By HELEN HUNTLEY, Times Staff Writer © St. Petersburg Times published March 23, 2003

Investors putting their money into foreign funds in the past year have been richly rewarded. Market watchers say the trend is far from over.

Our foreign policy isn't the only thing taking a beating in Europe. The U.S. dollar is getting battered,too. Since its peak a year-and-a-half ago, the dollar has lost a fourth of its value against the euro, the 4-year-old European currency.

But bad news for the dollar is good news for some U.S. investors, who are discovering ways to capitalize on the dollar's weakness and the higher interest rates available overseas.

Those bold enough to make the move last year have been richly rewarded. In the past year, international bond funds were up an average of 19 percent, second only to gold funds among the mutual fund sectors tracked by Morningstar.

While predicting currency movements is never a sure bet, many market watchers say this trend is a long way from being over.

"We believe we're about one year into a multiyear decline in the U.S. dollar," said Frank Trotter, president of Everbank, an online bank that specializes in foreign currency accounts. The unusual bank, which has its headquarters in St. Louis, offers accounts in euros, Norwegian krone, Mexican pesos and many other currencies.

Trotter said the bank's foreign-denominated deposits have doubled in the past year to $165-million. The six-month CD offerings recently available included the Japanese yen at 0.01 percent, the euro at 2.11 percent, the New Zealand dollar at 5.06 percent, the Mexican peso at 7.25 percent and the South African rand at 12.1 percent.

Although it is among the lower-yielding offerings, the euro is by far the most popular choice, Trotter said. That's because most investors who open accounts are only secondarily concerned about interest earnings. Their primary goal is to make money on changes in the exchange rate, by holding the favored currency until they think it's an opportune time to convert back into dollars. They pay an exchange fee of 0.75 percent in each direction. To them the euro looks strongest.

In effect, the euro has become a default choice for investors who do not want to hold Japanese yen or U.S. dollars.

"It's the lesser of three evils," said Ian Kelson, who manages the $1.2-billion T. Rowe Price International Bond Fund from London. "The case for the weak dollar and the strong euro is not at all to do with anything very good in (the economy of) Europe, which if anything has weaker growth than in the U.S."

Part of what's wrong with the dollar is the political and economic uncertainty created by the threat of terrorism and war with Iraq. However, the reasons for the dollar's fall go much deeper and are not likely to be quickly resolved.

"Usually when there is some sort of conflict, the dollar is seen as a safe haven -- except when the conflict involves the U.S.," said Scott Brown, economist for Raymond James & Associates in St. Petersburg. "Venezuela, Iraq and North Korea are all U.S. problems. If we get a solution to the Iraq conflict, things clear up in Venezuela and we get some dialogue with North Koreans, we could get some short-term improvement in the dollar. But long-term trends will be in place for a while."

Some describe the dollar's decline as inevitable. Like a pendulum, the dollar could go only so far in one direction before it had to swing back the other way. As the dollar strengthened, U.S. goods became increasingly expensive overseas, exports fell and manufacturers suffered. The weakening dollar has begun to produce a pickup in foreign sales, although that is being tempered to some extent by weak economies around the world.

"This is a natural process," said Michael Hasenstab, portfolio manager of the Franklin Templeton Hard Currency Fund in San Mateo, Calif. "Revaluation of the U.S. dollar could be beneficial to the U.S. economy by helping export growth. These macro adjustments tend to move toward equilibrium. We don't know when we will reach that equilibrium, but the pressures that have driven the U.S. dollar to these levels are still in place."

At the root of the dollar's woes is the current account deficit, the government's way of tracking money flowing into and out of the country through trade and investment. So many more dollars are flowing out that the deficit has now reached 5 percent of U.S. economic output, high enough to make investors nervous. Europe, by contrast, has a surplus.

Three big trends have contributed to the problem:

-- The balance of trade is off because U.S. manufacturers cannot sell enough U.S. goods overseas to keep pace with the U.S. consumer's appetite for foreign goods.

-- For years the trade deficit was offset by foreign investors making equity investments in the United States, buying stocks and direct interests in U.S. companies and real estate. In effect, the extra dollars we sent overseas to buy foreign goods came back to us as equity investments. But after three years of stock market decline, accounting scandals and a weaker economy, the equity inflows have dwindled.

