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World markets unsettled; collapse imminent?

Last month we stated how nervous the financial markets were around the globe in the light of the debt crisis and economic instability. The uncertainty was weighing heavily on investors' minds and, not surprisingly, affecting the markets in which they invest.

The threat that the euro might collapse and take the markets with it if the credit ratings of some its countries were downgraded, has not materialised. Even Hungary's failure to agree a fiscal strategy with the International Monetary Fund and the European Union and Ireland's credit rating reduction has had little or no effect on the relative strength of the euro--a sign of major confidence in the eurozone.

However, the confidence in the last month was insufficient to overcome the worries. Most of the world's markets lost between 3 and 5% of their value and in some cases more. We expected all of our companies to follow suit - and we would have been right but for one company's surprise trading warning on the very last day of the period!

K Laser Firm

K Laser held onto most of its 16% gain last period losing only 1.5% in value compared with its market's fall of 2.1%. The share price finished the period at T$23.2 with a market value of T$3.09b. Year to date K Laser has gained 91.8% in value compared with its market's gain of only 11.7%, outperforming it by 80.1%.

HI: 1 Step Forward, 1 Back

Hologram Industries' share price this period returned to where it was two months ago, losing last period's market value gain of [euro]2m to return to [euro]73.8m. Its share price is now [euro]13.7, [euro]2.2 (-14%) below its highest value this year of [euro]15.9 in March. But its PE is still robust at 12.7. In the last year HI has outperformed its market by 8% gaining 13% in value compared with just 5% for the Paris CAC.

Shiner Falls Again

Shiner's share price fell 9c to $1.05 (-8.6%) putting the company's value at $25.9m In the year Shiner has underperformed its market by 5.5%, the NASDAC gaining 16.6% compared with Shiner's 11.1%.

Opsec Gains

OpSec's preliminary results and positive outlook for this year caused the shares to improve significantly in the previous period. The sentiment carried over to this period - the share price was the only one we track to show an improvement. It increased to 29.75p (+8.2%) improving the company's market value by [pounds sterling]1.3m to [pounds sterling]16.7m. In the last 12 months OpSec's share price has increased by 183.3% compared with its market's growth of 17.3%.

API Goes With The Flow

Last period API's share price increased 21.7%. This period it forfeited some of that gain, falling with its market to 9.25p (-5.1%) and reducing its market value to [pounds sterling]6.5m. Over the last year API's share price has increased by 2.8% compared with its market's growth of 17.3%.

De La Rue Issues Warning

De La Rue has performed brilliantly for more than seven years, its share price steadily moving upwards from March 2003. It was the darling of the London Stock Market during the recent collapse of the financial/credit markets and the subsequent recession. Its reputation for quality is world famous and as good as its reputation with its investors. It is therefore ironic that it should be a quality issue that has caused its current rapid share fall. Following a trading announcement that it had stopped production in its paper mill, its share price immediately fell 16% to 776p, wiping [pounds sterling]150m off its market value: this now stands at [pounds sterling]769m compared with [pounds sterling]920m last period. It is too soon to tell if the market's reaction reflects the seriousness of the situation or whether it has overreacted, but trading warnings are made if the expected impact is greater than a 10% change in profit compared with forecasts.
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Title Annotation:Stockwatch
Publication:Holography News
Date:Jul 1, 2010
Words:683
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