Business Briefs

Reported by Star-Bulletin staff & wire

Monday, May 24, 1999

Magoon Estate selling winery

Hawaii's Magoon Estate Ltd. is planning to sell its Northern California winery properties, the Guenoc and Langtry Estates Vineyards and Winery.

The estate has retained Morgan Stanley Dean Witter & Co. as its exclusive financial adviser in finding a buyer and said Sotheby's International Property will help market the property. Located 90 miles north of San Francisco, the 21,000-acre site includes a ranch, vineyards and a winery.

State office to lead Japan trade mission

The state Department of Business, Economic Development & Tourism will lead a mission to Osaka and Tokyo in October to help Hawaii businesses develop business opportunities with Japanese companies.

Island businesses taking part will go to the Global Opportunities Business Convention in Osaka Oct. 18-20 and be in Tokyo Oct. 21-22, where a seminar will be held. For more information contact Richard Bahar at DBEDT, 587-2769.

NYSE to extend session in July

NEW YORK -- New York Stock Exchange Chairman and Chief Executive Richard Grasso today said the world's largest stock exchange is likely to add some evening trading hours as early as July. The announcement from the world's largest stock exchange comes after the rival Nasdaq stock market and two private companies said they would offer evening trading starting this summer. Specific details have yet to be released. Previously, the NYSE said it planned to start early and late trading sessions in June 2000.

The NYSE also confirmed that Toyota Motor Corp. will list its American depositary receipts on the NYSE, switching from Nasdaq.

In other news . . .

NEW YORK -- Barnesandnoble.com Inc., the online bookseller owned by Barnes & Noble Inc. and Bertelsmann AG, increased by 42 percent the expected price of shares it plans to sell later today in an initial public offering.

It plans to sell 25 million shares at $16 to $18 each, up from $11 to $13.

Of Mutual Concern

News for mutual fund investors

Vanguard founder's son to start own fund firm

WASHINGTON -- Mutual fund manager John Bogle Jr., son of the founder of Vanguard Group, says he is planning to start a money management firm of his own.

Bogle, 39, abruptly left Numeric Investors L.P. in February after a dispute with other senior managers about the Cambridge, Mass.-based firm's senior management. He plans to have his new firm, Bogle Investment Management L.P., up and running by September. Bogle would not comment on the exact reason for his departure from Numeric, but said they parted "on good terms." Bogle plans to start with two portfolios, a small- and micro-cap portfolio similar to the one he ran at Numeric and a "market neutral" fund that invests in small-cap stocks. Bogle was a managing director at Numeric, and brought the firm into the mutual fund business, starting N/I Numeric Investors in 1996. Bogle's father, John C. Bogle, left an executive position at Boston's Wellington Management to start Vanguard, which has grown into the nation's second-largest mutual fund firm, behind Fidelity.

New mutual funds open at slowest rate since '90

BOSTON -- New U.S. mutual funds are opening at the slowest rate since 1990 -- a sign that 11,825 funds give investors more than enough choices.

An estimated 111 new funds opened so far this year, down 82.5 percent from 635 in the first 4 months of 1998 and down from 644 funds in the same period of 1997, according to Wiesenberger, an industry research group in Rockville, Md. The last time so few funds were introduced in the early part of a new year was 1990 when 64 new funds opened. "The boom is subsiding," said Stephanie Kendall, an analyst at Wiesenberger, a unit of Boston-based Thomson Financial. "There are simply so many funds that there's not much need for new ones."

Three managers leaving Soros Fund Management

NEW YORK -- Three investment managers at Soros Fund Management LLC are leaving the hedge-fund company headed by billionaire George Soros to form their own firm.

Lief Rosenblatt, Mark Sonnino and Gabe Nechamkin are departing on an amicable basis, said Nechamkin. He said three other Soros Fund employees will join their new investment company, Satellite Asset Management. The new firm will manage about $2 billion for Soros during a "transition period."

The group worked as a "special situations" team at Soros, focusing on distressed stocks and bonds and merger arbitrage, or buying and selling shares of merging companies. The managers were among the steadiest performers at Soros and will continue to pursue such investments at Satellite Asset Management. The departure comes as Soros's flagship $6.75 billion Quantum Fund has suffered 3 years of sub-par performance. The fund failed to surpass the gains of the Standard & Poor's 500 index and its own average historical return of about 30 percent a year during that time.

Fidelity execs see move to smaller companies

WASHINGTON -- Fidelity Investments, which may be the ultimate shop for large-company and growth investing, apparently sees the stock market turning in favor of smaller, less-pricey companies.

Speaking last week in formal presentations to the Investment Company Institute general membership meeting here, Fidelity Management & Research Co. President Robert Pozen and Vice Chairman Peter Lynch both indicated the stock markets may be ready to turn in favor of smaller companies and value stocks. "In April, we had the sharpest rotations we have seen yet from growth to value," said Pozen. "All of our go-anywhere funds will be moving toward small-caps and mid-cap stocks, and maybe toward more value."

The stock market's continued boom -- up about 50 percent since last fall -- has been based on sharp increases in a small number of stocks. These companies fall under the general heading of "growth companies" because they have been posting consistently rising sales and/or profits. So-called "value stocks" are those of companies seen as being underpriced, but with the potential to improve.

"Last year, of the largest 1,000 companies, the top 100 were up an average of 42 percent," said Lynch, best known for having managed Fidelity's Magellan Fund. "The next 900 were up 4 percent. There will be some values in those 900 stocks."