Market Wrap - Week Ending Friday 16th Nov 07

By Jason Fittler

Another week and the market could not decide where it wanted to go. The week started with the market falling, Daniel had a big bear smile all over his face as he hoped that this was the start of a short term market correction… a chance to pick up some bargains. However, this changed on Wednesday when the US rebounded up 2.5% only to start falling back again on Thursday. We ended the week down slightly with the market losing another 66 points on Friday.

There are however a number of stocks which have been oversold in the market at present.  This market is so jumpy that any bad news or hint of bad news can push a stock down. This week we saw Flight Centre announce a capital raising however part of the raising was a sell down, the share price fell 7% straight away. ANZ announced disappointing figures and a move into the Asia market and the price fell back to the August low. When good stocks fall back on this sort of news it is a buying opportunity a chance to buy good stocks to hold for the long term. China continued to loose some ground last week on the back of concerns over the effect of the credit crunch in the US.

The most common asked question last week was should I sell RIO, RIO hit a high of $148. It sure does look like a good time to take a profit.  As I say “You can not go broke taking a profit,” however this time the answer is no. I think the BHP and RIO take over still has more up side and I have no problem holding the new company so save yourself some capital gain and hold on for now. The resources sector still has some more up side yet. I also expect as a side effect to this takeover that we could expect to see more consolidation in the resources sector over the coming 12 to 18 months. Those of you who are keen to play the more speculative side of the market may find some opportunities here.

Other news last week was Cardno raising funds through an intuitional book build. They issued another six million share sold for $7.00 per share. For those of you who like the story there will be a chance to pick up some share in the up coming share purchase plan. If you do not hold any shares but would like to participate in the share purchase plan, you need to buy share today. (Tuesday the 20/11/07).
Should you have any questions please contact us on 07 4771 4577.