-- U.S. interest rates are so low that foreign investors are losing their appetite for U.S. bonds. At the same time, the federal budget has moved from a surplus to a deficit, creating a need to sell more bonds. Ultimately that imbalance could lead to higher interest rates, although at least for now, U.S. investors are making up the difference by putting their money in bonds instead of stocks.

"At precisely the time that people lost confidence in the U.S. economy and stock market and became less willing to make equity investments, yields on U.S. assets fell to very low levels," said Kelson at T. Rowe Price. "Low interest rates are absolutely right for the current U.S. economic climate, but they're not at all helpful in promoting a dollar recovery."

Interest rates also have been coming down in Europe; the European Central Bank has lowered rates partly because of concerns that the strong euro will hurt manufacturing exports. But the rate decline has not occurred as quickly as in the United States, which means European rates still have room to fall. If they do, that could give foreign bonds another boost.

Once the economy begins to improve, interest rates are expected to pick back up, both in the United States and abroad. If that happens, bond prices will fall since interest rates and bond prices move in opposite directions. The longer the term of the bond, the more its price is affected by interest-rate swings.

"I think U.S. bonds are the most vulnerable, but European bonds are potentially vulnerable too," Kelson said. "Our view is that this is not the moment to be very aggressive in terms of duration. It's much nearer the end game in terms of the interest rate cycle."

One way to skirt interest rate risk is to stick with very short-term investments, such as the Everbank CDs or the Franklin Templeton Hard Currency Fund, which keeps the average maturity of the securities it owns at 120 days or less.

"We're not looking to take interest rate risk," portfolio manager Hasenstab said. "Our financial advisers are showing this fund to clients as a hedge against the U.S. dollar" declining. He said the fund is making its biggest bets on the euro, the Swiss frank, Danish Krone and New Zealand, Australian and Canadian dollars.

Investing in foreign currencies and bonds remains a foreign concept for most U.S. investors.

"So far investors are not clamoring for it," said Greg Ghodsi, a stockbroker with Robert W. Baird & Co. in Tampa. "But in doing portfolio reviews, some ask what's going on with the dollar."

Investors who want to bet against the dollar have to be prepared for fluctuations in the value of their investments. The Everbank CDs carry FDIC insurance against bank insolvency, but there is no protection from losses if the dollar strengthens when you bet it would get weaker.

Some types of investments are more volatile than others. Broker Ghodsi said the safety-conscious investor should avoid individual foreign bonds, which have big price swings and may be difficult to sell.

"I don't think the typical investor would want to buy something at 100 (dollars per $100 of face value), see it go to 40 and then back up to 80," he said.

Ghodsi prefers mutual funds for foreign bond investments. He suggests investing through closed-end bond funds, which trade like shares of stock on the New York Stock Exchange and other exchanges. Because they do trade, it is possible to limit losses by setting up a standing order with a broker that will trigger the sale of the bond fund if the share price falls below a certain level.

Before buying any bond fund, investors should check to be sure its investing style matches their objectives. Some foreign funds hedge against currency fluctuations so you don't get big losses on the dollar's movements, but neither do you get big gains.

Foreign bonds and bond funds have not been particularly popular with U.S. investors for good reason: When the dollar was strong, they lost money. In addition, many investors prefer to keep their money closer to home.

For those willing to take the risk, putting some money in foreign income investments will diversify a portfolio since foreign bonds do not move up and down in synch with U.S. investments.

-- Helen Huntley can be reached at huntley@sptimes.com or (727) 893-8230.

Investor Q&A:

Naween A Mangi

Q: I read a column in Fortune Magazine this week which said a US company called Calpers had put Pakistan in its list of countries not to invest in. How does that jive with all the noises out of Islamabad and even from Karachi Stock Exchange officials that the KSE-100 is a superb investment? — Jahangeer N. --Karachi

