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MBA Stock Index underperforms national average.

What started as a record-setting year for Wall Street, fizzled slightly as March went out like the proverbial lamb for stocks. Regardless of the protracted slide of the Dow Jones Industrial Average from its record high of 3290, however, this benchmark of brewery stocks' performance still finished the first quarter with a 2.1-percent gain at 3235.47.

The rally which started the year was a carry-over from the spectacular rise triggered late in 1991 by the Federal Reserve's now-legendary (for financial markets) one-percent cut in interest rates and was characterized by a rise in cyclical stocks which would benefit from the recovery everyone was sure was coming.

By the end of the quarter, however, the discussion centered not on if recovery was coming, but how strong it would be, and what sectors would benefit most. The result was a slight fizzle to the sizzling pale which characterized Wall Street to start the year.

The effect of this late-session downtrend were even more pronounced on the Modern Brewery Age Stock Index, which tracks the cumulative performance of the brewing industry stocks listed in the accompanying table (Please see table on page 1). The net result for our measure for the first quarter: a 15.89-point increase to a closing mark of 2806.58. In other words, the stocks in our index gained an average of 0.57 percent during the three-month trading session. [TABULAR DATA OMITTED]

Providing the largest negative weight to the index during the period were shares of Coors, which dropped $3.00, or 14.29 percent, en route to a closing price of $18.00. Contributing to the decline in Coors' shares was the company's announcement during the period that net income for fiscal-year 1991 had equalled $0.68 a share, nearly half the $1.05 per share in net income the company reported during the previous fiscal year. Investors were given further pause by the brewer's predictions that first-quarter net would be lower than 1991's figure.

The earnings news was not nearly as negative for Kirin Brewery, the second largest percentage-loser during the first quarter. The company announced that pre-tax profit for the fiscal year had risen 3.3 percent. Nonetheless, investors sold shares in the company to the tune of a $14.75, or 14.05-percent, decline to a closing price of $90.25.

On the positive side during the trading session were both the A and B classes of Molson's shares, which gained 14.88 percent to close at $34.75 and 14.58 percent to close at $34.38, respectively. The fuel for the jump was a surprising earnings report as the company announced that third-quarter net income totaled $0.59 a share, $0.06 higher than the same period a year ago and significantly higher than Wall Street analysts had been predicting.
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Title Annotation:Modern Brewery Age
Publication:Modern Brewery Age
Date:Apr 13, 1992
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