AusRAIL, Market Sectors

Transport stocks follow market `but not all the way’

<p>Listed maritime and transport and logistics firms’ share prices will follow the market to a certain extent but company-specific events were also important, a stock analyst has told <em>Lloyd’s List DCN</em> .</p> <p>Shaw Stockbroking analyst Brent Mitchell said such stocks were likely to follow the market &#8220to a certain degree&#8221.</p> <p>Australian shares in general having been affected by US falls caused by the US subprime crisis, marking the months of May and June as the end of a record-breaking run of share-price rises. </p> <p>&#8220Obviously, if the market falls 10%, it will fall, but not necessarily the 10%,&#8221 Mr Mitchell said.</p> <p>&#8220Quite often, it’s really dependent on what’s happening with particular stocks.</p> <p>&#8220In the case of something like a Qantas, they’re talking about restructuring and there are some things happening there that may result in the share price doing a bit better than the general market in terms of not falling as much.</p> <p>&#8220In the case of something like a Toll or an Asciano, we had a long strong run-up in the share price ahead of time and with the split between the companies you get a lot of people swapping between the two or selling one and topping up on the other.</p> <p>&#8220As well, you’ve the situation where the directors of the opposite company have to sell a large parcel of shares. There is that overhang there.</p> <p>&#8220There is also an international component of share ownership and quite often, when you have these corrections that are overseas-generated, sometimes that has a bigger impact on stocks that have a higher proportion of overseas shareholding.</p> <p>&#8220I wouldn’t have thought something like a Toll would have but Qantas probably does.&#8221</p> <p>Mr Mitchell noted that May and June were weak months and that while the US market had been bullish, this was more due to sentiment than &#8220really value-driven, so its come back very quickly&#8221.</p> <p>&#8220The Australian market went a bit harder than the US market and you get this feeling or perception of over-value, so, certainly, you get some selling,&#8221 he said.</p> <p>And sometimes the selling is due to company-specific reasons that dovetail with a weaker general market to drive even heavier falls.</p> <br />