A: Calpers, or California Public Employees’ Retirement System is a pension fund in the US with $133 billion in assets under management. It’s the country’s largest public pension fund and invests a small portion of its funds, about $1.6 billion in emerging markets. Last year, they had a company called Wiltshire Associates grade various countries around the world based on financial factors, transparency, political stability and labour practices. When the scoring was complete, Calpers pulled money out of Indonesia, Malaysia, the Philippines and Thailand. And a bunch of countries including India, Jordan, Morocco, Sri Lanka, Colombia, China, Egypt, Pakistan, Russia and Venezuela were put on the no-list. Calpers had the survey repeated this year and Jordan was upgraded to acceptable. The Fortune columnist says that the economies of many countries on the prohibited list are in lousy shape. He also says he wouldn’t be surprised if these banned countries’ markets continue to outperform the markets Calpers likes. Now, there are several issues at hand. First, it is possible that Pakistan made it into the prohibited list based on political instability. The logic for that is obvious. However, as far as financial factors and transparency are concerned, the massive improvements in corporate governance over the past two years cannot go unnoticed. And corporate governance and transparency are supposedly issues very close to Calpers fund managers’ hearts. It is surely safe to say that corporate transparency and indeed corporate performance of companies listed in Pakistan are above par. Then, if Fortune Columnist Andy Serwer has included Pakistan in the list of lousy economies, (he hasn’t specified whether he has) he should do his homework. Sure, Pakistan is nowhere close to even having any sort of a definitive plan to become a middle income country, but lousy can no longer be used to describe this economy. A combination of good luck and reform has meant the economy has stabilized with external debt rescheduled, capital inflows coming in and the currency turning stable. Then, the data shows that the KSE has been the best performing market not just in 2002 but year-on-year in 2003 so far as well. To be sure Calpers missed out on the 2002 gain of 112 percent in the KSE-100 Index. Even still, the index offers an average dividend yield of 10.6 percent, which clearly beats returns elsewhere in the world. So the facts speak clearly for themselves. The economy is stable. And the market is a good buy. But Calpers decision may be based on other factors like political and regional stability. And obviously, it’s their decision to trade off high returns for what is perceived to be higher risk. But that doesn’t mean investors right here cannot cash in. Happy investing!

Q: For weeks before the war began, analysts were cautioning that once conflict breaks out, the market will see some fall, at least. Instead, the KSE-100 index has rallied more than 100 points since the war broke out. Isn’t war and uncertainty supposed to send markets tumbling? I’m utterly confused! —Hafiz Rizvi --Karachi A: You’re not the only one! A lot of market watchers’ jaws have dropped in the last two days of trade this past week as bombs fell and the market shot up. That’s why if you’ve seen analyst reports at the tail end of this week, they sound more like jumbled mumbles than concrete analysis. So the pros are probably pretty confounded too. However, it’s interesting to note that the Karachi market is not out of whack. This past week was the US Dow Jones Industrial Average’s best week since 1982 with a rise of 8.4 percent or 662 points. The logic on Wall Street is that US investors were simply betting on a swift victory in Iraq. So in share trade on Friday, every bit of pro-US news coming out of Iraq was sending investors scurrying to the buying counters. Despite President Bush’s warnings that it could be a prolonged conflict, share investors weren’t buying into that line of thought and placed their money on a short, swift war with a clear victory for Washington. Here at the KSE, there was a different dynamic at work. First, worries that the onset of a US, UK invasion would bring MMA supporters out onto the street resulting in city disruptions and violence, were quashed when life continued as normal in Pakistan. No street power of any significant magnitude was stirred up and the calm gave the market a real boost. Then, Pakistan’s seemingly neutral position also gave market players a feeling of security that aid flows would continue uninterrupted. So in a sense the presence of positive factors stirred to life the market which had turned somewhat depressed since the badla crisis of Jan 15. But individual investors must tread with special caution at this time. Indeed, uncertainty and war turns markets volatile at the very least, even if it doesn’t send them tumbling. If the market consolidates early in the week, then things should remain steady. But if this bullish fever persists, the badla rates could begin to snake up once more and that could spell trouble for the market. So far, it appears the buying has been mostly speculative. But if it continues and retail investors start pouring in, the badla market could begin to show signs of strain. Already, badla rates which were at record lows of around 5 percent prior to this week, edged up to 8 percent by Friday. So that’s something to watch out for.

Do you have a question about how to invest your money? Or do you wonder how economic events affect your savings? Write to us at naween@dailytimes.com.pk or fax us at 021-5657362. Please include your name and address.

