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Gold/Mining/Energy : Donner Minerals (DML.V) -- Ignore unavailable to you. Want to Upgrade?

To: Buckey who wrote (6497)	8/4/1998 11:57:00 AM
From: Winer	Respond to of 11676

The NASDAQ was recently over 2000, now back near 1800. TSE rate of return is very low this year. investor1.com Tuesday, August 4, 1998 Thin threads hold up TSE When brightest stars are stripped out, companies on the index actually lost 1.9% on average for the 12 months ended July. And there's more gloom ahead, analysts warn By DAVID THOMAS Economics Reporter The Financial Post If Canadian stocks continue to fizzle at the current rate, the next time investors size up the double digit annual returns on their portfolios the numbers will be negative. The Toronto Stock Exchange's slim 3.5% advance so far in 1998 is a major disappointment, especially when compared with the 15% gain enjoyed by Standard & Poor's 500 composite index in the U.S. But bad as that may seem, a closer look at the health of the market reveals a bigger problem. The TSE 300 is being held together by a few strong threads. Otherwise, it would fall apart like a cheap sweater. In the 12 months to July 30, the TSE 300 gained 2.4% before accounting for dividends. Stripping out the weightings that make the index's largest stocks account for a large share of its total gain, companies on the index actually lost 1.9% on average in the same period. The top dozen performers on the TSE averaged a 151% gain in the 12 months, but once those stars are excluded the index's performance is a dismal -8.3%. "It's pretty dark in the short term," said Martin Roberge, a portfolio strategist with L‚vesque Beaubien Geoffrion Inc. Already held back by languishing resource stocks, Canadian equity markets are feeling the added pressure of slower earnings growth from the financial and utilities sectors, he said. But once commodity prices bottom out, he predicts the bull market will start a new leg, led by battered metals, oil and forestry stocks. Roberge said the market is in a "wait-and-see" period. But for a lot of stocks on the TSE, the bear market has arrived. Only the TSE 300's heavyweights have dragged the market's overall performance out of the mud and into positive territory. The index's top-weighted stock, BCE Inc., gained, on average, nearly 47% and, apart from Bank of Nova Scotia (up just 5.6%), the major banks racked up advances ranging from 18% for Canadian Imperial Bank of Commerce to 41% for Toronto Dominion Bank. Investors who stuck with the top 12 stocks by weight in Toronto were rewarded with an average gain of 25.8%, even though Canadian Pacific Ltd. depressed the group's gain with a 15% loss. As for top gainers with no reference to index weight, CGI Group Inc. was the leader, with a 533% gain, followed by ATI Technologies Inc. (up 220%). Only seven stocks in the TSE 300 managed at least to double in the 12 months. At the other end of the spectrum, almost all the top losers come from mhe mining sector, with Lytton Minerals Ltd. at the bottom of the heap with a decline of 91% Francois Trahan, a Canadian market analyst with Venice, Fla.-based Ned Davis Research Inc., said 30 of the TSE 300's 39 subgroups were showing positive technical indicators back in early May. By the end of the month, however, that number had dropped to 24. It now stands at 12 and looks set to move to 10. Trahan said cable and financial management stocks remain the top choices, but after that the pickings start to look slim. "Portfolio managers need to stay invested, but the 'buys' now aren't the ones going up the most - they're the ones going down the least." Last week, in the second consecutive 3.3% weekly decline for the TSE 300, all 39 subgroups lost ground. The selloff has not been a case of investors dumping their holdings in a panic, said Roberge, who also noted money is still flowing into the market through mutual funds. "Buying has simply dried up. It's bearish on the bid side as people put their money into liquid stocks to be on the safe side."