Market report
CUSTOS
We seem to be in the middle of a classic bear market, short rallies (last Friday and Mon, day's movements were an example) quickly giving way to prolonged declines. Equities are extremely sensitive to the Chancellor's repeated references to the increasing severity of the credit squeeze and further talk of pressure on the 'money supply. Good profits figures make little impression. Civil engineers John Laing, for in- stance, announced a 60 per cent r.se in pre- tax profits and the results of a revaluation which showed that property assets alone at 22s 6d a share outstrip the market prize for the whole group (:9s 6d). John Laing must be an out- standing share now, but for the time being nobody wants to know. Gilts, of course, reel on down the hill. The us treasury bill rate was sharply up at the beginning of this week and talk round the market now is that higher Bank rate will be announced very soon. Some be- lieve there will be a rise by two whole points to 10 per cent.
Meanwhile it is 'worth looking to see how the unit trusts have performed this year. That excellent magazine the Unithotder keeps the score. Over the first four months of the year
11.1 the Financial Times all-share index declined by 9.4 per cent. The Unitholder's own index, which measures the average performance of unit trust funds, shows a fall during the same period of 3.9 per cent and only fourteen trusts out of 183 failed to better the index. Even more im- pressive, thirty trusts actually achieved positive gains during the period. The first five were Hodge Overseas with a 10.6 per cent rise in the first four months, Cross Channel with 8 per cent, then Britannia Basic, Pan Australian and Ebor Commodity all showing gains of over 5; per cent. Cross Channel is Save and Prosper's smallest trust with about £1 million invested in European shares. Otherwise it is commodity trusts which are doing well. Copper, mining finance and rubber shares have been unusually strong this year. At the bottom of the table are unit funds linked with investment trusts, which traditionally do badly in declining markets be- cause of their gearing.
Previous page