Fund report Judith Rehak IHT Saturday, March 22, 2003   After two years of a U.S. bond bonanza created by tumbling interest rates, most fixed-income experts are warning that the bond party is over and that it's time to switch into equities. Daniel Fuss, manager of the $1.3 billion Loomis Sayles Bond Fund, sees things differently. "It's a fascinating time for bonds right now," he said recently, citing big value distortions between government and corporate issues in the United States, and widely varying yield curves between the United States, Europe and Australasia. That spells opportunity for Fuss, who shops the world for his favorite value plays, from investment grade to the decidedly risky. One of the best long-term performers in the multisector category, his fund returned 13.18 percent last year, and as of Friday, a gain of 5.8 percent for 2003. An off-shore version, the CDC AM-Loomis Sayles Bond Fund, returned 15.60 percent and 3.65 percent respectively. So how is the portfolio positioned right now? With nowhere to go but up for U.S. rates, Fuss has sold off all of his U.S. Treasury issues. But 20 percent of the fund remains in his longtime favorites, Canada's federal and provincial bonds. Canadian rates are already rising, so he has switched half of the provincials into shorter maturities. "We've made our money, but we still like the currency," he said. The Canadian dollar has been strengthening against the U.S. dollar, which lifts returns. Fuss also owns AAA-rated short-term sovereign debt from Norway, where rates are kept high to hold down inflation. The current yield on Norwegian debt of about 1.5 years is roughly 4.90 percent, versus a meager 1.40 percent on a comparable U.S. Treasury. With this solid background as ballast for the portfolio, Fuss has added riskier fare. He likes U.S. corporates in depressed cyclical industries that should benefit from an improving economy. For example, he owns convertible preferred bonds from International Paper Co., and he notes that he already sees prices of certain grades of paper "rising and sticking". Even racier are carefully selected junk bonds from shaky survivors of the telecom meltdown, like Lucent Technologies Inc. and Corning Inc., both suppliers of telecommunications equipment. "It's risky," Fuss acknowledged, "but I don't mind taking risk at 40 cents on the dollar when the odds are 10 to one in your favor, and as long as you can diversify." His Lucent bonds have doubled in price. "I wouldn't buy any more," he said. Fuss has also dipped into a few of Europe's struggling telecoms. He owns convertibles in Britain's Colt Telecom Group PLC, where he is betting on revenue growth and better financial management, the latter installed by Fidelity Investments, the U.S. financial group whose investment unit is a majority owner of Colt. Colt is also buying back its bonds, another positive sign, Fuss said. Turbulence in emerging markets can yield onetime opportunities as well. In January, the fund boldly snapped up two bonds from Cerro Negro Finance, a venture between Petroleos de Venezuela SA, Venezuela's state-owned oil company and ExxonMobil Corp.,during a crippling strike of oil workers and widespread political unrest. The strike has now ended, and Fuss figures it's in the interest of both ExxonMobil and the government to get production going again. Meanwhile, one bond price has already popped 3.25 percent "The rating agencies are worried about the government, and so are we," Fuss said. "But that's when you buy cheap bonds."

www.quicken.com By Dimitra DeFotis Wednesday, March 19, 2003 11:59 PM ET Printer-friendly version

ON THE VERGE of another Persian Gulf War, the United States has eked out unexpected support from Saudi Arabia.

When it was revealed that most of the September 11 hijackers held Saudi passports, the backlash was palpable: alternate oil alliances would be cultivated.

Fast forward 18 months: the Saudis have allowed the number of U.S. troops, mostly based at the Prince Sultan Air Base, to double in the past month. There are now roughly 7,500 coalition troops in the Kingdom of Saud.

And with Iraq's 1.8 million barrels of daily crude production dwindling as war looms, the Saudis have been surprisingly vocal about picking up the slack, and are now pumping roughly 9.5 million barrels a day.

So while some in the Organization of Petroleum Exporting Countries won't take action perceived as supporting the United States, the Saudis have quietly lent support to the U.S. mission. (The invasion could start within hours, possibly as early as 8 p.m. tonight.)

The Saudis reportedly have 50 million barrels of oil already in tankers, one way it can prevent a precipitous drop in oil prices. They want sustained oil prices near $25 per barrel to encourage consumption.

Prices near $25 should boost global economies by lowering energy costs for consumers and manufacturers, and help some exploration and integrated oil companies whose shares still reflect uncertainty about the impact of the war.

"The Saudi government and the U.S. government go back 60 years," says Michael Rothman, a senior energy market specialist at Merrill Lynch. "And while the relationship might be strained, there is mutual interdependence. The Saudis are the source of supply outside emergency stocks."

