Among the sectors which have started to gain the attention of value investors are the technology and (page 3 of 3)

CSFB's analysis of restructuring benefits and cash flow let the analysts conclude that the current share prices already discount a brutal long-term outlook for equipment stocks. The analyst team mentioned Nokia (NOK1V FH; EUR 14.65) followed by Alcatel (CGE FP; EUR 3.05) as the most attractively valued while the cautious stance on Ericsson (ERICB SS; SEK 4.45) was reiterated due to potential cash constraints in 2004. However, this upgrade should not be misunderstood as an outright bullish call on these stocks. The networking sector will continue to remain weak next year. Forecasts for the mobile infrastructure industry were adjusted to a decline of 25% this year (previously 18%) and to 11% in 2003 (from 4%).

Nokia closed the week 8.6% higher in line with a good sector performance and after Nomura Securities upgraded the stock as they expect the company to confirm its 02 guidance this week when they report 3Q 02 results on Thursday. Consensus EPS are expected to come in towards the upper end of the range of EUR 0.15-0.17 per share.

Roche (ROG VX; CHF 98) reported nine months sales yesterday, which were at the bottom end of expectations. Sales came in at CHF 21.7bln, which was virtually unchanged, compared to the same period a year ago. Roche also announced an unexpected charge of CHF 1.2bln to cover liabilities form the Vitamins price fixing case. The US monotherapy approval for one of Roche's most promising drugs, Pegasys, is expected shortly. The company reiterated its full year guidance of mid-to-high single digit sales growth for 2002 with improvements in operating profit and EBITDA margins. In 2002 pharma division sales growth is still expected to be in the mid single digit range (ex Chugai), whilst Diagnostics is expected to grow in double digits. In 2003 both pharmaceuticals and diagnostics are expected to deliver double-digit sales growth in local currencies (incl. Chugai). This is the scenario we are waiting for and reiterated our long-term positive call on Roche.

Arcelor (LOR FP; EUR 10.05) gained almost 8% after the company announced that it would raise steel prices by EUR 20/ton, or about 10%, from the beginning of next year. This is good news as the stock was battered early in the week on the back of concerns that the price increase would be delayed due the weak economic conditions. We reiterate our positive stance on the stock, as Arcelor will benefit from signs of an improvement in the global economies.

This week, among the companies reporting 3Q results are Philips (PHIA NA; EUR 15.92), Nokia (NOK1V FH; EUR 14.65), Ericsson (ERICB SS, SEK 4.45), SAP (SAP GY; EUR 56.70) and Novartis (NOVN VX; CHF 59.50).