Warning against mining stocks

Press, 8 September 1982, Page 29

Warning against mining stocks

PA London Australian mining stocks may have pitfalls, the "Daily Telegraph" newspaper has warned its readers. The newspaper says that from their 1982 lows in July, the all-ordinaries index has risen 8.9 per cent and the minerals and metals index has added 31.4 per cent. “Australia has outpaced Wall Street and London in the past fortnight but only because sentiment has run well ahead of reality’,” the newspaper's "questor column" said. The reality, according to the "Telegraph." is that major mining companies are reporting some disturbing losses for the period ending June 30, Australia's inflation remains stubbornly high in the 10 to 11 per cent range, wage-hour settlements remain unrealistic, and the country’s competitive position continues to erode. "Overhanging the market is the threat of a general election with the most recent political scandal (that concerning widespread tax avoidance and bureaucratic incompetence) making it debatable whether the Fraser Government will go to the country shortly or hang out until November 1983," the report savs.

n "The world economic recos very, when it comes, will be )' evident first in the United s States and latterly in Australia and of 'the two t markets Wall Street is pre- . ferred. 5 "For pure mining shares ■ and' proof that even under : current conditions profits can be made. South African 1 shares have the edge. 1 "Australia will continue to ride on the tailcoat of optim- , istic talk in the Western world, but after the recent run the watchword must be caution."