The Saudis could produce as much as 11 million barrels a day with more investment, says Tom Petrie, president of Petrie Parkman & Co. in Denver. Saudi Arabia has proven reserves of 262 billion barrels -- 25% of the world's proven reserves and Iraq places second with 113 billion, according to Fadel Gheit, an analyst at Fahnestock & Co.

Oil prices, closing below $30 Wednesday, have dropped 25% from recent highs near $40 as traders conclude U. S. military strength will prevent catastrophic destruction of oilfields and distribution facilities.

In 1991, after U.S.-led efforts were declared a success, oil prices dropped to near $20. OPEC can live with those prices, that's what the major oils budget for, and it provides a great operating environment for exploration and production companies, says John Kilduff, an energy trader at Fimat USA, a New York-based commodity brokerage.

Several energy analysts tell Barron's Online that the remaining war premium of as much as $5 per barrel will dissipate and that oil prices will fall to $28 near term and settle near $25. That's higher than the two-decade average of $20, but inventories are low partly because of disrupted Venezuelan production (see Weekday Trader, " Venezuela Crisis May Fuel Oil Firestorm," December 10, 2002).

Saudi Arabia is almost betting on a quick U.S. victory in Iraq by "pumping as much as it can get out of the ground, because in a week or two, prices could be much lower," says Gheit.

So, which energy companies does all of this help?

In the past year, while oil prices are still up more than 20%, shares in both refiners and energy equipment companies have fallen roughly 24%, according to Thomson Baseline. Integrated oil companies have not fared much better, losing 21%, and drillers are down 18%. Oil and gas exploration companies have held up best, declining 10%.

Roger Mortimer, lead manager of the AIM Global Energy Fund, expects to see oil near $25, but that some energy stocks price in $20 oil.

One is independent Canadian E&P Talisman Energy (TLM, news) . He thinks its shares may not reflect a positive: Talisman sold its business in Sudan last October because investors did not like the political volatility of projects there. Meanwhile, shares are "still extremely attractively valued vs. other companies with its size and scope."

Talisman's international exploration plan launched in 2002 is its most aggressive ever. It expects a roughly 10% annual gain in production in the next two years, according to Standard & Poor's.

The shares trade at a 38% discount to their median forward price-to-earnings multiple of 17.8 times, according to Baseline. And it is trading below its historical discount to its E&P peers.

The other stock Mortimer likes is BP (BP, news), whose diverse businesses buffer it from oil price volatility. That's because it can make up for higher crude prices with higher gasoline prices in the near term -- and can benefit long term from sustained prices near $25 that will spur more exploration projects.

Mortimer thinks earnings estimates will be ratcheted upward as crude prices stabilize, and in the meantime, investors get a dividend (see At A Glance).

"We like BP. You have company with a very strong balance sheet, low net debt, a tremendous amount of cash flow and has been buying back stock," Mortimer says.

Of course, prices would spike higher if Saddam attacks Saudi or Kuwaiti oil fields, and the idea of a quick war is absurd to many Middle East experts.

But for now, Saudi Arabia's massive oil reserves, ramped up production and cooperation with the U.S. should help stabilize volatile oil prices – and calm jittery investors.

www.vheadline.com Posted: Wednesday, March 19, 2003 By: PETROLEUMWORLD

1658 GMT [Dow Jones] Nymex Apr mogas trims losses after modestly bullish stocks reports from API and DOE. Analysts call the data neutral as war's impact on spring mogas demand remains uncertain. "The market is so nervous that it is overlooking the core fundamentals," says an analyst. Active crack- spread trading in Apr, May and Jun seen adding to volatility. Apr mogas dn 9 pts to 96.10 c/gal, May +34 pts to 95.70c; Jun +15 pts to 93.20c. Apr heating oil up 82 pts to 86.60c. (JMX)

1637 GMT [Dow Jones] Nymex Apr natural gas futures contract holding at top of 10c range ($5.28-$5.45/MMBtu). Locals seen bidding up price. Long-term fundamentals still bullish, with low storage, possible cold still around, said Gerry Saccente of ABN AMRO in NY. War with Iraq on periphery of market, "and we're blind to everything right now." Physical gas seen opening uncha to +1c to $5.34/MMBtu as consolidation continues in the market. Physical gas at Henry Hub running around $5.22/MMBtu. Gas in NE running around $5.70-$5.72/MMBtu as weather moderates. Apr at $5.42, +8.1c; May at $5.38, +6.0c.(JEE)

