Business Briefs

Reported by Star-Bulletin staff & wire

Monday, April 26, 1999

AT&T takes stake in Japan Telecom

TOKYO -- AT&T Corp. and British Telecommunications Plc will take a combined 30 percent stake in Japan Telecom Co. for $1.84 billion. This is the first joint investment by AT&T and BT since the two companies announced plans last summer their intention to form a global venture to serve international business customers and carriers. Under the deal, AT&T and BT will each hold a 15 percent stake in Japan Telecom, the companies said.

Computer sales spur stock prices

NEW YORK -- Shares of Dell Computer Corp., International Business Machines Corp., Apple Computer Inc. and other personal computer makers rose today after industry reports showed that first-quarter shipments of the machines exceeded expectations.

International Data Corp. yesterday said worldwide shipments of personal computers rose a larger-than-expected 19 percent in the quarter as consumers kept purchasing machines after the traditionally strong holiday buying season. "Consumer demand was a lot stronger than usual," said analyst John Brown of Framingham, Mass.-based IDC, which earlier had forecast shipments to rise 14 percent.

Ebay goes high end; to buy auction house

SAN JOSE, Calif. -- Online-auctioneer eBay Inc. said it agreed to acquire closely held auction-house Butterfield & Butterfield Auctioneers Corp. for $260 million. EBay said the deal will bring fine and decorative art and collectibles to its online operations, accelerating its penetration into higher-priced items. Currently, almost all of eBay's listings are posted by individuals, and sale prices frequently are below $20 an item. EBay is based in San Jose, Calif. Butterfield, a San Francisco auction house, said it canceled a planned initial public offering because of the deal.

In other news . . .

LAS VEGAS -- Southwest Gas Corp. said today it accepted an offer to be acquired by Tulsa, Okla.-based Oneok Inc. for $1.8 billion, or $30 a share, in cash.

Of Mutual Concern

News for mutual fund investors

Janus Twenty Fund closes to new investors

DENVER -- Janus Capital Corp., the 12th-biggest U.S. mutual fund company, has closed its top-performing Janus Twenty Fund to new investors after seeing assets quadruple to $25.9 billion since late 1997. Janus Twenty, managed by Scott Schoelzel, makes investments in 20 to 30 stocks. It will continue to accept cash from existing shareholders.

"Janus is taking the right step," said Eric Kobren, who runs Insight Management, a financial advisory firm in Wellesley, Mass. "There's been so much money flowing in at such a fast rate that it makes it more difficult to invest the money in a timely fashion."

Janus Twenty joins other popular funds such as Fidelity Magellan, Putnam New Opportunities, Vanguard Primecap and Sequoia Fund that are closed to new investors. At least one other Janus stock fund, Janus Overseas, is also shut.

Janus Twenty soared 73.4 percent last year, ranking 16th of 7,630 funds tracked by Bloomberg Fund Performance. This year, the fund was up 25.4 percent through last week. Janus Twenty's biggest holdings included America Online Inc., Dell Computer Corp., Microsoft Corp. and Time Warner Inc. as recently as Feb. 28, the company said.

Vanguard warning of 'lofty' valuations

VALLEY FORGE, Pa. -- Vanguard Group, the second-biggest U.S. mutual fund company, sent a letter to investors last week warning them that the domestic stock market is at "lofty heights."

Vanguard, which manages more than $475 billion of assets, wrote that stock market valuations are historically high compared with companies' earnings and dividends.

"These lofty heights are rarely the platforms from which major market advances are launched," Vanguard wrote in the letter to shareholders. The high valuations "should be viewed as a blinking yellow light."

Vanguard, led by John Bogle, has warned investors periodically about high stock prices in recent years. Bogle, Vanguard's senior chairman, said in January 1998 that investors should expect stock market gains to return to more historical levels of below 10 percent. The Standard & Poor's 500 index surged 28.6 percent last year and through last week was up another 10.4 percent this year.

Global fund managers favor Japanese equities

LONDON -- British and European fund managers increased their holdings of U.S. and Japanese equities in April, according to asset allocation surveys released by Reuters last week.

U.S. fund managers also increased their weightings in Japan and elsewhere in Asia, but marginally reduced their domestic equity holdings compared to their previous poll. Japanese investors were also more bullish about their domestic stocks while scaling back on European weightings, citing a bearish outlook for the European economy despite the European Central Bank's credit-easing earlier in April.

Fund managers said they were taking a less pessimistic outlook for global economic growth.