NASDAQ continues to trek higher (page 1 of 3)

US Stocks
Life science is not just about genetically modified crops like better and bigger yielding corn. In the investment world, it straddles the pharmaceutical, healthcare, and biotech areas. While difficult to pinpoint, the basic explanation is any business that is involved in the improvement of human health aided by the appliance of science to create new therapeutics.

With the help of advance technology, the cost of new drug development and time needed will be reduced by more than 50% & 30% respectively. This is due to the fact that researchers are having a better understanding of the mechanism of diseases, and technology is available to process the literally billions of data points that are needed to quantify the human body.

This is all possible when the mapping of the human genome was sequenced last year. Scientists gained access to the 3-billion biochemical "letters" that spell out tens of thousands of genes.
Rather than the conventional method of trail and error, once the genetic basis of a disease is understood, and what protein it produces, a drug can be developed to block it. It will have much less side effect than the traditional medicines, because it will be a tailored or targeted drug. At present, commercial drugs are based on only 500 therapeutic targets, but with the recent advances, there will soon be over 2,000 available.

Like technology, life science is a high risk, high return investments, but there is a difference. If a drug is developed, an intellectual property will protect the position for 20 years.

For your reference, the following are two companies that are involved in the life science business and are followed by CSFB:

*prospective 2002 earnings & growth rate, losses for MLNM

Applied Biosystem (ABI $80 3/8) - develops analytical systems, software to the biotech industry and research community. Its products are used to analyse molecules and proteins for pharmaceutical development, and testing purposes.

Millennium Pharmaceuticals (MLNM $45 3/16) - apply technology in developing drugs and predictive medicine that enables healthcare professionals to make better informed decisions on drug treatment and patient care.


US Technology Stocks
On a week-on-week basis, the NASDAQ Composite Index gained 5.5% to close at 2770. For the week ahead, we expect the market to continue trekking higher but to lose strength as we approach 3000 due to profit-taking activity. Positive sentiment from favourable December earnings results (from top tier technology companies) released last week is expected to spill-over marginally to the week ahead and support higher prices. We do not expect prices to "run away" and rally without pause (especially, given Mr Greenspan's speech on Thursday).

Nortel Networks (NT US, $40.00, CSFB rating: Strong Buy) released solid 4Q00 results. Though NT posted a loss of $1.41 billion (compared with 4Q99 net income of $172 million), earnings per share from operations of $0.26 cents was in line with estimates. Better than expected sales (+20.6% sequential growth, +34.2% yoy) of $8.82 billion, exceeded First Call consensus estimates of $8.65 billion. Looking ahead, we believe NT is well positioned to post significant market share gains in 2001 in wireless networks, core switching, and DWDM systems. We view NT as a core holding for investments into the technology space. Maintain buy at current levels (12-month price target at $80.00).

Intel Corp (INTC US, $33.56, CSFB rating: Buy) reported 4Q00 numbers with net income (excluding acquisition-related charges) that declined 9% sequentially but increased 10% yoy to $2.6 billion.