1634 GMT [Dow Jones] While still tight compared to year ago, US gasoline stks fell less than expected. Add to this less than stellar demand, a rise in imports to more than 1 mln bpd and relatively flat production levels. Gasoline inventories fell 900,000 bbl to 201.1 mln bbl, dn 15.1 mln bbl on the year. Expectations were for a decline of 1.5 mln bbl. Demand, at 8.6 mln bpd, fell from more than 9 mln bpd last week, and was 100,000 bpd lower than a year ago, EIA shows. The move shows a slow week mid-Mar, amplifying bearish impact of Feb's break in a trend of higher demand. Inventories on the West Coast, where Calif is now seeing avg price of $2.145/gal (up 65c on yr), rose 1.9 mln bbl to 30.5 mln bbl. (BWH)

1619 GMT [Dow Jones] Nymex April crude extends losses after inventory DOE/API reports showed a small and large build in crude stocks, respectively. Analysts say traders are discounting the reports in favor of the impending war with Iraq. "Everyone is jockeying in and out of the front-month and wondering where to go," said analyst Bill O'Grady with A.G. Edwards. Expiring April front-month crude contract seen contributing to volatility. April crude -72c at $30.95/bbl. (JMX)

1617 GMT [Dow Jones] New England daily power trades down with warmer weather seen easing electric demand. Deals are done from $55-$57/MWh, a trader at a merchant energy company says, off $6-$7 from Tue. (KAM)

1607 GMT [Dow Jones] The West Coast and Rockies were the exceptions in the US crude inventory rise of 400,000 bbl, EIA reports. Builds of 900,000 bbl on the East Coast, 2.3 mln bbl on the Gulf Coast, and 1.6 mln bbl in the Midwest offset a draw of 4.2 mln bbl on the West Coast and 200,000 bbl in the Rockies. Expectations for a build in US stks were much higher, 3 mln bbl. Imports rose sharply, 1.072 mln bpd, to 8.693 mln bpd. (BWH)

1600 GMT [Dow Jones] Nymex oil complex pares opening losses in response to EIA inventory statistics showing declines in gasoline, distillate stks (dn 900,000 bbl and 1.1 mln bbl, respectively). Smaller-than-expected build in crude stks (up 400,000 bbl) eases May crude losses, with contract now down 15 at $29.90/bbl. Apr crude off $1.17 at $30.50. Rise in refinery utilization (+1.0 pct pt) counters somewhat rise in crude imports (+1.072 mln bpd to 8.693 mln bpd) but distillate demand hefty at 4.526 mln bpd. Apr heating oil +32 pts at 86.10 c/gal; Apr gasoline -49 pts at 95.70c.(BWH)

1540 GMT [Dow Jones] Little immediate reaction from IPE Brent, gasoil mkts to DOE/API data which is deemed neutral to slightly bullish compared with expectations, says broker. Big discrepancy between API and DOE crude data is causing traders to look at PADD breakdowns carefully, may delay any potential upside, he says. API shows crude stocks up 5.144m bbls, with DOE showing a 0.4m bbl rise. (SMF)

1535 GMT [Dow Jones] N Sea crude mkt remains subdued Wed afternoon as participants watch developments in Iraq, traders say. Statoil, Norsk Hydro each have an Oseberg cargo for cross-month loading available. Differentials seen as follows: Oseberg at dtd +70c, Forties at +65c, Ekofisk at +55c, Statfjord at +$1.25 and Gullfaks at +1.30.(SJC)

1530 GMT [Dow Jones] Nymex Apr crude, expiring Thu, plunges at open, narrowing spread to May to less than $1/bbl. Contract is dn 97c at $30.70/bbl. Funds behind selling but locals jumping in, too. Traders appear still fixated on notion that war with Iraq will be quick and oil supply at least adequate, an analyst says. May contract is dn only 20c to $29.85/bbl. Expectations for build in EIA, API rpts weigh on prices. Apr tests support at $30.95; next support is $30.05.(BWH)

1456 GMT [Dow Jones] Nymex Apr natural gas seen opening unchanged to one cent higher, to $5.34/MMBtu in continued consolidation. Physical gas at Henry Hub starts day around $5.22, slightly above its Tue range. Gas in NE trades around $5.85-$6, inside its Tue range. Mkt looks ahead to Thu gas storage report and transition to spring with storage levels hovering at lows. (JEE)