What Brokers Say On The Us Factor

The Age

Monday September 16, 1996

Manika Naidoo

Question: To what extent will the local market reflect Wall Street's record performance?

Michael Heffernan, from Shaw Stockbroking:

"Our market will take a bounce when international fund managers realise the US, Canada, UK and Germany are too expensive. Then they will look at Australia with bank yields at 8 per cent, with falling interest rates, and they will see it as a good economy to get into."

Mark Thompson, stockbroker from County NatWest:

"What really kicked the US market was the technology sector, which doesn't have a great impact on our market. Banks had a good run today and this should continue, but I think the overall market probably won't perform as well as the US."

Jeremy Morrison, adviser from William Noall:

"All the predictable stocks were up - the resource leaders and the heavyweight banks. But it was controlled and we certainly didn't catch the Wall Street bug. People are still cautious on Wall Street. We just can't seem to believe the extent of Wall Street's rise. It just seems to go onwards and upwards. We don't have the same earnings momentum in our market - we're earnings shy and that's the difference."

Rohan Carr, from Holst Sharebrokers:

"When Wall Street goes up strongly for a few days, at some stage we have to be dragged along with the flow. We surge and then everyone goes to sleep and loses interest. The US is in a different stage in their cycle than we are. Their companies are performing better and their economy will stay reasonably robust. It's also loaded with high-tech and energy stocks where our index is loaded with resource stocks. Given lower commodity prices we can't compare."

David Bassanese, senior economist with Bankers Trust:

"Low commodity prices will continue to drag the local market and the $A down. BHP is being revalued and that's dragged our market down. We're not a big believer in a big commodity price increase touted after predictions of strong world growth. Some sections of the market are going up."