Spotting winners in the year ahead

CITY TALK

IT'S BEEN an unusual start to the year on the stock market. The crisis in Asia worsens, by the hour it seems. But shares had, up until Friday, blithely ignored the goings on. Instead, they had continued to forge ahead. After falling to a low of around 4,700 by November, the index had risen to comfortably above the 5,000 level again by January.

A near two percent decline on Friday, to 5138.3, may herald the start of a sea change. But the message from the market since the first falls last year was that the problem, certainly for Europe, was nowhere near as serious as some doomsters may have been suggesting.

At first glance it is difficult to see why the recent problems for the Indonesian rupiah should change matters much.

Nevertheless, the market has been looking overvalued for some time; simply for that reason, some declines now may be welcome. It would be a brave forecaster, however, who will forecast the market making much headway this year.

One sector in Europe last year to outperform remarkably, even by the standards of a bull market, was the cellular telephone operators. Overall, the sector doubled in value. The UK components - Vodafone and Orange - did their bit to boost values, with rises of, respectively, 81 per cent and 43 per cent - less than the average of 98 per cent, calculated by Salomon Brothers. One reason the UK had such a poor showing was that it was Europe's slowest-growing market for the second year on the trot. However, based on penetration rates, the UK still has plenty to go for. About 14.6 per cent of the population has a mobile phone, compared to 36 per cent, say in Norway, 40 per cent or so in Finland, and 19 per cent in Italy.

Enterprise Oil is beginning to look undervalued, especially compared to its old rival Lasmo. One reason, after strong gains for both shares last year, is that the former has failed to come up with much on the exploration front. Enterprise has failed to make a single significant exploration announcement for all of last year. It has also had to put its hand up, and confess that it won't make its production targets for this year and 1999. One area of potential upside is the Clair field West of Shetland. Enterprise has a 15 per cent stake, and Enterprise's reserves could well be proved higher this year. While there is understandable disappointment at Enterprise's announcement, holders of the shares should hang on in there - there is little to fear in the long term.

BA still trades on a significant discount to the market. But after a difficult 1997, that discount could disappear as the group starts to fire on all cylinders. A resolution of the American Airlines situation must be in store, while further efficiency gains, and possibly another joint venture in Europe, could pave the way for a resumption of interest in the shares.

RICHARD PHILLIPS

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk