Europe and Far East present opportunities and howevers

Forget, for a moment, Wall Street's momentary focus on the United States stock and bond markets, underscored by the upbeat Dow Jones industrial average of recent days. Yes, there are gains to be made in domestic markets, says William Rutherford, president of ABD International Management Corporation in New York, but he also sees long-range opportunities for investors abroad, in Europe and East Asia, including Japan.

And, with some qualifications, so do Barton Biggs of Morgan Stanley & Co. in New York and David Hale of Kemper Financial Services Inc. in Chicago.

``We strongly believe that there are some very good investment opportunities outside the United States in the next few years,'' says Mr. Rutherford. ABD's interest in matters overseas is not coincidental: The company is a subsidiary of Dresdner Bank AG in Frankfurt. With total assets of about $500 million, ABD seeks to ``maximize investment returns within a controlled-risk environment.'' Subsidiaries of the Dresdner Bank cumulatively manage assets of about $25 billion.

Rutherford's interest in international finance was furthered by his years of public service and private money management in the Western US. From 1984 to 1987, he was Oregon state treasurer.

His current enthusiasm for overseas investments is linked to what he sees as gains flowing ``from economic consolidations and mergers in Europe during the next few years,'' as the members of the European Community work to achieve economic unity by 1992. Thus, even if there is a slowing in the world economy as a whole, he says, new projects in Europe will provide opportunities for US investors.

If Rutherford has any concern about the current world economic setting, it is over rising inflation, or rather, as he sees it, ``fears about rising inflation.'' More than anything, he says, the investment community should deal with that ``sense of apprehension,'' which can adversely affect both government and private-sector decisions.

Rutherford is not alone in his concern about inflation and interest rates. Mr. Hale, an economist with Kemper Financial Services, also sees inflationary pressures as a major variable setting the tone of the world economy during the months ahead.

Still, Hale points out that some global pressures on rates have dropped recently, such as in Japan. The possibility of ``rising oil prices and rising interest rates was causing problems in the Japanese bond market in recent weeks,'' he says. Now, Japanese markets have calmed somewhat, in part because of lower oil prices.

Hale sees continued, though slightly slower, growth coming for Japan, the US, and Europe in the next year or so. West German growth will be about 2.5 percent this year, he says, while US growth will be 3.5 to 4 percent, and Japanese growth about 5 percent. Next year, US growth will likely drop, he says, but only by about one-half to one percentage point.

In a recent study for Morgan Stanley, Mr. Biggs also finds investment possibilities abroad. He maintains that ``East Asian markets are the shining investment opportunity of the next decade.''

Biggs recently made a three-week swing through Japan, Thailand, Hong Kong, and Korea. Each country, he concludes, has unique qualifications making it attractive to investors, starting with the premise that ``all of the Asian countries have extremely undervalued currencies by most objective measures of purchasing power.''

Japan's success, of course, is well known. But he notes that ``Thailand, Korea, and the Philippines have the largest potential domestic markets, and Australia also has a relatively low dependence on exports.''

Hong Kong and Singapore, given their heavy dependence on exports, Biggs cautions, ``are the most vulnerable to external developments.''

Five Asian issues that Biggs would list on a model portfolio, according to his report for Morgan Stanley, include Western Mining of Australia, Johnson Electric of Hong Kong, Singapore Airlines, and Saha Union and Thai Farmers Bank, both of Thailand.

Rutherford, of ABD International, points out that his company's 10 top Far East holdings, as of June 30, included capital equipment, electronics, material handling, financial, construction and real estate, and consumer nondurable companies. European holdings were somewhat similar, but included pharmaceutical and energy-related businesses.

Still, most US investors have been focusing on markets at home in recent weeks, and for good reason. The US index of leading economic indicators, factory orders, home sales, and car sales were all up last week, suggesting an economy that continues to demonstrate remarkable vitality.

On the international front, oil prices dropped slightly, following the failure of a pricing committee of the Organization of Petroleum Exporting Countries to take action to curb production.

For the week, the Dow Jones industrial average closed down 9.60 points, at 2,119.13.