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Business Briefs

Reported by Star-Bulletin staff & wire

Monday, February 7, 2000

Official: Japan economy retracting

Associated Press

TOKYO -- A top Japanese economic official suggested the world's second largest economy may have slipped back into recession, but expects growth for the year ending at the end of next month.

In a television yesterday, the country's chief economic planner acknowledged that he expects to see a "considerably large negative figure" when gross domestic product for the October-December quarter is announced next month. That would be a second straight contraction for an economy that shrank 1 percent in the July-September quarter. Two consecutive contractions qualify as a recession. But the planner, Taichi Sakaiya, said he was confident Japan will achieve the 0.6 percent growth that the government is forecasting for the fiscal year ending March 31.

Starr Seigle to work for Kauai bureau

The Kauai Visitors Bureau has retained Starr Seigle McCombs as its advertising agency, in a three-year contract that started Jan. 1 and is valued at $500,000 in the first year. Starr Seigle succeeded the Schiller Group, which had the contract since 1994.

The KVB is part of the Hawaii Visitors Bureau but also initiates programs of its own. It is funded by the state, the County of Kauai and member businesses.

Starr Seigle McCombs is part of Starr Seigle Communications, which also owns QMark Research and Polling, StarrTech Interactive and ProComm Public Relations, and has total annual billings of more than $55 million.

Lucent to acquire Ortel for $3 billion

MURRAY HILL, N.J. -- Lucent Technologies Inc., the world's largest phone-equipment maker, agreed to buy Ortel Corp., a provider of fiber-optic parts used in cable TV networks, for about $2.95 billion in stock.

Lucent will pay 3.135 of its shares for each Ortel share, valuing Ortel at $177.125 a share, the same as Friday's close for the Alhambra, Calif.-based company. Ortel's shares have risen 48 percent this year. Ortel's products let cable TV networks deliver high-speed online services.

Akamai Tech buying 'Net service company

CAMBRIDGE, Mass. -- Akamai Technologies Inc., a maker of software that speeds Web browsing, agreed to buy InterVU Inc. for about $2.8 billion in stock to offer more audio and video services over the Internet. Cambridge, Mass.-based Akamai will swap 0.5957 share for each InterVU share. That values InterVU shares at $139.99 each, 20 percent more than Friday's closing price.

Companies including CNN.com, Cnet Inc. and Microsoft Corp. use San Diego-based InterVU's services to broadcast events, live radio or other multimedia on their Web sites.

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Of Mutual Concern

News for mutual fund investors

Janus, Fidelity, Vanguard woo most cash in January

U.S. stock mutual funds attracted about $24 billion of new cash in January -- their biggest monthly intake since April -- though most fund groups didn't see a dime of it, according to estimates by TrimTabs.com Investment Research Inc.

Of the 88 fund companies tracked by the Santa Rosa, Calif.-based firm, 73 reported net outflows and almost half the net sales were accounted for by last year's biggest sellers, Janus Capital Corp., Fidelity Investments and the Vanguard Group.

"It's clear that there has been an earthquake" as investors embraced aggressive growth funds, said Carl Wittnebert, TrimTab's research director. Growth and income funds that were popular most of 1999 lost an estimated $500 million in January.

Fixed-income funds continued to hemorrhage cash as interest rates rose. Bond funds had outflows of $8.1 billion. That came after $12.7 billion in December, their worst month ever, according to Boston-based Financial Research Corp.

Equity funds investing primarily in the United States took in about $17.7 billion of net new cash, while international and global funds took in an estimated $6.3 billion, Wittnebert said.

Merrill Lynch to tap hot Internet market

NEW YORK -- Merrill Lynch & Co., whose mutual funds posted net withdrawals last year, filed with the Securities and Exchange Commission to open a new fund focused on Internet companies to tap the hottest-selling market segment. The fund, to be called the Internet Strategies Fund, would be run Paul Meeks, now manager of the firm's Global Technology Fund, said Merrill spokeswoman Christine Walton. It's likely to open in March.

Merrill's stock pickers will invest primarily in "equity securities of issuers that managers think will use the Internet as part of their business strategy," said Walton. The new fund is part of the firm's effort to bolster its offerings of growth stock funds. Its emphasis on value stocks crimped returns. Money invested in all Internet stock funds soared 1,250 percent in the first nine months of 1999 to $4.3 billion, compared with less than 10 percent growth for total fund assets, according to a report by Wiesenberger/Thomson Financial, a mutual fund tracking service.

Chase venture capital targets Europe Internet

LONDON -- Chase Manhattan Corp., the second-largest U.S. bank, plans to open a venture capital fund that will invest about $100 million in European Internet and technology start-ups, said people familiar with the bank's plans. Following on the success of its partnership with Flatiron Partners in Internet investing in the United States and Latin America, Chase will likely link with a European venture capital firm.