Fall in industrial shares expected

Press, Volume CXII, Issue 33111, 29 December 1972, Page 4

Fall in industrial shares expected

<X.Z. Press Association —Copyright) SYDNEY. December 28. The Australian industrial share market is suing to fall quite sharply in 197”, the managing director of Capital Services, Ltd (Mr A. Donnelly), predicted yesterday.

He said that there were several reasons for his beliefs i that the industrial market iwas vulnerable. These were: In the last 15 years sharp rises such as the gain of 1 about 50 per cent between October. 1971. and June. 1972, have, without exception been followed within the next 12 i months or so by a cyclical decline. jT'e almost sideways move-, ment of the industrial market from June to December was a fairly . certain sign that the ! market had run out of ■ steam. In the past two decades there had been no instance of the market taking off again into a further bull phase after being stalled for as long as six months. I The industrial market had a cycle of about four to | four and half years and, | it was now almost four, years since the last! cyclical peak in April, j 1969. (Industrials at present were 27 per cent above the April, 1969, peak and that was quite a rise. [lndustrial share prices in relation to dividend yields and price earnings multiples were at very high levels. ! Mr Donnelly said that the sharp decline in the finance

group index in recent weeks could be an early symptom of a forthcoming general market malaise. Holders of property stock* needed to be particularly wary for they faced a double threat—the decline in the industrial market and the likely onset of a major property investment slump. Mt Donnelly said.