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WA companies lead All Ords push

AUSTRALIAN share prices finished the first half of the calendar year up 9 per cent, with the All Ords at a record 3,425. That knocked the US S&P500 and the MSCI World Index into a cocked hat, with virtually all the overseas markets deep in the red.

Western Australian investors should have handsomely out-performed their cousins in the east. The share prices of home-grown companies were in the leading pack. Wesfarmers has soared to $27. Brick and tile battler Bristile has almost doubled in a year to $2.11, and the last remaining iron ore independent, Portman Mining, had done equally well at $1.50. Sleep-disorder company Resmed was up more than 100 per cent to $10.

Institutional fund managers have been generally cool towards our companies. More often than not, their directors have to make the long homage to Sydney to ply their charms. That may be changing. The fundies used not like Wesfamers, regarding it as an old hat conglomerate, and they refused to buy its controlling unit Franked Income last year because the stock was not in an index. Wesfarmers effectively took over itself and the subsequent bid for Howard Smith made the pages of the New York Times. The index trackers have had to turn somersaults to catch up with Michael Chaney’s company, which is now the 13th biggest in the country, capitalised at more than $11 billion.

Outside the local high flyers, to make money in the first half of this year you had to stick with the leading banks, and feign death if someone suggested anything that looked like a telecommunications share.

In January a number of private clients got calls from their brokers urging them to sell boring old defensive banking stocks and buy the beaten up cyclical companies.

That elderly friend of mine, who was spooked out of the CBA she has held for five years, was looking for her young “financial adviser” with a walking stick last week when they briefly shot through a record $34. It may be too late to buy bank shares but there are few good reasons for selling them.

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