian crisis benefiting Hawaii and the rest of the United States as those countries turn to U.S. investors and companies to help their economies recover.
Hawaii's major banks likely will participate in that recovery effort, Loo said.
Partly for that reason, Loo is bullish on major bank stocks.
The banking sector, helped by low interest rates, was one of the few that as a group generally fared well in Hawaii in 1997.
Pacific Century Financial Corp. and First Hawaiian Inc., parent companies of the two largest banks in the state, saw their stocks rise nearly 18 percent and 13.6 percent, respectively.
CB Bancshares Inc., parent of City Bank and International Savings & Loan Association, was one of the year's top gainers at nearly 51 percent.
The top gainer among all companies was Castle Group Inc., which saw its stock price more than double. The company, which manages hotels and resorts, has benefited from expansion outside Hawaii.
On the down side, Hawaiian Natural Water Co. was the biggest loser. Its stock price dropped 60 percent since the company went public in May.
Hawaii's two biotech companies, Cyanotech Corp. and Aquasearch Inc., also were big losers. Their stock prices fell 56.8 percent and 47.5 percent respectively.
Going into the new year, Loo said investors shouldn't expect the stellar returns that the overall market has seen since 1995.
"After three dynamite years, I think most investors need to downsize expectations for the next year or so," he said.
